PLC Paper No. CB(2)85
(These minutes have been seen
by the Administration and cleared
with the Chairman)
Ref: CB2/BC/12/96

Bills Committee on Employment (Amendment) (No.4) Bill 1996

Minutes of the Second Meeting on Tuesday, 18 March 1997 at 8:30 am in Conference Room A of the Legislative Council Building

Members Present :

    Hon LEE Cheuk-yan (Chairman)
    Hon Michael HO Mun-ka
    Hon James TIEN Pei-chun, OBE, JP
    Hon CHAN Wing-chan
    Hon LEUNG Yiu-chung

Members Absent :

    Hon MOK Ying-fan
    Hon TSANG Kin-shing

Public Officers Attending :

    Ms Esther LEUNG
    Principal Assistant Secretary for Education and Manpower
    Mr TSANG Kin-woo
    Assistant Commissioner for Labour

Attendance by Invitation :

    Representatives of Employers

    Hong Kong General Chamber of Commerce

    Mr Poon YUN
    Chairman - Human Resource Committee
    Mr Alan LUNG
    Human Resources Committee member

    Federation of Hong Kong Industries

    Mr Andrew LEUNG
    Deputy Chairman
    Mr Roger TAM
    Administrative Officer

    The Chinese Manufacturers’ Association of Hong Kong

    Mr Joseph LAU
    Executive Committee Member
    Mr Francis LAU
    Executive Secretary

    Employers’ Federation of Hong Kong

    LAM Pik-yu, Margaret
    Assistant Manager

    Hong Kong Construction Association

    Patrick CHAN
    Secretary General

    Textile Council of Hong Kong

    Mr S K CHAN
    Honorary Chairman

    Mr Kenneth FANG

    Federation of HK Garment Manufacturers

    Mr CHAN Wing-kee

    HK Garment Manufacturers Association

    Dr Harry LEE

    HK Knitwear Exporters & Manufacturers Association

    Mr Willy LIN

    HK Woolen & Synthetic Knitting Manufacturers’ Association

    Mr Michael CHAN

    The HK Association of Textile Bleachers, Dyers, Printers and Finishers

    Mr KWAN Kon-wah

    The HK Cotton Spinners Association

    Mr Clement CHEN

    The Federation of HK Cotton Weavers

    Mr Sam T S CHEN
    Vice Chairman

    HK Cotton Made-up Goods Manufacturers Association

    Mr Peter PANG
    Vice Chairman

    The HK Weaving Mills Association

    Mr LUI Chun-fan
    Vice President

    HK Chinese Textile Mills Association

    Mr PANG Woon-tong

    Hong Kong Electroplating Trade Merchants Association

    Mr LAM Kit-to
    Representatives of Employees

    The Neighbourhood and Workers Service Center

    LEE Wing-ka
    Executive Officer

    Clothing Industry Clerical and Retail Trade Employees’ General Union

    CHEUNG Lai-hai
    Executive Officer

    CHAN Ka-lan

    CHAN Wai-ling

Clerk in Attendance :

    Mrs Mary TANG
    Chief Assistant Secretary (2)4

Staff in Attendance :

    Miss Anita HO
    Assistant Legal Adviser 2
    Miss Joanne MAK
    Senior Assistant Secretary 2(4)

I. Matters arising

The Chairman informed that the Administration had been unable to provide information on the distribution of the 125 lay-off cases by nature of employment and number of lay-off days as requested by members at the last meeting.

II. Meeting with employer/employee groups

Views of employers’ groups

2. On behalf of the Bills Committee, the Chairman welcomed the representatives from 17 trade associations and also those from the employees’ groups to the meeting.

3. Representatives of the 17 trade associations were unanimously opposed to the Bill and made the following points -

  1. Representatives stated that the problem of underemployment was only confined to the "sunset" industries. The proposed legislative amendment would only polarize the relationship between the employers and employees and have an adverse impact on the financial viability of the small manufacturing industries. In the end it would speed up the closing down of the "sunset" industries and jeopardize the employment opportunities in Hong Kong;

  2. The long-term solution to help workers suffering from underemployment should be by re-training;

  3. Production from time to time was forced to suspend temporarily due to unforeseen circumstances or seasonal fluctuations. By the current lay-off provision, flexibility had been provided for employers to tide over these periods without having to dismiss their workers;

  4. Based on Government information, the underemployment rate had been declining since 1990 and the problem was not so serious to call for amendment of the lay-off provision;

  5. There had been much concern about the lack of consultation with the Labour Advisory Board (LAB) where the interests of both the employers and employees’ groups were represented. This had discredited the well-established tripartite system of LAB which provided a forum for discussion amongst employers, employees and the Government; and

  6. The existing lay-off provision which ensured an income of two-thirds of the monthly wages during a period of 26 weeks for the workers had stricken a balance of interest between them and the employers and thus should be upheld.

4. Some representatives also considered that the Bill did not take into account the difficulties faced by their respective industries. Mr Patrick CHAN of the Hong Kong Construction Association explained that the construction industry was specially prone to inclement weather such as rainy days and typhoons. With the passage of the proposed Bill, Mr CHAN believed that more workers would ask for lay-off during periods of prolonged inclement weather, or when there was suspension of work caused by delayed supply of construction materials. The anticipated increase in claims for severance payments would add on to the construction cost and would in turn push up property prices. Overall speaking, it would have an adverse impact on the Hong Kong economy.

5. In response to Mr LEUNG Yiu-chung’s question, Mr CHAN explained that although sub-contracting system was generally adopted in the construction industry, employment on a monthly salary basis was also common especially for large construction projects.

6. As regards the Hong Kong garment industry, Dr Harry LEE of the Hong Kong Garment Manufacturers Association explained that in order to keep up the competitiveness of the industry, it was essential to keep a pool of skilled workers at all times. Dr LEE stressed the need for quick response and flexibility in upkeeping the competitiveness of the Hong Kong garment industry, where the workers’ wage rate (HK$160 to $200 per day) was much higher than that in the nearby countries (US$1.5 per day). As the Bill would increase the labour cost, it would be difficult to maintain the pool of workers at all times to meet operational needs.

7. Mr Jay LEUNG of the same Association added that there had already been extra costs incurred by various legislative amendments made to labour laws from time to time. He opined that members should take these into account in considering the financial implications of the Bill.

8. Mr Clement CHEN of the Hong Kong Cotton Spinners Association pointed out that once the staff were laid off at slack seasons, it would be difficult to recruit them again at peak seasons. Therefore, the enactment of the Bill would bring about operational problems to the employers.

9. Mr Willy LIN of Hong Kong Knitwear Exporters & Manufacturers Association explained that the textile industry was so closely connected with the manufacturers in China that their protracted holidays of the Lunar year would hold up to a large extent the local production. Therefore, if the Bill was passed, most of these knitwear factories would have to close down during the Chinese New Year since suspension of work was quite common then.

10. Mr Peter PANG of the Hong Kong Cotton Made-up Goods Manufacturers Association reiterated that under-provision of work was due to many factors beyond the employers’ control. He pointed out that medium and small scale entrepreneurs, making up of over 90% of the manufacturing sector in Hong Kong, were already facing very heavy fixed overhead costs. Mr John YUNG of the same Association quoted that the number of bleachers and dyers factories had dropped from eight to one since 1983. Passage of the Bill would further increase their production cost and lead to their closedown.

11. Mr LAM Kit-to of the Hong Kong Electroplating Trade Merchants Association pointed out that business of the industry was already on the decline and it would not be able to cope with the increased financial burden posed by the Bill.

12. The representatives of employers’ groups criticized not only the undesirable impact of the Bill but also Mr LEUNG Yiu-chung, Member in charge of the Bill, for not informing the Textile Council of Hong Kong of this meeting since Mr LEUNG was the representative of the textile and clothing sector in the Legislative Council. The Chairman clarified that it was the decision of the Bills Committee to invite only the five major trade associations in the belief that they would further inform their members of this meeting. However, Mr S K CHAN of the Textile Council of Hong Kong opined that Mr LEUNG Yiu-chung had the responsibility of directly informing the Textile Council himself instead of routing information through the Hong Kong General Chamber of Commerce.

13. Mr Andrew LEUNG of the Federation of Hong Kong Industries was of the view that the length of notice of the meeting given to the Federation was too short for it to fully consult its members’ views prior to this meeting. Mr LEUNG requested to reserve the right of expressing opinions of the Federation’s members in writing afterwards.

Views of employees’ group

14. Representatives of workers and labour unions expressed full support to the Bill. In response to the criticisms raised by representatives of the employers’ group on the Bill, Mr LEE Wing-ka of the Neighbourhood and Workers Service Centre rebutted by saying that any labour legislation aimed at improving workers’ welfare would inevitably increase production cost. He pointed out that many piece-rated workers had suffered from prolonged periods of under-provision of work and were unable to meet the cost of living. Under existing legislation, workers could only receive half the normal monthly wage equivalent to 12 days’ pay. However, under the proposed provisions of the Bill, workers would at least have 16 days of paid work each month. He considered that employers should not be only concerned about maintaining their competitiveness but should also review the situation from the perspective of employees.

15. Ms CHAN Ka-lan and Ms CHAN Wai-ling, representatives of workers, gave accounts of their experiences of under-provision of work. They claimed that they were generally provided work for only 12 days in a month for the past few years, which had posed great problems to their livelihood. Ms CHAN Ka-lan said that in the past six years, full provision of work had not ever lasted for more than three months. Miss CHEUNG Lai-hai, representative of the Clothing Industry Clerical and Retail Trade Employees’ General Union, supplemented that the problem of under-provision of work was particularly serious in the textile and clothing sector, where the workers generally worked for only five or six hours a day and were idle for most of the time. For the piece-rated workers, their wages earned were inadequate to cover their cost of living. Therefore, many workers preferred to claim for severance payments and look for another job which could provide them with a stable income. She also pointed out that the under-provision of work was mainly due to the relocation of the manufacturing base to China rather than due to delayed supply of raw materials or for any other reasons. She opined that the employers should improve the terms for Hong Kong workers and provide better protection for them since there had been much savings with the relocation of part of the production process to China.

Consultation with LAB

16. The Assistant Commissioner for Labour (Labour Relation) (AC(LR)) explained that the Administration would take the active role of submitting a bill to LAB for discussion only when it was introduced by the Administration. Since the Bill under discussion was introduced by Mr LEUNG Yiu-chung, it would be up to Mr LEUNG, as Member in charge of the Bill to decide whether the Bill should be referred to LAB. With consent given by Mr LEUNG and the Bills Committee, the Administration would make the necessary arrangements for LAB to discuss the Bill.

17. Mr LEUNG Yiu-chung pointed out that at the meeting of the LegCo Panel on Manpower on 1 November 1996, Mr TIEN Pei-chun had already requested the Administration to refer the Bill to LAB. Mr LEUNG said that since he was also present at that meeting and did not raise any objection, his agreement to Mr TIEN’s proposal was clear. However, the Principal Assistant Secretary (Education and Manpower) (PAS(EM) and AC(LR) reiterated that the Bill was a Member’s Bill. The initiative of consulting LAB on the Bill rested with the proposer of the Bill. Therefore, Mr LEUNG had to make a request direct to the Administration or LAB regarding the referral of the Bill to LAB in the first place.

18. Mr Michael HO was dissatisfied with the explanation of the Administration. In particular, he failed to see why the Bills Committee had to deliberate on whether the Bill should be discussed by LAB. He was of the view that the Bills Committee was only responsible for scrutinizing the Bill. After some discussion, AC(LR) agreed that the Bills Committee’s consent was not required. In response to Mr Michael HO, AC(LR) confirmed that the consent of the Member in charge was required if the Bill was to be referred to LAB for deliberation.Adm

19. Upon Mr LEUNG Yiu-chung’s confirmation that he wished LAB to discuss the Bill, AC(LR) undertook to make the arrangements.

III. Legislative timetable

20. Members agreed that further discussions on the Bill should be withheld pending deliberations on the Bill by LAB at its next meeting scheduled for 21 April 1997.

21. The meeting ended at 10:40 am.

Provisional Legislative Council Secretariat
23 July 1997

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