LegCo Paper No. CB(1)1082/96-97
(These minutes have been seen by the Administration) Ref : CB1/PL/MP/1

LegCo Panel on Manpower

Minutes of meeting
held on Monday, 20 January 1997, at 2:30 p.m.
in the Chamber of the Legislative Council Building

Members present :

    Hon LAU Chin-shek (Chairman)
    Hon CHAN Yuen-han (Deputy Chairman)
    Hon SZETO Wah
    Hon CHEUNG Man-kwong
    Hon Frederick FUNG Kin-kee
    Hon Michael HO Mun-ka
    Hon Henry TANG Ying-yen, JP
    Hon James TIEN Pei-chun, OBE, JP
    Hon LEE Cheuk-yan
    Hon CHAN Wing-chan
    Hon CHENG Yiu-tong
    Hon LAW Chi-kwong
    Hon LEE Kai-ming
    Hon LEUNG Yiu-chung
    Hon TSANG Kin-shing

Members absent :

    Hon NGAI Shiu-kit, OBE, JP
    Hon Ronald ARCULLI, OBE, JP
    Dr Hon LEONG Che-hung, OBE, JP
    Hon Bruce LIU Sing-lee
    Hon MOK Ying-fan

Public officers attending :

Items IV & V

Mr Raymond FAN
Principal Assistant Secretary for Education and Manpower (4)
Mr TSANG Kin-woo
Assistant Commissioner for Labour

Item V
Mr Matthew CHEUNG, JP
Deputy Secretary for Education and Manpower
Mr YEUNG Tak-keung
Assistant Secretary for Education and Manpower (4)2
Mr Francis CHENG
Assistant Secretary for Education and Manpower (5)
Mr Horace Knight
Executive Director of Vocational Training Council
Mr CHOW Tung-shan
Executive Director of Employees Retraining Board

Clerk in attendance :

Miss Polly YEUNG
Chief Assistant Secretary(1)3

Staff in attendance :

Ms Connie SZE-TO
Senior Assistant Secretary(1)5

Item IV
Mr Arthur CHEUNG
Assistant Legal Adviser 5

I Confirmation of minutes of meeting and matters arising

(LegCo Paper No. CB(1)694/96-97)

The minutes of the Panel meeting held on 17 December 1996 were confirmed.

II Date and items for discussion for next meeting

2. Members agreed to discuss the following items at the next Panel meeting scheduled for 24 February 1997 at 2:30 p.m.-

  1. Entry of British nationals for employment in Hong Kong;
  2. Improvement on the employees compensation system; and
  3. Funding for the Occupational Safety and Health Council.

(Post-meeting note: With the concurrence of Mr LEE Cheuk-yan, item (b) was replaced by a briefing on his Member’s Bill - Employment (Amendment) Bill 1997.)

3. Responding to the Deputy Chairman’s concern on the review on the implementation of the Supplementary Labour Importation Scheme, the Chairman directed that the Administration should be requested to provide an information paper on the present position of the subject.


(Post-meeting note: The Administration had provided the information paper which was circulated vide LegCo Paper No. CB(1)944/96-97.)

III Information papers issued since last meeting

(LegCo Paper No. CB(1)639/96-97)

4.The Panel noted that a paper on "Summary of issues considered by the Labour Advisory Board (LAB) on 20 December 1996" had been issued for members’ general information.

5. Referring to the proposed transparency measures as outlined in the said paper, the Deputy Chairman remarked that as far as she understood, employee representatives of the LAB had no objection to opening up the meetings. As there was a difference in opinion, she wished to know on what basis the Administration had come to the conclusion/viewpoint that members of the LAB were of the view that opening up meetings might inhibit the frankness of discussion and would propose to hold post-meeting press conferences as a transparency measure instead. The Chairman said that the Administration’s clarification would be sought on this point.


(Post-meeting note: The Administration had provided a reply which was circulated vide LegCo Paper No. CB(1)944/96-97.)

IV Briefing on legislative proposals

Trade Unions (Amendment) Bill 1997

(LegCo Paper No. CB(1)715/96-97(01))

6. At the Chairman’s invitation, Mr LEE Cheuk-yan briefed members on the proposed amendments and highlighted that one of the main objectives of the Bill was to amend the Trade Unions Ordinance (Cap. 332) (TUO) to bring it more in line with the requirements of International Labour Convention (ILC) No. 87, Article 8 of the International Covenant on Economic, Social and Cultural Rights and section 18 of the Bill of Rights Ordinance which conferred the right of association on individuals.

Officers of trade unions

7. Messrs CHAN Wing-chan and CHENG Yiu-tong considered it inappropriate to permit persons who were not engaged or employed in the trade, industry or occupation with which the trade union was directly concerned to become officers of the union. They doubted whether such persons would be familiar with the operation of the trade and opined that the proposed arrangement would change the nature of a trade union and complicate its structure.

8. In response to members’ concerns, Mr LEE Cheuk-yan made the following points-

  1. A trade union should have autonomy in selecting its officers. The proposed amendment would replace the existing requirement for the consent of the Registrar of Trade Unions to allow a person who was not engaged or employed in the trade to become an officer of the concerned trade union.
  2. It was a common practice for overseas trade unions to appoint persons who were not employed or engaged in the same trade to be the Secretary General of the unions. They were appointed to such an important position because of their leadership ability and knowledge of the trade. The proposal would enhance the professionalism of trade unions in Hong Kong.

Political fund

9. Mr LEE Kai-ming expressed doubt on the need for a political fund. He pointed out that although there were existing provisions in the TUO which permitted the establishment of an electoral fund to cater for expenses incurred in the "three-tier" elections, not many trade unions had amended their constitutions to this effect, thus suggesting that unions themselves not might be very keen on using funds for electoral activities. Mr Henry TANG was also concerned that the proposed amendment might be abused as union funds could be diverted to political use at the expense of the interests of the union members.

10. In reply, Mr LEE Cheuk-yan explained that it was inappropriate to prohibit the use of union funds for political purposes as sometimes, it would be necessary to pursue the interests of a union through political means. Moreover, there would be sufficient safeguards against abuses as the establishment of a "political fund" or a "political expense resolution" had to be authorised by secret ballot of a majority of the voting members of a registered trade union.

Responses from the Administration

11. In explaining the Administration’s initial responses on the Bill, the Principal Assistant Secretary for Education and Manpower (4) and the Assistant Commissioner for Labour (AC for L) made the following points-

  1. The main purpose of the TUO was to regulate union activities for their healthy development and to safeguard the interests of union members. Over the years, a number of amendments had already been made to the TUO in the light of political and social changes. The proposed amendments were considered unnecessary and inappropriate. The proposal to set up a "political fund", for example, might turn trade unions into political organisations.
  2. On the affiliation of trade unions with organisations outside Hong Kong, section 45 of TUO already provided that membership in overseas unions would be permitted with the consent of the Governor. The legislative intent was to protect unions from association with undesirable organisations. So far, no application for membership in overseas unions had been rejected.
  3. It had been a well-established practice of the Government to draw up legislative proposals on the basis of consensus reached at the Labour Advisory Board (LAB). The Administration would not support the Bill as it had not been considered at the LAB.

Other concerns

12. Responding to Mr CHAN Wing-chan’s enquiry, AC for L clarified that there was no provision under the TUO requiring the Governor’s approval for a local trade union to receive contributions from overseas trade unions. Regarding approval for making donations to overseas trade unions, he would provide information on the number of such applications for members’ reference after the meeting. As far as he recalled, no application had been rejected so far.


13. On the Chairman’s enquiry about the application of ILC No. 87, AC for L confirmed that Hong Kong had not ratified the said convention in full. At the Chairman’s request, he would provide information on the implementation of ILC No. 87 in Hong Kong after the meeting.


14. The Panel noted that since a number of organisations had expressed concerns about the implications of the Bill, the House Committee had agreed at its meeting on 17 January 1997 to set up a Bills Committee to scrutinize the Bill. Mr LEE Cheuk-yan also said that he would consult trade unions on his Bill.

V Review on vocational training and re-training services

(LegCo Paper Nos. CB(1)636/96-97; CB(1)715/96-97(03), (04) & (05); Chinese version of paper CB(1)715/96-97(04) tabled at the meeting)

15. The Deputy Secretary for Education and Manpower (DS for E&M) presented the Administration’s paper which sought to clarify major points on the reviews raised by members and non-government organizations (NGO) at the previous two Panel meetings on 17 December 1996 and 13 January 1997. In the ensuing meeting, members deliberated on the following issues.

The respective role of the Vocational Training Council (VTC) and the Employees Retraining Board (ERB)

16. Responding to the view that the Administration had failed to formulate a comprehensive and forward-looking policy on manpower planning in Hong Kong, DS for E&M stressed that the two reviews sought to reposition the strategic roles of the VTC and ERB to ensure that the two would complement each other in meeting the manpower training and retraining needs of Hong Kong in the long term. While the Employees Retraining Scheme (ERS) would focus on providing retraining for unemployed persons and new immigrants, the VTC would take over the provision of skills upgrading courses for employed persons and the ancillary retraining courses for the elderly and the disabled.

Proposed changes in the scope of VTC

17. Mr LEE Cheuk-yan enquired about the proposed charging policy for skills upgrading courses when the VTC took up the provision of training for in-service personnel and its possible impact on the trainees. The Deputy Chairman and Mr CHEUNG Man-kwong also queried whether it would be cost-effective for the VTC to provide skills upgrading courses and retraining for disabled persons in lieu of the present training bodies because the latter had already acquired the necessary expertise and connections.

19. In response to members’ concerns, DS for E&M made the following points-

  1. A joint working group comprising senior management and members of the ERB and VTC as well as government officials had been set up to consider issues relating to the interface between the two institutions. The first meeting was held on 16 January 1997 and the next meeting was tentatively scheduled for 27 January 1997. The fee-charging system of VTC’s skills upgrading courses was one of the important issues to be discussed. The concerned parties would be consulted where appropriate. To ensure a smooth transition on the transfer of the skills upgrading role, a reasonable transitional period would be allowed.
  2. At present, some of the skills upgrading courses run by the ERS were charged to recover about 20% of the cost. Since skills upgrading courses were designed for in-service personnel who had an income, the charging of course fees was considered reasonable.
  3. The Administration attached utmost importance to ensuring that skills upgrading courses would be provided by the VTC in a cost-effective manner. It was envisaged that the VTC would be able to gain further economy of scale in its operation upon taking over the enhanced role.

  1. The Administration had noted NGOs’ concern about the transfer of training services for the disabled and elderly persons to the VTC and would further consider their views in finalising the proposal.

19. On the cost-effectiveness of VTC courses, the Executive Director of VTC advised that as the skills training courses provided by the VTC was different from the general skills courses provided by the retraining bodies under the ERS, it would be inappropriate to make a comparison simply on the basis of the costs of running these courses.

Target Clientele of the ERS

20. On the admission criteria for the ERS, DS for E&M advised that although the consultant had recommended that the target clientele should be unemployed persons over 30 years of age and those with less than Secondary Three education who formed the hard-core and the most vulnerable group of the unemployed, the Administration recognised the need to apply the criteria flexibly in deserving cases for both local residents and new immigrants. Nevertheless, he stressed that retraining courses should be targeted primarily at the hard-core group.

Retraining allowance

21. While Mr James TIEN considered that the proposed weekly allowance of $500 for travelling and meal expenses acceptable in principle, the majority of members present were of the view that the existing allowance of $1,000 should be maintained. Mr Federick FUNG also enquired whether it was possible to devise a mechanism to assess the needs of individual retrainees with a view to identifying those deserving ones for whom both types of allowance should be paid in deserving cases.

22. While the Administration was prepared to consider views on the proposed allowance, DS for E&M made the following points in explaining the rationale for the proposal -

  1. Unlike the present arrangement, it was proposed that the allowance would be payable to all unemployed retrainees of the ERS attending full-time courses to cover the travelling and meal expenses incurred by them whilst attending retraining.
  2. The retraining allowance should not be considered a form of unemployment benefit. Unemployed persons who were needy should apply for assistance from the Comprehensive Social Security Assistance.
  3. The real attraction of the ERS should be the content of the retraining programme rather than the financial incentive offered.

Placement-tied reimbursement system for training bodies

23. Addressing members’ concern on the implications of using placement rate as a funding criteria, DS for E&M informed members that the placement rate of 70% mentioned in the consultation paper was merely an example and should not be construed as the benchmark for funding. He stressed that the Administration recognised the need for the ERB to work out with the training bodies a reasonable and acceptable funding formula so that the training bodies would have more incentive to design and implement more placement oriented courses.

On-the-job training programme

24. Messrs Henry TANG and James TIEN disagreed with the proposal to abolish the on-the-job training programme (OJT) and considered it a very cost-effective mode of training. In explaining the background of the OJT and the rationale for its proposed abolition, the Executive Director of ERB made the following points -

  1. The Programme was introduced in 1993 and one of its objectives was to encourage employers to hire and train retrainees of the ERS. The ERB would provide a financial subsidy to employers to offset part of the cost of employing the trainees. More than 15,000 retrainees had benefited from the OJT so far.
  2. It was revealed that some 90% of the employers participating in the OJT did not claim the financial subsidy.
  3. The consultant considered that as the ERB had little control over the quality and effectiveness of the training provided to the retrainee once he had been employed, the OJT had turned out to be largely a system of financial subsidy for employers. Hence, a phasing out of the programme was recommended.

25. DS for E&M added that it was proposed to replace the existing programme by a specially designed training programme for the unemployed which would incorporate the concept of OJT as a part of it. The ERB and training bodies concerned would have the flexibility to decide whether "on-the-job attachment" should form part of the comprehensive retraining programme for the target trainees, but no financial reimbursement to employers would be provided.

26. In this connection, Mr James TIEN remarked that the low participation of employers in the OJT might be due to insufficient publicity. He suggested that the Administration or ERB should try to find out the reasons for so few employers having claimed the financial subsidy and remarked that complicated application procedures might be a possible reason.


Funding for ERB

27. Some members expressed concern about the future funding for the ERB. As the income from the levy on employers of imported workers had reduced as a result of the decline in the number of imported workers, they opined that a stable source of funding for the long-term operation of ERS was necessary. They also considered that the proposal of reducing the weekly retraining allowance was a sign of Government withdrawing its commitment to the ERB.

28. In reply, DS for E&M said that the Administration was firmly committed to ensuring adequate funding for the ERB and explained that since its establishment in 1992, the Administration had provided the Board with a total funding of $600 million and proposed a further capital injection of $500 million into its reserve. The Board had an accumulated cash balance of $338 million at the end of October 1996 and it was in a healthy financial condition.

Other concerns

29. Concerning the employment of retrainees, Mr TSANG Kin-shing remarked that overseas workers admitted to Hong Kong for training purpose had undermined the job opportunities for retrainees. He requested the Administration to provide members with further information.

(Post-meeting note: The Administration had provided the information which was circulated vide LegCo Paper No. CB(1)944/96-97.)

30. Responding to the Deputy Chairman’s enquiry about whether a review on other training/retraining bodies, such as the Hong Kong Productivity Council (HKPC), would be conducted, DS for E&M advised that the HKPC was one of the training bodies receiving funding from ERB for running retraining courses and there was no plan to examine the work of individual training bodies.


31. Summing up the discussion, the Chairman urged the Administration to consider the views expressed by members and NGOs on the two reviews. DS for E&M also agreed to consider the Panel’s request for consultation on the finalised proposals.


VI Any other business

32. The meeting ended at 4:30 p.m.

Legislative Council Secretariat
13 March 1997

Last Updated on 21 August 1998