Legislative Council

LC Paper No. CB(2) 496/98-99
(These minutes have been seen by the Administration)

Ref : CB2/PL/MP/1

LegCo Panel on Manpower
Minutes of meeting held on Thursday, 24 September 1998 at 2:30 pm in Conference Room A of the Legislative Council Building

Members present:

Hon LEE Kai-ming (Chairman)
Hon LAU Chin-shek, JP (Deputy Chairman)
Hon Kenneth TING Woo-shou, JP
Hon James TIEN Pei-chun, JP
Hon HO Sai-chu, JP
Hon Michael HO Mun-ka
Hon LEE Cheuk-yan
Hon CHAN Kwok-keung
Hon CHAN Yuen-han
Hon CHAN Wing-chan
Hon LEUNG Yiu-chung
Hon Andrew CHENG Kar-foo

Members absent:

Hon David CHU Yu-lin
Dr Hon LUI Ming-wah, JP
Hon Ronald ARCULLI, JP
Hon CHAN Kam-lam
Dr Hon LEONG Che-hung, JP
Hon SIN Chung-kai

Public Officers attending:
Item III

Mr Matthew CHEUNG
Deputy Secretary for Education and Manpower

Ms Esther LEUNG
Principal Assistant Secretary for Education and Manpower 4

Miss Jacqueline WILLIS
Commissioner for Labour

Mrs Clare SIU
Assistant Commissioner for Labour (Employment Service)

Item IV

Mr Matthew CHEUNG
Deputy Secretary for Education and Manpower

Ms Esther LEUNG
Principal Assistant Secretary for Education and Manpower 4

Mr Herman CHO
Principal Assistant Secretary for Education and Manpower 7

Miss Jacqueline WILLIS
Commissioner for Labour

Mr TSANG Kin-woo
Assistant Commissioner for Labour (Labour Relations)

Item V

Mr Matthew CHEUNG
Deputy Secretary for Education and Manpower

Mr Herman CHO
Principal Assistant Secretary for Education and Manpower 7

Mr MAK Hung-kae
Assistant Commissioner for Labour
(Occupational Safety & Health)
Clerk in attendance:
Mrs Sharon TONG
Chief Assistant Secretary (2)1
Staff in attendance:
Miss Betty MA
Senior Assistant Secretary (2) 1

Ms Lolita NG
Senior Assistant Secretary (2) 5
I. Confirmation of minutes of meeting held on 28 July 1998 (LC Paper No CB(2) 266/98-99)

The minutes were confirmed.

II. Date of next meeting and items for discussion (LC Paper CB(2) 302/98-99 (01))

2. The Chairman informed members that the Education and Manpower Bureau (EMB) would brief the Panel on the Chief Executive's Policy Address on 12 October 1998.

3. Members agreed to discuss the "Proposal on Minimum Wage in Hong Kong", a research paper submitted by the Hong Kong Social Security Society, at the regular meeting scheduled for 29 October 1998 at 2:30 p.m. Members also agreed that deputations of employers' associations and of labour organizations be invited to attend the meeting.

4. Members agreed to discuss the review of working time arrangements of the local workforce at the meeting scheduled for 29 October 1998 if the Administration could provide the Panel with an information paper on time. The Administration undertook to confirm with the Secretariat by mid October 1998 whether an information paper could be submitted, failing which the subject would be further deferred to the meeting in November 1998.(Post-meeting note : The subject was deferred to a future meeting.)Adm

5. The Panel resolved to discuss the following items at the meeting scheduled for 26 November 1998 -
  1. Member's bill on age discrimination to be introduced by Hon LAU Chin-shek;

  2. Impact on existing employees and on prospective employers upon change of monopolist of public enterprise; and

  3. Review on employment conditions of live-in domestic helpers.
6. On item at para.5(b) above, the Administration undertook to provide the Panel with a co-ordinated paper on existing arrangements with different public enterprises. On item at para.5(c) above, Miss CHAN Yuen-han suggested and members agreed that the definition of the term "domestic helper" be reviewed with consideration given to other employees, e.g. drivers who worked in domestic setting.Adm

III. Report on work progress of the Task Force on Employment (LC Paper CB(2) 302/98-99 (02))

7. Deputy Secretary for Education and Manpower (DSEM) said that the rate of under-employment had decreased from 2.6% to 2.5% while the unemployment rate was 5%. The reversal of the rising trend of unemployment rate depended largely on economic recovery. However, the Administration would endeavour to ease unemployment and to help the unemployed re-enter the labour market as soon as possible.

8. At the request of the Chairman, DSEM highlighted the progress of the measures adopted by the Task Force on Employment to create jobs and tackle unemployment as follows -
  1. Most of the measures so far announced were taking effect on the ground. In particular, more job vacancies were filled after the Labour Department (LD) improved its employment and job matching service by means of telephone referral and vacancy processing service for job-seekers, release of information on job vacancies to the public and promotional activities to prospective employers;

  2. To enhance vocational training and employees retraining, the Employees Retraining Board (ERB) and Vocational Training Council (VTC) had jointly organised a nine-month Certificate of Skills Training (Service Industry) Course for the unemployed, which received very enthusiastic response. It started in September 1998. Meanwhile, a special seafarer training programme for the maritime industry would commence in October. The number of Secondary 5 places in Government evening schools had been increased whereas VTC would start a one-year full-time Vocational Studies Certificate programme for Secondary 5 leavers in October 1998. In addition, ERB operated a one-stop service to enhance the retraining-cum-job matching programmes for domestic helpers and child-minders;

  3. For promotion of further education, the University Grants Committee (UGC)-funded institutions were prepared to expand the capacity of taught post-graduate courses. EMB would closely liaise with UGC and these institutions on the matter;

  4. On creating jobs, 21 public works projects had been advanced resulting in the creation of about 3 000 new posts. While the Administration anticipated that 100 000 job vacancies would be made available in the labour market by the end of 1999, around 15 000 jobs had so far been created and of these, some 3 000 were civil service posts. Of the 12 000 non-civil service posts, 6 000 posts arose from infrastructural projects and the remaining ones were in a wide range of other sectors including education, hospital services, etc;

  5. The Hong Kong Tourist Association (HKTA) had already staged the first event i.e. a large-scale Pop Concert which was a special highlight of the promotion programme " Hong Kong City of Life-Stars Spectacular 98" at the former Tamar Site. In addition, a Hong Kong International Products Exhibition would be organized at the Site by the end of 1998 and this would help create new jobs in the labour market. On the other hand, HKTA and Metro Broadcast Co Ltd would jointly organize a series of harbour front carnival activities during the period from 11 October 1998 to 22 November 1998. There would be a Trendy market at the Site on the six Sundays during this period as stalls would be made available to those who wished to sell creative and innovative products;

  6. Tourist arrivals began to rebounce in July 1998 and there was a rise in the occupancy rate of local hotels. The recovery of tourism would definitely help to boost retail business; and

  7. A special finance scheme to help small and medium sized enterprises to obtain loans from lending institutions was lanched in late August.
9. In response to Miss CHAN Yuen-han and Mr CHAN Wing-chan, DSEM advised that the main objective of the activities staged in the former Tamar Site was to promote tourism and that provision of job opportunities was largely an outcome of such activities. The trendy market within the carnival jointly organised by the HKTA and Metro was in line with idea of a flea market. Realizing that the unemployment problem was still serious despite the stabilization of the under-employment rate, the Administration would do its utmost to improve the situation and to ease the unemployment problem with all possible means. It would require more time to observe how far the tourism-oriented activities staged at the Site could attract tourists. DSEM assured members that EMB would discuss the matter with the Economic Services Bureau with a view to maximizing the use of the Site and providing more job opportunities for the unemployed.Adm

10. Referring to a recent resolution of the Labour Advisory Board (LAB) to support applications for imported workers, Mr LEE Cheuk-yan queried why the Administration still allowed overseas workers to be imported when the unemployment problem had yet to be tackled. In response, DSEM explained that the existing Supplementary Labour Scheme (SLS) was working on the basis of the cardinal principle that priority should be given to local employees in filling up job vacancies but failing this, employers should be allowed to bring in imported workers to fill the relevant job vacancies. In spite of the prevailing unemployment situation in Hong Kong, there was quite a number of job types of work, such as pig farmer, personal care worker in private care and attention home and hairwashers, for which local workers were difficult to be recruited as revealed from the result of Labour Department's local recruitment process. It was for the sake of filling vacancies of this type that the Administration allowed importation of labour.

11. In response to a follow-up question from Mr LAU Chin-shek, Commissioner for Labour (C for L), who also being the Chairperson of LAB, reiterated that under the SLS local employees were given priority to fill job vacancies, failing which imported workers were allowed to fill the designated vacancies. She gave a detailed account on the circumstances leading to LAB's support of 53 applications filed from employers to import overseas workers. In passing, C for L cited an example in which an employer did not succeed to recruit enough construction site watchmen although he offered a salary exceeding the medium wage i.e. about $ 9 000 per month and was prepared to take all retrainees from the ERB two tailor-made retraining courses organised for local workers. She emphasized that it was a majority decision of LAB members rather than her vote as the Chairperson to support the applications for imported labour. She accepted LAB members' advice and recommended the applications to EMB for approval.

12. Responding to a further question from Mr LEE Cheuk-yan, C for L said that whenever there were job vacancies, the Labour Department (LD) would forward relevant information to ERB and trade unions who could then recommend retrainees and local job seekers to LD for job matching. LD, being proactive, also identified all jobs seekers registered by the Local Employment Service and Job Matching Centre to identify qualified local workers and to arrange job matching for those who were interested in the SLS vacancies. In addition, LD would arrange with ERB to conduct tailor-made training courses as in the case of the construction site watchmen.

13. Some members were surprised to note the example cited by C for L in para.11. In this connection, Mr Andrew CHENG urged the Administration to improve the job matching mechanism.

14. Mr HO Sai-chu, who was also a member of LAB, recapitulated the aforementioned principle adopted by LAB in processing applications for imported labour. He added that in vetting an application, LAB would also consider whether or not the proposed importation of workers would help to maintain or enable a certain number of local employees to work in Hong Kong. In some cases, skilled imported workers could help train local employees to do certain jobs.

15. At the request of the Chairman, DSEM agreed to advise in writing the types of trade and jobs which were recently approved under SLS. Adm

16. In response to Mr Andrew CHENG, DSEM said that the 100 000 job vacancies expected to be made available by the end of 1999 resulted from the Government's key policy initiatives, infrastructural development and public works. These were also vacancies in the Government sector and those arising from the West Rail Project (excluding new projects in Ma On Shan, Tsung Kwan O, Tsim Sha Tsui, Hunghum and the former Kai Tak Airport). The provision of the 100 000 job vacancies was a conservative estimate since it had not taken into account jobs created at the sole initiatives of the private sector and the Administration would provide the Panel with a detailed paper on job creation assessment posts updating the assessment on the basis of initiatives to be announced on the 1998 Policy Address in late 1998. In answering a follow-up question from Mr Andrew CHENG, DSEM further said that the Administration would inform the Panel of how far the major policy commitments had been met as reflected by the progress of job creation on the above paper.Adm

17. On the point of promoting further education raised by Mr Andrew CHENG, DSEM advised that while the tuition fees of training institutes including the Open University and VTC were frozen in 1998-99, the Non-Means-Tested Loan Scheme was extended to benefit more tertiary students including those of the Open University.

18. In response to Mr Andrew CHENG's enquiry about measures to combat illegal employment found in settings other than construction site, DSEM said that the Immigration Department would continue with its vigorous enforcement efforts such as conducting large-scale operations and that LD would conduct more inspections at workplaces to clamp down illegal employment. He assured members that EMB would also continue to liaise with the Security Bureau on the matter.Adm

19. In response to Mr LEUNG Yiu-chung, DSEM said that the unemployment problem, though serious, should have been tackled in the long run. In fact, the 100 000 new vacancies anticipated to be made available by the end of 1999 excluded those of the private sector. The Administration wished that all the vacancies would be filled by local employees but, in the event of recruitment difficulties due to the nature of the job, overseas workers would have to be imported. The Quadrilateral Working Group on Training and Retraining for the Construction Industry led by EMB and comprising representatives of all the relevant training institutions and government bureaux/departments as well as trade associations and labour unions, would continue with its work to help equip the unemployed with the requisite skills to enter the construction industry. There were 5 000 semi-skilled workers (3000 in construction industry and 2 000 in mechanical engineering) in need of job placement. To ensure job opportunities for local employees, the Administration set out the requirements that for government housing projects, 5% of the workforce should be semi-skilled workers and 30% should be skilled workers. For construction industry contracts, the workforce should consist of 5% semi-skilled workers and 10% skilled workers. The Administration was prepared to increase the above quota if necessary whilst efforts would be made to raise the skill levels of local workers.

20. In response to Mr LEUNG Yiu-chung's follow-up question, DSEM estimated that if all 100 000 job vacancies were created by the end of 1999 and all other factors remained constant, the current employment rate would be considerably reduced. The Chairman, however, pointed out that the estimate needed to be reviewed with consideration given to a rise in the number of local employees to be employed which was subject to some other factors, e.g. increase in the number of one-way permit holders and returnees.

IV. Change of employment terms by employers (LC Paper No. CB(2) 302/98-99(06))

21. DSEM advised that under the Employment Ordinance (the Ordinance), an employer might not change the terms of a contract of employment unreasonably. In this connection, Assistant Commissioner for Labour (Labour Relations) (AC for L (LR)) briefed members on the information paper. He pointed out that terms of contract could only be varied with mutual consent of the employer and the employees. In changing the terms of the agreement, any party to the contract might propose to the other party any variation of the terms of the contract, however, it was for the other party to decide whether or not to accept the variation. If an employer wished to vary the employment terms of his employees and such variation would substantially affect the interest of employees, such as wage reduction, he should obtain their consent. The employer should not coerce his employees into agreeing to any variations of employment terms or enforce such variations without the consent of the employees. Before varying the terms, employers were encouraged to discuss with his employees and explained to them the reasons for such variation. If wage reduction was involved, it was all the more important for an employer to discuss problems with his employees and to explore possible options. . AC for L (LR) further said that employees had a right to choose whether or not to accept a variation to their employment terms as proposed by their employers. The Ordinance protected employees against unilateral and unreasonable change of employment terms by employers. By virtue of Part VIA of the Ordinance, an employee who had been employed on a continuous contract (i.e. employed for four weeks or more, with at least 18 hours in each week) might lodge a claim with the Labour Tribunal for remedies for unreasonable variation of contract terms if his employment terms had been changed by his employer without his consent and his employment contract did not contain an express term which allowed such variation.

22. AC for L (LR) added that unilateral wage reduction by an employer without the consent of his employees would be a breach of the Ordinance. Under Common Law, an employee could deem any variation of contract terms which would substantially affect his interest such as wage reduction to be a constructive dismissal by the employer and lodge a claim for termination compensation.

23. Mr LEE Cheuk-yan considered the existing Ordinance not effective in protecting employees against change in employment terms by the employer as they were not entitled to a right of consultation and of negotiation. Referring to Para.5 of the information paper, he queried why the role of a trade union was not mentioned and instead, an employee was encouraged to consult his family members or friends whether or not to accept a variation to his employment terms proposed by the employer. In response, C for L said that family support was considered important in the circumstances and that it would be the employee's own decision to decide whether or not to consult any other party, including a trade union. Although this was an employment matter between the employer and the employee, the Administration had no intention of being disrespectful to any trade union. In fact, trade unions were frequently involved in matters related to labour relations and LD enjoyed good working relations with trade unions. The Administration did not discriminate against trade unions. AC for L (LR) added that the Administration recognized that the role of a trade union was important and that trade unions often played a constructive and useful role in settlement of labour disputes. He, however, pointed out that the Ordinance was not applicable to the Government.

24. In response to Mr LEUNG Yiu-chung's question if the Administration would review the legal status of trade unions, AC for L (LR) reiterated that the Administration recognized the importance of trade unions. Employees were free to approach trade unions for advice on change in terms of employment. LD would certainly not discourage them from doing so. C for L further stated that the Administration did realize the important role of trade unions and this explained why representatives of trade unions were invited to help settle labour disputes. Moreover, six among 12 members of LAB were representatives of trade unions. AC for L (LR) added that courses on human resource management conducted by the LD also introduced roles of trade unions whereby representatives of trade unions were invited to give lectures. Miss CHAN Yuen-han urged the Administration to attach great importance to trade unions given their contribution in labour relations.

25. In response to Miss CHAN Yuen-han's enquiry about measures adopted by the Administration to protect employees against wage reduction, C for L said that the Ordinance protected employees against unilateral and unreasonable wage reduction by employers in case they did not accept the change in the employment terms. Taken into account that some employers did not give enough time notice to employees, C for L said that a set of guidelines would be prepared to advise employers on the handling of matters concerning change of employment terms where they were unavoidable. The guidelines would stress the need for employers who were in financial difficulty to explore alternative measures to control costs. Wage reduction and retrenchment should only be considered as a last resort.

26. The Chairman opined, however, that guideline would not have legal effect in protecting employees against wage reduction. He asked how the Administration would ensure that employees would not be victimized in times of wage reduction. In response, C for L said that guidelines needed to be issued for employees to help them consider whether or not to accept a change in the employment terms and that the guidelines would be submitted to LAB for consideration. She cited an example in Singapore where a similar guideline was published by a tri-partite group comprising the government, employers and employees. C for L hoped that the guidelines would help employers handle the matter in a fair and humane way.

27. In response to a follow-up question from Miss CHAN Yuen-han, C for L said that employees were provided with an option to calculate severance pay based on an average salary over a period of 12 months rather than the salary of the last month.

28. Mr CHAN Wing-chan concurred with Miss CHAN Yuen-han that the Administration should consider amending the existing legislation in order that employees' benefits be protected.

29. Mr LEE Cheuk-yan tabled a paper at the meeting. (The paper was circulated to absent members vide LC Paper No. CB(2) 350/98-99). The Administration undertook to give a written reply to the three proposals he made in relation to employees' rights to be notified before the employer proceeded to change the employment terms, to negotiate and to claim severance pay, long-service payment etc. if employees did not accept the change in the employment terms.Adm

30. Concurring that employers should give adequate notice to employees when changing employment terms, Mr James TIEN Pei-chun opined that it would be reasonable to provide employees with seven days to decide whether or not to accept change in employment terms. He also suggested that ways to calculate severance pay and long service payment should be specified as clear as possible and that they should also be considered by LAB.

31. Mr Andrew CHENG suggested that heavier penalty be imposed on unscrupulous employers when the employment terms were changed. In this connection, Mr Szeto Wah advocated that legislation should be introduced to protect employees when employers initiated a change in employment terms. Employees should have a right to know and should be notified whereas trade unions should be informed when employers intended to change employment terms. Furthermore, severance pay and long service payment should be calculated with a view to avoiding financial loss to employees.

V. Proposed legislative amendments to enhance industrial safety(a) Factories and Industrial Undertakings (Confined Spaces)Regulation LC Paper No. CB(2) 302/98-99(07)

32. Members noted that a subcommittee had been formed at a recent meeting of the House Committee to study regulations relating to occupational safety and health. The resolution under Section 7 of the Factories and Industrial Undertakings Ordinance would be studied by the Subcommittee.

33. At the request of the Chairman, Principal Assistant Secretary for Education and Manpower (PAS(EM) 7) briefed members on the information paper. PAS(EM) 7 said that in the light of enforcement experience, it was difficult to establish that a workplace in question was indeed a confined space because of the need to prove the presence of dangerous fumes to such an extent as to involve risk of person being overcome. Even after an accident had occurred, the prosecution had to prove that dangerous fumes were present in the space at the time of the accident and that their concentration was to such an extent as to have overcome the persons involved. The new Regulation aimed to overcome enforcement difficulties under the existing Regulation and to provide better protection for workers entering or working in confined spaces. It would re-define more clearly what constituted a confined space for easier enforcement. In addition, it would require proprietors or contractors to take the following safety measures -
  1. to conduct a risk assessment by a competent person;

  2. to certify that all necessary precautions had been taken;

  3. to ensure that workers entering or working in a confined space were certified workers;

  4. to provide and ensure that workers entering or working in a confined space wear an approved breathing apparatus and safety harness connected to a lifeline if the situation so required;

  5. to have in place emergency procedures; and

  6. to provide the necessary information, instructions and training to all workers involved.
34. As for economic implications, PAS(EM) 7 stated that there would not be additional financial burden on proprietors of industrial undertakings and contractors of construction sites because they already had a duty under the general duties provisions of the Factories and Industrial Undertakings Ordinance and the existing Regulations to adopt a safe system of work to protect the safety and health of workers entering or working in a confined space. As for engaging competent persons to conduct risk assessment and ensuring that workers assigned to work in the confined spaces were certified workers, the competent person could either be a registered safety officer (whose presence on larger construction sites was already required by law) or existing staff of the proprietors and contractors upon completing the necessary training. Existing workers of the proprietors and contractors could also become certified workers after completing a short training course of two to three days on confined space work. The additional cost involved in complying with the new Regulation would therefore be minimal for most duty holders and they should be able to absorb them with no difficulty.

35. Mr Andrew CHENG opined that similar protection should be provided to workers operating in settings other than confined spaces. In this regard, the new Regulation should be incorporated into the Occupational Safety and Health Ordinance. On the other hand, he wondered if an employee had a right to refuse to perform dangerous duties. In response, PAS(EM) 7 said that it was very rare that a confined space was found in non-industrial setting and that the Factories and Industrial Undertakings Ordinance already covered most work environments where confined spaces existed. Given the provision of confined spaces in the Factories and Industrial Undertakings Ordinance, it was logical to amend the relevant part of it so that a new proposal could be made to improve the situation. Nevertheless, PAS(EM) 7 agreed that new regulations should be considered in the context of the Occupational Safety and Health Ordinance in future. In addition, Assistant Commissioner for Labour (Occupational Safety & Health) (AC for L(OSH)) confirmed that there were legal provisions ensuring the right of an employee to refuse dangerous work ordered by an employer.

36. In response to Mr James TIEN Pei-chun, PAS(EM) 7 advised that the penalties for contravening the Regulation, which was mentioned in Para. 8 of the information paper, was applicable both to employers and employees despite variations in the amount of the fine, etc. AC for L(OSH) added that it would be an offence on the part of an employer if he was in breach of the new Regulation to provide necessary safety measures to his employees entering or working in confined spaces. In the meantime, an employer might dismiss an employee if the latter refused to take the necessary safety measures, given that this was a reasonable demand made after a risk assessment by a competent person. In acceding to Mr Andrew CHENG's request, PAS(EM) 7 undertook to provide the number of safety officers and the training they received in the Subcommittee's meeting.

(b) Construction Site (Safety)(Amendment) Regulation 1998
LC Paper No. CB(2) 302/98-99(08)

37. At the request of the Chairman, PAS(EM) 7 took members through the information paper. He said that the proposal was to amend Part VA of the existing Regulations to -
  1. define working at height;

  2. define the safety standards to be achieved;

  3. spell out the legislative intention that, as far as possible, working at height (i.e. of two metres or more) should be kept to the minimum. Where it was necessary for workers to work at height, the contractor had to provide proper working platforms. If it was not practicable to do so, safety nets and safety belts/harnesses should be provided;

  4. require the contractor to show that it was impracticable to use working platforms or safety nets.
A new Third Schedule was added to the existing Regulations to provide for the technical details of the safety measures so that future changes in the safety measures as a result of technological developments could be incorporated into the code without recourse to amending the law. The Amendment Regulation would come into effect six months after enactment to allow time for the construction industry to be familiar with the safety standards relating to safety nets which had not been commonly used in Hong Kong.

38. PAS(EM) 7 added that for cases where flexibility should be applied, C for L would give exemption to a contractor if the latter could prove that it was impracticable to use working platforms or safety nets in a construction site.

39. Mr LAU Chin-sek suggested that the wordings of the Amendment Regulation should be tightened to ensure that working platforms and safety nets be provided by contractors. In response, AC for L(OSH) said that it was the legal obligation for the contractor to satisfy the court that it was impracticable to use working platforms and safety nets.

40. In response to Mr Andrew CHENG, PAS(EM) 7 said that the Administration realized that the existing Factories and Industrial Undertakings Ordinance was not up-to-date and many of its provisions needed to be amended. In the long-term, the Administration planned to replace it by the Occupational Safety and Health Ordinance but this would have to be done gradually, with broader consideration given to the matter when legislative amendments were contemplated.

41. The meeting ended at 4:55 p.m.

Legislative Council Secretariat
23 October 1998