Hong Kong 2006 - Employment

The EO provides for various employment-related benefits and entitlements for employees. Apart from statutory requirements, employers and employees are free to negotiate the terms and conditions of their employment.

Starting from December 2000, all employers have to enrol their employees in Mandatory Provident Fund schemes in accordance with the Mandatory Provident Fund Schemes legislation. The rate of employers' participation in the schemes, which are regulated by the Mandatory Provident Fund Schemes Authority, stood at 98.5 per cent at the end of the year.

The employment of children under 15 is generally prohibited by law. Subject to stringent requirements, children aged 13 and 14 may be employed in non-industrial establishments. Young persons aged 15 to 17 may work in industrial establishments, subject to regulations governing their employment conditions. Specific provisions under labour legislation protect their safety, health and welfare.

Labour inspectors conduct rigorous workplace inspections to monitor employers' compliance with the various provisions of labour legislation to safeguard the statutory rights and benefits of local and imported workers, and to ensure that employers possess valid insurance policies covering their liabilities for work injuries suffered by their employees. Labour inspectors also check employees' proof of identity during workplace inspections and carry out intelligence-led operations with the Police and the Immigration Department to clamp down on illegal employment. In 2006, 189 joint operations were conducted, 7.4 per cent more than in 2005. A total of 502 illegal workers and 231 employers suspected of employing workers illegally were arrested in these operations. The department also publicised widely the complaint hotline (2815 2200) to encourage people to report illegal employment activities.

For government service contracts which involve tenders invited on or after April 2005 and which rely heavily on the deployment of non-skilled workers, the contractors of those contracts have to sign a standard employment contract with the non-skilled workers hired to do the contracted job. The standard employment contract, which sets out the employment terms, helps safeguard the rights and benefits of the non-skilled employees.

The Labour Department continued to step up enforcement against wage offences. To this end, it secured convictions for 785 summonses on wage offences in 2006, an all-time high, or 34 per cent up on the conviction of 587 summonses in 2005. Two company directors and an employer were jailed for wage defaults. The department has also strengthened its educational and promotional efforts to remind employers of their statutory obligations to pay wages on time and educate employees on the right to lodge claims and the importance of serving as prosecution witnesses.

In Hong Kong, the employees' compensation system adopts the no-fault principle whereby compensation is payable irrespective of whether the injury, occupational disease or death was the employee's fault. The Employees' Compensation Ordinance (ECO) covers injuries or death caused by accidents arising out of and in the course of employment or by specified occupational diseases. An employer must be in possession of a valid insurance policy to cover his liabilities both under the ordinance and common law.

The Labour Department launched the Voluntary Rehabilitation Programme on a pilot basis for the construction industry in 2003. The programme aimed at helping construction workers, injured at work, to have better and speedier recovery, and facilitate their safe and early return to work. Later, the programme was extended to the catering, transportation and manufacturing industries, with the participation of more employers, insurers, and injured workers. The department will continue to improve the programme to the benefit of all stakeholders.

The Employees' Compensation Division of the Labour Department, which administers the ECO, assists injured employees and deceased employees' families to obtain compensation from their employers and administers a scheme to provide interest-free loans if they need financial assistance as a result of a work-related accident. In 2006, loans totalling $160,000 were made to 11 injured employees.

The Employees Compensation Assistance Scheme provides assistance for injured employees or family members of deceased employees in cases where employers default payment of compensation for work-related injuries. The scheme is financed by a levy imposed on all employees' compensation insurance policies taken out by employers.

In 2006, the Labour Department organised seminars and broadcast TV and radio announcements in the public interest to educate employers and employees on their rights and obligations under the ECO.

Pneumoconiosis sufferers are eligible for compensation under the Pneumoconiosis (Compensation) Ordinance administered by the Pneumoconiosis Compensation Fund Board. Those diagnosed before the ordinance went into force in 1981 may receive ex gratia benefits from the Government under the Pneumoconiosis Ex Gratia Scheme. By the end of the year, 2 158 pneumoconiosis sufferers were receiving compensation in the form of monthly/quarterly payments under the ordinance or the ex gratia scheme. Family members of 102 pneumoconiosis sufferers who died as a result of the disease were also granted compensation.

The Occupational Deafness Compensation Scheme compensates employees suffering from noise-induced deafness due to employment in specified noisy occupations. It is administered by the Occupational Deafness Compensation Board. In 2006, the board approved 51 applications for compensation due to employment-related, noise-induced deafness, and paid out $6.1 million in compensation. The board also approved 298 applications for payments for hearing aids amounting to $760,000.

The issues of minimum wage and standard working hours have been matters of public concern. However, views within the community on whether statutory minimum wage and standard working hours should be introduced are diverse. After taking into account the views of stakeholders and having carefully considered Hong Kong's socio-economic situation, the Government has concluded that the pragmatic approach at this stage would be to provide wage protection for cleaning workers and security guards through non-legislative means. As a result, the Chief Executive announced in his 2006 Policy Address that the Government would join hands with the business community and labour sector to launch a Wage Protection Movement (WPM). Under the WPM, employers should pay their cleaning workers and security guards wages not lower than the relevant average market rates, and enter into written employment contracts with these workers. If the workers have to work beyond contractual hours, they should be suitably compensated.

The Government will conduct a comprehensive review in October 2008, two years after implementation of the movement, to evaluate the effectiveness of the WPM. If the overall review finds that the WPM fails to yield satisfactory results, the Government will set out to prepare for the introduction of legislation for a minimum wage in the cleansing and guarding services sectors.

The Minor Employment Claims Adjudication Board adjudicates claims under the Employment Ordinance and in accordance with individual employment contracts. The board hears and determines employment claims involving not more than 10 claimants for a sum of money not exceeding $8,000 per claimant. During the year, the board concluded 2 483 cases and made awards amounting to $6 million.

The Labour Tribunal is part of the Judiciary and provides a quick, inexpensive and informal method of adjudicating disputes between employees and employers, which are not within the exclusive jurisdiction of the Minor Employment Claims Adjudication Board.

In 2006, there were 6 524 cases filed with the tribunal, of which 6 443 were initiated by employees and 81 by employers. Of these, 87.7 per cent were referred by the Labour Relations Division of the Labour Department after unsuccessful conciliation attempts. During the year, the tribunal dealt with 6 543 cases and made awards amounting to more than $339 million, down by 27 cases and increased by $4 million compared to 2005.