Legislative Council Panel on Manpower
Meeting on 23 March 1999
The Administration's Response to the issues raised in a Paper Submitted by the Society for Community Organisation to the LegCo Panel on Manpower


This paper contains the Administration's comments on the issues raised in a paper prepared by the Society for Community Organisation (SOCO) on Elderly Persons at Work in Sham Shui Po.

Eliminating Age Discrimination on Employment

2. The Government is committed to eliminating discrimination in a wide range of areas, including age. We consider that the most effective and appropriate way to eliminate age discrimination is through a sustained programme of publicity, public education and self-regulation because age discrimination is more related to the perception or attitudes of the community as a whole.

3. In this respect, we issued the "practical guidelines for employers on eliminating age discrimination in employment" in February last year. An Announcement of Public Interest (API) encouraging employers to hire on the basis of ability, not age, has been running since March 1997.

4. In addition to public education programme, the Local Employment Service (LES) of the Labour Department (LD) has put in place measures to forestall discriminatory practices against job seekers. These measures include ensuring that no job vacancy orders received from employers carry age restrictive or other discriminatory requirements. Details of other measures can be found in para. 22 below.

Setting up an old age pension scheme

5. In order to ensure that the elderly can have a secure and stable life, the Administration emphasises the introduction of an effective retirement protection system. We carried out extensive consultation on retirement protection in 1992 and 1993-94, and considered in depth different proposals of retirement protection.

6. With subsequent careful examination into overseas countries' experience, the Government proposed that a mandatory, privately managed model offering retirement protection would offer the best long-term advantages. The Legislative Council subsequently enacted the Mandatory Provident Fund Schemes Ordinance (Cap. 485) in July 1995 and relevant subsidiary legislation in April 1998. For members of the aged public who do not belong to the working population, they will be protected by the Comprehensive Social Security Assistance and the Old Age Allowance.

To strengthen promotion of labour legislation so that elderly employees will know the relevant provisions

7. The LD attaches great importance to informing employees, including the elderly, of their rights and benefits as provided under the Employment Ordinance (EO) and other labour legislation. To this end, the LD regularly publicises the labour laws through exhibitions, mass media programmes, publications, the department's homepage on the Internet, posters and telephone enquiry service. These activities include two TV and radio APIs on employment contract, and six exhibitions, etc. One of the exhibitions was held at Sham Shui Po in September last year.

8. In December last year, staff from the LD explained in detail the provisions of severance payments and long service payments in a radio interview targeted at the elderly employees. Also, to facilitate the elderly employees to enquire on the EO and labour relations issues, the LD's Labour Relations Services (LRS) accords priority service to elderly enquirers at its consultation counters.

The LD should strengthen its prosecution against unscrupulous employers so as to protect elderly employees against unreasonable exploitation

9. The LD seeks to protect the employees' (including elderly employees') statutory rights and benefits. Labour Inspectors carry out inspections at workplaces of various industries and trades to ensure that employers comply with the conditions of employment prescribed by the EO. Should there be any complaints on non-compliance with the EO, the LD will promptly conduct investigation. Prosecution will be taken out when there is evidence of employers breaching the law.

10. In 1998, the LD secured 3 515 convictions for summonses laid against contraventions of the EO, with a total fine of $4.36 million.

Speeding up the construction of public housing for the Elderly People

11. The Government fully recognizes the need to provide adequate supply of public housing flats with suitable facilities to the elderly people. To this end, we have pledged -

  1. to continue to provide public rental flats, with suitable facilities and services, for allocation to elderly people.

    In the five years between 1997/98 and 2001/02, 30 000 public rental flats will be provided to the elderly.

    At present, the average waiting time for a single elderly person to be allocated a Housing for Senior Citizen unit is two years, while that for a public rental flat is four years. By 2008, single elderly people will only need to wait for about two years to be allocated a public rental flat.

  2. to expand our existing Housing for Senior Citizens (HSC) Scheme to provide more specially designed rental housing units with warden service to able-bodied elderly persons not living with their families.

    In 1997/98, over 1 100 specially designed rental housing units were produced under the HSC Scheme.

To simplify and shorten complaint procedures, set out time pledge in order to enhance efficiency and minimise the loss to complainants

12. Any employee who is not given their rights and benefits under the EO and their employment contract can seek advice and assistance from the branch offices of the LRS of the LD. Where monetary claims are involved, the LRS will arrange conciliation meetings to assist both parties to resolve the case.

13. The LD has planned to improve the consultation and conciliation services of LRS in 1999-2000 by deploying more professional staff to man the enquiry counter, providing cross-district registration of employment claims and express service for clients with particular needs (e.g. the elderly).

Setting up of an industry-based collective bargaining mechanism to ensure that employees are given the rights to pursue their reasonable benefits

14. The Government considers that there is no need for Hong Kong to legislate for mandatory collective bargaining because the existing practice of voluntary and direct negotiation between employers and employees at enterprise level, underpinned by the conciliation service rendered by the LD, has been working well. Notwithstanding this, it has been the Government's policy to encourage and promote voluntary negotiation between employers and employees or their respective organisations.

15. To strengthen the promotion of effective communication, consultation and voluntary negotiation between employers and employees on employment issues, the LD has set up the Workplace Consultation Promotion Unit since April 1998. The main functions of the Unit include assisting employers to develop effective machinery for staff communication and voluntary negotiation and drawing up codes of practices for reference by employers and employees.

To review the feasibility of the proposals of maximum working time and minimum wage

Review on Working Time

16. Introducing comprehensive statutory control on working hours may increase labour costs substantially. Restrictive control over working hours will also impose artificial constraint on the capacity of the labour market and the economy as a whole, thereby restraining the ability of the economic system to make flexible adjustment.

Minimum Wage

17. The position of the Government is that there is no need to introduce minimum wage in Hong Kong for the following reasons:

  1. imposition of a minimum wage in Hong Kong will not only distort the wage structure in our labour market, but also increase rigidity of wage adjustment, particularly during an economic downswing. As a result, it would impair the ability of the business sector and our economy as a whole to adjust to external shocks.

  2. adopting a minimum wage in Hong Kong will undermine the inherent incentive of our workforce, especially the less skilled and lower-paid workers, to improve and upgrade their quality, which will not be beneficial to the development of our economy in the long term.

  3. any statutory minimum wage which deviates from the market-determined level will not necessarily be beneficial to employees. On the contrary, it will have an adverse impact on their employment opportunities. If the minimum wage is set below the market-determined level, some employers may refuse to pay higher than the minimum wage and the minimum wage may in effect become the maximum wage. If the minimum wage is set higher than the market-determined level, the labour cost may be too high for certain trades to remain competitive or viable, and as a result, some companies will have to scale down or even close down their operation. This will lead to an overall reduction in employment opportunities and an increase in unemployment. This is especially so at times of economic downturn or economic recession. In such circumstances, the less skilled and less qualified workers, especially the elderly, the disabled or marginally employable workers will stand the highest chance of being out-competed by other employees at the same minimum wage.
To review the existing labour legislation and plug the loopholes so that the elderly employed on contract terms or contract for service can still get long service payment

18. Employees, irrespective of whether or not they are on fixed-term contract, enjoy equal protection under the EO. Contract employees who have been employed under a continuous contract (i.e. working continuously for 4 weeks or more, with at least 18 hours in each week) for not less than 5 years will be entitled to long service payment if they are dismissed by their employers (otherwise than by reason of serious misconduct or redundancy), die in service, or resign on the ground of ill health. Employees aged 65 or above and with 5 years' service will also be entitled to long service payment upon resignation.

19. The EO does not apply to contracts for service as they do not involve an employment relationship. We advise the job seekers, including the elderly, to ascertain before appointment whether they are engaged under an employment contract or a contract for service. They can seek advice from the LRS if in need.

To lower the qualifying age for long service payment from 65 to 60

20. The Government has already lowered the qualifying service for entitlement to long service payment from 10 years of service to 5 years in 1995. It is the policy of the Government to improve employees' rights and benefits progressively, in a way which is commensurate with the pace of Hong Kong's social and economic development and to strike a reasonable balance between the interests of employers and employees.

To consider introducing employment benefits for the elderly or tax concessions to promote the employment opportunities of the elderly

21. In order to enhance the employment opportunities of the elderly, it is necessary to improve their working ability so that employers accept that they have definite contributions to make. Providing financial incentive is contrary to this principle.

22. The LES of the LD provides free employment service to all job-seekers. The LES provides special employment assistance to the elderly by:

  1. providing priority counter service to elderly job-seekers whereby they are not required to obtain appointment chits for job referral service;

  2. for those elderly job-seekers who have difficulties in finding jobs, providing intensive and personalised employment and counselling service under the Job Matching Programme; and

  3. where necessary, referring elderly job-seekers to attend retraining course run by the Employee Retraining Board tailor-made for them.
Education and Manpower Bureau
March 1999