PLC Paper No. CB(1)380

Ref.: CB1/BC/2/97

Paper for the House Committee meeting
on 24 October 1997

Report of the Bills Committee on Employment and Labour Relations (Miscellaneous Amendments) Bill 1997


This paper reports on the deliberations of the Bills Committee on the Employment and Labour Relations (Miscellaneous Amendments) Bill 1997.

The Bill

2.The Bill seeks to repeal the Employment (Amendment) (No. 4) Ordinance 1997, the Employee's Rights to Representation, Consultation and Collective Bargaining Ordinance, and to amend the Trade Unions Ordinance.


3.The Ordinances covered by the Bill are three of the Ordinances passed by the previous Legislative Council which have been suspended until 31 October 1997 under the Legislative Provisions (Suspension of Operation) Ordinance enacted on 18 July 1997. The Administration is of the view that the legislative changes have been hastily passed and their serious impact on Government policies and operations has to be more fully analysed.

4.The Administration has reviewed the three Ordinances in consultation with the Labour Advisory Board (LAB) and its Committee on Labour Relations at a series of meetings. Having considered the LAB's views and recommendations, the Administration has consolidated its legislative proposals in the present Bill. It also advises that representatives of employers and employees at the LAB have endorsed these proposals.

The Bills Committee

5.In view of the Administration's request for urgent consideration of the proposed legislation, the House Committee decided on 3 October 1997 to form a Subcommittee to study the Bill before its introduction into the Provisional Legislative Council (PLC). On 17 October 1997, the House Committee agreed to set up a Bills Committee comprising the same members to take over the work of the Subcommittee. The membership list of the Bills Committee is at Appendix I. Under the chairmanship of Hon CHAN Kam-lam, the Subcommittee and the subsequent Bills Committee have held a total of three meetings with the Administration.

Deliberations of the Bills Committee

6.The Committee is well aware that the policy considerations underlying the Administration's legislative proposals to repeal two and amend one of the Ordinances have been thoroughly deliberated at the meetings of the PLC Panel on Manpower on 19 August and 30 September 1997. Taking into account the divergent views expressed and the different positions upheld by some members and the Administration, the Committee reckons that common views are unlikely to be reached on some of the contentious issues.

7.On the Administration's introduction of a single bill to deal with the Ordinances, a member has requested the Administration to propose three separate bills. The Administration however confirms that it will not take this approach as the present Bill has been introduced as a follow-up to the Legislative Provisions (Suspension of Operation) Ordinance 1997 which is also a single piece of legislation dealing with the suspension of several enactments. Nevertheless, members note that they are at liberty to move amendments to relevant clauses in the Bill in accordance with the Rules of Procedure of the PLC.

Employment (Amendment) (No. 4) Ordinance 1997

8.The Amendment Ordinance provides inter alia for a range of civil remedies for discriminatory dismissals including a court order for reinstatement without the mutual consent of the employer and employee.

9.The Administration proposes to repeal all the amendments introduced by the Amendment Ordinance for the reasons that the Employment (Amendment) (No. 3) Ordinance 1997, which came into operation on 27 June 1997, already contains similar protection for employees against dismissal on grounds of anti-union discrimination and that the concurrent operation of these two Ordinances will create unnecessary confusion among employers, employees and the Labour Tribunal.

10.The Administration also raises strong objection to the remedy of compulsory reinstatement under the Employment (Amendment) (No. 4) Ordinance on the grounds that it may result in adversarial employment relations. It maintains that reinstatement subject to mutual consent as provided under the Employment (Amendment )(No. 3) Ordinance will be more appropriate for Hong Kong. It also assures members that the provisions on reinstatement under the Employment (Amendment) (No. 3) Ordinance 1997 will be reviewed one year after the Ordinance has come into operation.

11.Some members remain unconvinced of the Administration's grounds for repealing the Employment (Amendment) (No. 4) Ordinance 1997 and in particular, question the efficacy of the provisions on reinstatement if mutual consent of the employer and employee has to be obtained for the issue of a court order. The Committee has not formulated a common view on the proposed repeal of the Amendment Ordinance.

Employee's Rights to Representation, Consultation and Collective Bargaining Ordinance

12.The Ordinance provides for a system of collective bargaining in Hong Kong. Employees are conferred the right to be represented by a trade union on employment matters and under specified conditions, the rights to be consulted by their employer through a representative trade union and to be covered by a collective agreement negotiated by a representative trade union with their employer.

13.The Bill seeks to repeal the Ordinance in its entirety. The Committee notes that the Administration has on many occasions re-affirmed its opposition to mandatory collective bargaining at the present stage while stressing the efficacy of voluntary and direct negotiation between employers and employees at the enterprise level, underpinned by the Labour Department's conciliation service. In the Administration's view, compulsory collective bargaining will reduce flexibility in employment matters and may result in a more confrontational and legalistic system of labour relations in Hong Kong.

14.The Committee notes that while some members of the commercial/industrial sectors share the Administration's concerns, some members of the labour sector support mandatory collective bargaining. They hold the view that although some provisions in the Ordinance may give rise to enforcement difficulties, the Administration should attempt to draw up revised legislative proposals to resolve them and conduct further consultation instead of proposing to repeal the Ordinance entirely. The Committee has not taken a position on the proposed repeal of the Ordinance.

Trade Unions Ordinance (TUO)

15.In essence, the Bill seeks to retain some of the provisions introduced by the Trade Unions (Amendment) (No. 2) Ordinance 1997, to reinstate and amend some original provisions of the TUO which have been amended by the Amendment Ordinance, as well as to introduce new provisions. A list of the proposed amendments is at Appendix II. According to the Administration, the legislative proposals are to give effect to the recommendations of a comprehensive review of the TUO, all of which have been endorsed by the LAB.

Affiliation of local unions with organizations in foreign countries

16.Members note that while the Trade Unions (Amendment) (No. 2) Ordinance 1997 repeals the requirement of the Governor's consent for a trade union to be a member of any organization outside Hong Kong, the proposed new section 45 seeks to allow the affiliation of local unions with organizations of workers, employers and "relevant" professional organizations in foreign countries but to reinstate the requirement for the Chief Executive's consent for affiliation with any foreign organizations other than the aforesaid categories.

17.Pursuant to the proposed new section 45, affiliation with foreign political organizations or bodies will still require the consent of the Chief Executive. Members are therefore concerned about ways of ascertaining the nature of a foreign organization. In response, the Administration advises that whether a foreign organization is a political organization, or a bona-fide related organization or a "relevant" professional organization will have to be decided on the facts of each case.

18.The Administration further confirms that a registered trade union may become a member of any foreign organization of workers or employers, irrespective of whether the organization concerned is one of the same trade or a federation of trade unions/employer associations, subject of course to its being accepted by the foreign organization concerned. It considers this arrangement appropriate as unions worldwide, irrespective of trades and composition, share a primary objective of promoting the well-being of their members. On the other hand, to ensure genuine exchange of views and expertise, the Administration considers it necessary to establish "relevance" of a professional organization to the union concerned when such affiliation is to take place.

19.As regards the application of the proposed new section 45 to affiliation with organizations in the Mainland and Taiwan, members take note of the Administration's view that the proposed section should not be extended to such affiliations as Article 148 of the Basic Law has already set out clearly that the relationship between labour organizations in Hong Kong and their Mainland counterparts 'shall be based on the principles of non-subordination, non-interference and mutual respect". On affiliation with organizations in Taiwan, the Administration advises that similar principles of non-subordination, non-interference and mutual respect have also been set out in one of the Seven Principles announced by the Central People's Government in June 1995 governing Hong Kong's handling of Taiwan-related matters after 30 June 1997.

Transitional arrangements

20.Pursuant to the proposed section 45A, the provisions on overseas affiliation under the proposed section 45 are disapplied in relation to a registered trade union which has become a member of a foreign organization during the short period between the commencement of the Trade Unions (Amendment) (No. 2) Ordinance 1997 and the commencement of the Legislative Provisions (Suspension of Operation) Ordinance 1997. To remove doubt, the Administration has agreed to introduce a Committee stage amendment (CSA) to provide for similar disapplication on a trade union which became a member of a foreign organization with the consent of the Governor under the former section 45 of the TUO.

21.In this connection, members have also urged the Administration to draw the attention of registered trade unions to the transitional provisions which in effect provide that only those overseas affiliations completed during the short period between the enactment and suspension of the Amendment Ordinance are not subject to any restriction. Pending the passage of the relevant amendments under the present Bill, other cases of overseas affiliation are still governed by the former section 45 of the TUO as if it has not been amended.

Committee stage amendments

22.A full set of CSAs to be moved by the Administration is at Appendix III. Most of the amendments relate to drafting aspects and serve to improve textual clarity and consistency. The Bills Committee has not proposed any CSAs to the Bill.

Advice to be sought

23.The Bills Committee has noted the Administration's intention to resume Second Reading debate of the Bill on 29 October 1997. Members are invited to consider whether it should be recommended to the President that the Second Reading debate be resumed on 29 October 1997.

Provisional Legislative Council Secretariat
23 October 1997