ISE19/14-15

• At its meeting of 8 July 2015, the Council passed the Special Holiday (3 September 2015) Bill to designate 3 September 2015 on a one-off basis as both a statutory holiday and a general holiday so as to facilitate community participation in various commemorative activities to mark the 70th anniversary day of the victory of the Chinese people's war of resistance against Japanese aggression. In Hong Kong, a statutory holiday is not equivalent to a general holiday. Under the Employment Ordinance (Cap. 57), an employee, irrespective of his or her length of service, is entitled to 12 days of statutory holidays a year. The employee is further entitled to holiday pay if he or she has been employed under a continuous contract for three months or more immediately before a statutory holiday. In addition to statutory holidays, employees are entitled to rest days, annual leave with pay, maternity leave/paternity leave and sick leave.
• The General Holidays Ordinance (Cap. 149) provides that there shall be 17 general holidays a year, in addition to Sundays, to be kept as holidays by all banks, educational establishments, public offices and Government departments. While general holidays are holidays for the establishments referred to above, as a matter of practice, these establishments also grant paid leave to their employees on these days. Many business and commercial undertakings also grant paid leave to their staff on general holidays. Nevertheless, such an arrangement is a contractual agreement only, and it is up to the employers to decide whether their employees should be required to work or otherwise on these days and whether their employees should be paid if they are not required to work on these days.
• According to the Labour and Welfare Bureau, staff welfare is not the intent of the General Holidays Ordinance (Cap. 149). Yet many workers, in particular the white-collar workers, enjoy 17 general holidays while the other workers, mostly blue-collar workers, are entitled to 12 statutory holidays only. Therefore, there have been calls for alignment of statutory holidays^{1Legend symbol denoting Currently, all the 12 statutory holidays are general holidays and there are five days of general holidays which are not statutory holidays. They are Good Friday, the day following Good Friday, Easter Monday, the Buddha's Birthday, and the first weekday after Christmas Day.} with general holidays. This issue of Essentials gives a brief account of the background and development of general holidays and statutory holidays in Hong Kong.

General holidays

• In 1875, the then Legislative Council legislated for the first time on general holidays by enacting the Holidays Ordinance. The Holidays Ordinance was adopted from the Bank Holidays Act 1871 ("the Act") of the United Kingdom ("the UK"), the first legislation in the UK in relation to general holidays. The Act specified four days as holidays for banks. The four days comprised Easter Monday, Whit Monday, the first Monday in August and the day following Christmas Day.^{2Legend symbol denoting In addition to the specified four days, banks need not open on Sundays, Christmas Day and Good Friday.} While the Act only conferred powers on the UK government to suspend financial and other dealings on the holidays and did not require banks to have bank staff take leave on these days, most bank staff in the UK enjoyed time-off or paid leave on the bank holidays. The intention was that by closing the banks and thus stopping the sinews of trade, this would put a stop to all business transactions on the appointed bank holidays and give the whole community a holiday on such days^{3Legend symbol denoting See Hansard of the UK House of Commons, 24 February 1875.}.
• Likewise in Hong Kong, the Holidays Ordinance provided for nine days, other than Sundays, that banks need not open. The nine holidays comprised Christmas Day, Good Friday and the four days of bank holidays as specified in the Act, in addition to the first day of January, Lunar New Year's Day and the Queen's birthday. Financial and other dealings were suspended on these days. While a few bank staff might have to work on these holidays, most bank staff could enjoy paid leave on these days. The Holidays Ordinance also stipulated that public offices and Government departments need not open on five out of the nine holidays, other than Sundays. Most staff of public offices and Government departments were granted paid leave on these days.
• In 1912, the Government amended the Holidays Ordinance after consulting the Chamber of Commerce and banks. The amended Holidays Ordinance removed the Empire Day from the list of holidays and introduced two new general holidays on Mondays in October and November in order to distribute the holidays more evenly throughout the year and increase the number of holidays for workers^{4Legend symbol denoting At the second reading of the Bill to amend the Holidays Ordinance in 1912, the then Attorney-General, mover of the Bill, stated that "this arrangement distributes the bank holidays more evenly and affords a fitting respite from toil at appropriate intervals."}. All these general holidays were kept as holidays by banks, public offices, Government departments and educational establishments.
• Since then, the Holidays Ordinance has been amended several times to add and/or remove holidays from the list of general holidays for the following reasons:
  
  

  (a)	to celebrate or commemorate special days or events - e.g. the National Day, the Hong Kong Special Administrative Region Establishment Day, Labour Day, the liberation of Hong Kong from the Japanese occupation on 30 August (now removed), and Remembrance Day (now removed); and/or
  (b)	to have festive activities on a number of festivals - e.g. Chinese Mid-Autumn Festival Day, Ching Ming Festival, Chung Yeung Festival, Tuen Ng Festival, the second and third day of Lunar New Year, and the Buddha's Birthday.

• The Government has advised that the list of general holidays is drawn up on the basis of major traditional festivals and religious holidays celebrated in Hong Kong, and is broadly in line with those celebrated by Hong Kong's major trading partners to reduce disruption to the financial markets. Reference has also been made to the practice of other countries and international holidays. As general holidays affect a wide range of establishments such as banks, educational establishments, public offices and Government departments, the Government will seek views of major organizations of employers and employees and the financial sector about their preference on the addition or removal of general holidays before proposing any changes.
• The number of general holidays has stood at 17 since 1967. Following a decision of the Chief Executive in Council on 18 November 1997, the Government announced that the total number of general holidays, other than Sundays, should be capped at 17 days a year. According to the Government, Hong Kong has already compared favourably with overseas countries especially its major trading partners in the number of general holidays. Increasing the number of general holidays in Hong Kong would adversely affect Hong Kong's economic competitiveness, as an additional holiday would cost employers an additional 0.2% in wage payments which amounted to about HK$600 million in the 1998 wage level.

Statutory holidays

• Since the 1950s, Hong Kong had experienced rapid industrialization. A large labour-intensive manufacturing sector had sprung up.^{5Legend symbol denoting For example, the number of garment factories surged by 84 times from 41 in 1950 to 3 491 in 1970. The number of workers engaged in garment factories increased rapidly by 75 times from 1 944 to 148 025 over the same period.} Many industrial workers worked long hours every day and there was no provision for statutory holidays, annual leave or rest days. At that time, industrial workers could only take holidays by foregoing their wages.
• In 1961, the Government amended the Industrial Employment (Holidays with Pay and Sickness Allowance) Ordinance ("Ordinance") to provide for statutory holidays with pay to workers employed in industrial undertakings (such as factories, quarry sites and construction sites). The amendments aimed to "prescribe reasonable minimum standards [of labour benefits] for all qualified industrial workers".^{6Legend symbol denoting See Official Report of Proceedings, 29 November 1961.} By making reference to the Holidays with Pay Convention 1936 promulgated by the International Labour Organization, the Government designated six paid days as statutory holidays.^{7Legend symbol denoting Established in 1919, the International Labour Organization aims to promote rights at work, encourage decent employment opportunities, enhance social protection and strengthen dialogue on work-related issues. As a founding member, the UK has applied various international labour conventions to its colonies including Hong Kong.}
• Under the amended Ordinance, manual workers and non-manual workers (with average monthly earnings not exceeding HK$700 at that time) were entitled to statutory holidays^{8Legend symbol denoting Only those employees who had worked for their employers for 180 days in the preceding 12 months and on 20 of the preceding 28 days were entitled to full pay for the statutory holidays.}. As the beneficiaries would mainly be local Chinese workers, the six statutory holidays were all associated with traditional Chinese festivals, namely Lunar New Year's Day, the day following Lunar New Year's Day, Ching Ming Festival, Tuen Ng Festival, Chinese Mid-Autumn Festival, and Chinese Winter Solstice Festival. The Government estimated that the introduction of statutory holidays would benefit over 300 000 local workers.
• Since the 1960s, the Legislative Council has passed a number of bills to improve labour conditions.^{9Legend symbol denoting In 1968, the Government proposed a programme of 33 legislative proposals to improve labour conditions in Hong Kong, of which the centrepiece was the Employment Ordinance (Cap. 57). Most proposals including laying down the concept of continuous employment contracts, provision for wages protection and statutory entitlements for redundancy payments were incorporated in the Employment Ordinance (Cap. 57) in 1968 when it was first enacted. Since then, the Employment Ordinance (Cap. 57) was amended several times to provide for, among others, paid rest days and paid annual leave.} Nevertheless, there was concern about the different treatment of blue-collar workers and white-collar workers with the former getting paid statutory holidays and the latter getting paid general holidays. In June 1981, the Government conducted a consultation exercise on general and statutory holidays. The results showed divergent views between employers and employees. Employers were generally not supportive of any changes in the number of general and statutory holidays, whilst many of the employees favoured increasing the statutory holidays to the same number of the general holidays. They also considered that the additional statutory holidays should be provided as floating holidays to allow greater flexibility to employers and employees. Consequently, an additional floating statutory holiday was provided for in 1983.
• Another statutory holiday was added on Labour Day in 1999. Since then, the number of statutory holidays has stood at 12. According to the Government, if one looks solely at the total number of statutory paid leave (including annual leave as well), Hong Kong compares favourably with other Asian economies in this respect.^{10Legend symbol denoting Among various advanced Asian economies, Taiwan is the most generous where employees enjoy 26-49 days of paid leave a year (19 paid general holidays and 7-30 days of annual leave with pay, which is subject to the employee's length of service), followed by Hong Kong (19-26 days of paid leave a year comprising 12 statutory holidays and 7-14 days of annual leave with pay), Singapore (18-25 days of paid leave a year comprising 11 paid general holidays and 7-14 days of annual leave with pay), South Korea (16-26 days of paid leave a year comprising one paid general holiday and 15-25 days of annual leave with pay), and Japan (10-20 days of annual leave with pay and no paid general holiday).}

Impact of increasing the number of statutory holidays

• The Labour Department commissioned the Census and Statistics Department to conduct a survey in the second quarter of 2011 to collect data on the impact of increasing the number of statutory holidays. The results show that about 2.8 million employees (excluding foreign domestic helpers) in Hong Kong are eligible for statutory holidays and about half of them, or 1.4 million, are also taking general holidays. Increasing the number of statutory holidays would benefit the remaining 1.4 million employees. Workers in low-paying industries such as restaurants, estate management, security and cleaning services, food processing and production, laundry and dry cleaning services, and retail would be the major beneficiaries if the number of statutory holidays is increased.
• The Government Economist has estimated that the cost for an additional statutory holiday amounts to HK$0.37 billion based on the 2011 wage level. Nevertheless, part of the cost might be offset by an increase in business receipts as more people might go out for shopping, dining and entertainment, thereby stimulating consumption in such sectors as retail and restaurants.

Prepared by YU Chun-ho
Research Office
Information Services Division
Legislative Council Secretariat
10 August 2015