ISE12/20-21

• In Hong Kong, there is suggestion to enact a law prohibiting discriminatory practices (e.g. hiring, remuneration and dismissal) against mature workers aged 50 and above, which cannot be addressed by the existing labour law and the Labour Tribunal.^{1Legend symbol denoting Mature workers are labour force aged 50 and above, including middle-aged workers aged 50-64 and elderly workers aged 65 and above.} According to a survey completed in 2016, more than two-thirds of the local workforce felt that mature persons were the most vulnerable to workplace discrimination, prompting strong calls in the community to address the malpractices.^{2Legend symbol denoting Equal Opportunities Commission (2016), 明報(2019) and Zou, M. (2015).} Reflecting in part the reluctance of employers to make new hiring of older persons, the labour force participation rate ("LFPR") of mature persons in Hong Kong was just 43.1% in 2019, just three-fifths of that of the younger workforce aged below 50 (75.8%).^{3Legend symbol denoting Statistics from Census and Statistics Department through enquiry.} For major neighbouring economies that had enacted age discrimination legislation ("ADL"), LFPF for mature workforce was higher, including Japan (47.7%), New Zealand (56.1%) and South Korea (57.8%).^{4Legend symbol denoting Organisation for Economic Co-operation and Development (2020).}
• Since 1996, the Government has tackled age discrimination largely through public education and self-regulatory guidelines issued to employers. Yet this approach is widely criticized as "insufficient", as employers are not legally liable to such malpractices.^{5Legend symbol denoting Equal Opportunities Commission (2014) and Hugill & Ip Solicitors (2019).} Moreover, the Equal Opportunities Commission ("EOC") does not have statutory power to investigate and follow up reports on age discrimination lodged to it (totalling 1 500 enquiries during 2009-2019).^{6Legend symbol denoting Statistics from Equal Opportunities Commission through enquiry.} Yet the Government had reservation about ADL. In May 2019, the Legislative Council ("LegCo") passed a non-binding motion, urging the Government to enact ADL.^{7Legend symbol denoting Legislative Council Secretariat (2019).}
• Globally, ADL is enacted in at least 50 places, mostly resolving it through civil proceedings.^{8Legend symbol denoting International Labour Organization (2008) and Lewis Silkin LLP (2020).} For New Zealand, its regulatory approach under ADL is even more light-touch, leaning more on mediation than civil litigation.^{9Legend symbol denoting New Zealand Human Rights Commission (2019).} Coupled with the absence of any statutory retirement age (similar to Hong Kong), New Zealand seems to be a good case for local reference. This issue of Essentials discusses recent policy developments against age discrimination in Hong Kong, followed by ADL in New Zealand.

Recent policy developments to address age discrimination in Hong Kong

• Longer career life: Over the past two decades, the number of local mature workers has expanded by 161% to 1.3 million, along with a doubling in their proportion in total labour force from 15.2% to 33.2% (Figure 1).^{10Legend symbol denoting Statistics from Census and Statistics Department through enquiry.} Likewise, LFPR for mature workers has also gone up from 32.5% to 43.1% during 1999-2019, reflecting longer career life upon improved health condition. This is especially so for employees working for the same employers for a long time, along with progressive extension of retirement age from 55 to 65 in the corporate sector and the civil service.

Figure 1 - Labour force and LFPR of mature workers in Hong Kong, 1999-2019

• Workplace challenges faced by mature workforce: However, older workers generally face more challenges in finding new jobs than younger ones, partly due to misconception of their working capability (e.g. slower learners, less adaptable and poorer health).^{11Legend symbol denoting Equal Opportunities Commission (2014 and 2016) and Youth I.D.E.A.S. (2018).} As such, they are also prone to dismissals. Based on a study completed by EOC in 2016, two-thirds (67%) of respondents opined that workers aged 50-59 were "vulnerable to age discrimination", and the respective figure increased to 78% for workers aged 60 and above. Moreover, age ceiling is imposed on work permits of some occupations (e.g. security), hindering capable workers to stay in the jobs.^{12Legend symbol denoting The age limit is specified in the Security and Guarding Services Ordinance (Cap. 460). See GovHK (2018).}
• Enquiries and complaints on age discrimination: Although EOC received enquiries averaging 145 per annum on age discrimination in employment during 2009-2019, it is beyond its ambit of investigation under the existing law. While the Labour Department also received an annual average of 15 complaints concerning such discrimination over the same period, it cannot take legal action because it is also beyond the protection of the Employment Ordinance (Cap. 57).^{13Legend symbol denoting Statistics from Labour Department through enquiry.} Presumably, many victims do not report their cases to the relevant authorities, in view of their limited regulatory power.
• Global regulatory trend: International society has been calling for adopting all appropriate measures, including particularly legislation, to tackle age discrimination.^{14Legend symbol denoting These calls arise from the "International Covenant on Civil and Political Rights" and the "International Covenant on Economic, Social and Cultural Rights".} Globally, those places with enacted ADL mainly resolve employment disputes through civil proceedings. International Labour Organization comments that ADL has played a "substantial role" in protecting older workers.^{15Legend symbol denoting International Labour Organization (2006 and 2008).} In some places in Asia (e.g. Japan and South Korea), financial incentives (e.g. hiring or wage subsides) are also offered to encourage employers to hire or retain older workers. Both "carrots" and "sticks" work together pretty well in these places, as discussed in the research notes entitled "Measures to promote employment of mature persons in selected places" and "Arrangements for people close to or at retirement age in selected places". For Hong Kong, while there are some financial incentives on mature employment (e.g. monthly allowance of up to HK$5,000 paid to employers under the "Employment Programme for the Elderly and Middle-Aged"), there is no legal protection to mature workers from discrimination. This piece thus discusses the pros and cons of the regulatory approach or the "stick" side.
• Local discussion of ADL: In October 1996, the Government decided not to pursue ADL, after a public consultation on age discrimination, citing reasons that such discrimination was not a "serious human rights issue" and ADL could lead to "over-regulation and unnecessary litigation".^{16Legend symbol denoting Education and Manpower Branch (1996).} The Government opted for public education approach instead, issuing practical guidelines on age discrimination to employers for self-regulation since 1998.^{17Legend symbol denoting Labour Department (2006).} Yet reports of unfair treatment against older workers still happen from time to time, renewing calls for more legal protections to older workers from academics and concern groups.^{18Legend symbol denoting Egdell, V. et al. (2017), Zou, M. (2015) and Chan, A. (2013).}
  
  In 2016, EOC published an exploratory study on age discrimination in employment, with 70% of respondents supporting ADL. EOC is planning to conduct another research project on possible legislative framework on ADL during 2020-2022.^{19Legend symbol denoting Equal Opportunities Commission (2019).}
• Social benefits of ADL: ADL could provide a level playing field for older workers, increasing their employment and income security. Also, legal sanction could send a stronger signal to rectify biased views about older workers in society. This in turn could encourage more middle-aged persons or even elderly persons to re-join the labour force, relieving the projected manpower shortage of 5% by 2027 upon shrinkage of labour force.^{20Legend symbol denoting Labour and Welfare Bureau (2019).}
• Issues of concerns: Yet ADL could also lead to more compliance costs to society. First of all, there are worries that lawsuits under ADL are "time-consuming and costly", as it is hard to find evidences (e.g. witnesses or written records) to substantiate or refute claims of age discrimination.^{21Legend symbol denoting Organisation for Economic Co-operation and Development (2019) and International Labour Organization (2006).} Usually, these discriminatory practices take place in a "subtle and not explicit" manner.^{22Legend symbol denoting Egdell, V. et al. (2017).} Secondly, local employers may incur higher cost in hiring older workers, as their medical and labour insurance costs could be three times higher than younger workers.^{23Legend symbol denoting 陳章明(2019).} This could be burdensome for smaller enterprises. Thirdly, while local employers may lose flexibility in manpower management under ADL, younger workers may be concerned with fewer opportunities for upward mobility in their careers. In May 2019, the Government reiterated its negative stance towards ADL, in view of "very complex issues" and its "impact on the socio-economic situation" in Hong Kong".^{24Legend symbol denoting GovHK (2019).}

Age discrimination legislation in New Zealand

• Active participation of older persons in the job market: New Zealand is an island country inhabited by 3.9 million population, within whom 42% are mature persons aged 50 and above. Mature persons in the country have a very strong desire to work, as manifested in a noticeable upsurge of its LFPR from 42.2% to 56.1% during 1999-2019. More specifically for those persons aged 55-64, their LFPR even hit 78.4% in 2019, the third highest amongst the 37 member states of the Organisation for Economic Co-operation and Development ("OECD").^{25Legend symbol denoting Organisation for Economic Co-operation and Development (2020).}
• Workplace discrimination at workplace: That said, New Zealand is not immune from workplace discrimination against older workers. During the economic recession in the early 1990s, many mature workers were laid off or forced to retire involuntarily.^{26Legend symbol denoting Khawaja, M. and Boddington, B. (2009) and Legislative Council Secretariat (1996).} When unemployment rate reached a double-digit level (10.7%) in 1992, age discrimination against older workers in recruitment intensified, with over three-fifths of unemployed people aged 45 and above having stayed jobless for at least six months.^{27Legend symbol denoting New Zealand Prime Ministerial Task Force on Employment (1994).}
• ADL in New Zealand: In response to global pressure to improve human rights and local pressure to protect older workers, New Zealand enacted the "Human Rights Act 1993" ("HRA") in August 1993, followed by the "Employment Relations Act 2000" ("ERA") in August 2000.^{28Legend symbol denoting In addition to age discrimination, both legislations also cover discrimination in employment on grounds of sex, family status, ethnicity, disability and more.} These two laws provide a statutory regulatory framework against age discrimination, with the following salient features:
  
  

  (a)	Scope and coverage of protection: ADL in New Zealand protects all employees aged 16 and above. There are four major protection areas, namely (i) refusing to employ applicants; (ii) offering less favourable terms of employment; (iii) withholding opportunities for training and promotion; and (iv) terminating contract or retiring the employees. It is now unlawful to ask question about age of a job applicant;
  (b)	Discriminatory complaint handled by two public bodies: Unlike ADL in other advanced places, ADL in New Zealand is more light-touch and negotiation-based. In case the disputes over discriminatory practice cannot be resolved internally with employers, mature workers could lodge their complaints to one of the two public bodies, namely Human Rights Commission ("HRC") or Employment New Zealand ("ENZ"). By and large, these two bodies will decide whether to accept the complaint within 15 working days;
  (c)	Mediation between employers and employees: Once the discriminatory complaint is accepted, either HRC or ENZ will provide free mediation service between employers and employees for earliest resolution. For candid discussion between two parties, information collected from mediation will remain confidential and cannot be used as evidence in later proceedings. If both parties reach a certified agreement, the settlement is enforceable in court;
  (d)	Follow-up legal action in case of continued disagreement: In case the complaints remain unresolved after mediation, mature workers could take their complaints to two legal bodies (i.e. Human Rights Review Tribunal and Employment Relations Authority) for settlement. Free legal representation can be provided upon application;
  (e)	Compensatory remedies in legal settlement: These two legal bodies have the power to order remedies to rectify discriminatory practices (e.g. restraining order, monetary compensation or job reinstatement). It is noteworthy that these remedies are compensatory and corrective in nature, not punitive and without criminal sanction; and
  (f)	Exceptions in ADL to factor in productivity factor: It is clearly stated in the law that ADL is not applicable if and when age is a "genuine occupational qualification" for safety and other legitimate reasons. For instance, ADL allows lower salary payment paid to employees aged below 20.

• Policy effectiveness: During 2014-2019, the mediation-driven approach in New Zealand helped settle 77% of 6 400 discrimination enquiries and complaints (i.e. including other kinds of discrimination) lodged to HRC. Only 9% of the caseload was resolved at tribunal for legal settlement, reducing the burden of the judiciary.^{29Legend symbol denoting New Zealand Human Rights Commission (2019).} Moreover, enactment of HRA paved the way for the abolition of mandatory retirement age at 65 in 1999, which was arguably a discriminatory practice. As a result, LFPR of mature persons leaped by one-third in two decades from 42.2% to 56.1% during 1999-2019. Additional compliance costs to the economy also appear to be limited, based on limited information available.^{30Legend symbol denoting Harcourt, M. et al. (2010).} Some academics also acclaimed that ADL sent a "strong signal against age discrimination" in New Zealand.^{31Legend symbol denoting Davey, J. (2015).}
• Scope for improvement: However, the light-touch nature of ADL also constrains its effectiveness. According to a survey of the Statistics New Zealand in 2019, 11.1% of workers aged 55-64 still experienced discrimination at work over the past 12 months.^{32Legend symbol denoting Stats NZ (2019).} Some observers noted that subtle age discrimination remains as a "serious challenge" in New Zealand.^{33Legend symbol denoting Backham, A. (2018), Davey (2014) and McGregor, J. et al. (2002).} ILO felt that older workers in New Zealand might be reluctant to file a complaint against employers due to "significant financial and emotional burden".^{34Legend symbol denoting International Labour Organization (2006).}

Concluding remarks

• In spite of a rise in LFPR from 32.5% to 43.1% for mature persons in Hong Kong, there are suggestions to enact ADL to offer legal protection to them. In New Zealand, ADL is mediation-driven and negotiation-based, resolving 77% of discrimination-related disputes. While ADL may send a strong signal against age discrimination, subtle age discrimination remains a serious challenge facing older workers in New Zealand.

Prepared by Sunny LAM
Research Office
Information Services Division
Legislative Council Secretariat
5 January 2021