(LegCo Paper No. CB(3)763/95-96, LegCo Paper No. LS153/95-96, LegCo Brief Ref.: EMBCR 2/2961/95II, LegCo Paper No. CB(1)1621/95-96 and CB(1)1672/95-96. A position paper by the Construction Industry Safety-Management Association tabled at the meeting and attached at annex.)

2. Upon the Chairmans invitation, the deputations made their representations on the Factories and Industrial Undertakings (Amendment) Bill 1996 (FIU(A) Bill). In general, all deputations were in support of the spirit of the Bill which sought to improve industrial safety at the workplace. While the Hong Kong Construction Industry Employees General Union expressed full support for the early passage of the Bill to empower the Commissioner for Labour (C for L) to issue improvement notices (IN) and suspension notices (SN) to proprietors to order the improvement or immediate suspension of any dangerous operation, other representatives and some members raised concerns and queries on a number of issues. The deliberations of the meeting were summarised in the following paragraphs.

Merits or otherwise of introducing new provisions in the Bill to empower the C for L to issue SN

3. While supporting the proposal to empower the C for L to issue IN, some members and representatives of the Hong Kong Construction Association Ltd (HKCA), the Real Estate Developers Association of Hong Kong (REDA) and some of the professional bodies expressed reservation on the proposal to repeal section 11 of the Factories and Industrial Undertakings Ordinance (FIUO) and hence, transferring the power to order suspension of dangerous operations from the court to the C for L. They cautioned that professional judgement was often required in determining whether certain work activity was hazardous and doubted whether officers of the Factory Inspectorate would be competent enough to make such judgement. Moreover, since the suspension of work had serious consequences, the merits of transferring such an important power from the court to an enforcement department was questionable. They also opined that the proposed penalty for non-compliance with SN was too high.

4. In response, Mr S Y MAK and Mr Herman CHO advised as follows:

The existing section 11 of the FIUO had been invoked once in the 1980s but experience had shown that it took almost two weeks to obtain a court order which was time-consuming and onerous. Serious accidents could have occurred in the interim.
In proposing the amendments, the Administration had made reference to overseas experience and found that similar powers available in the UK, Australia, Singapore and Japan had been effective in reducing industrial accidents and enhancing safety awareness.
There existed internationally established safety standards for various work operations and no serious difficulty was anticipated for Factory Inspectors (FIs) who were trained in safety matters. Under the proposed system, the visiting FIs recommendation to issue a SN would be routed through the Divisional Factory Inspector (DFI) to the Deputy Chief Factory Inspector (DCFI), an officer at senior professional level, for final approval. If necessary, the DCFI would seek advice from professional and engineering staff in the Labour Department (LD) and/or assistance from other departments.
The proposed maximum penalty for non-compliance with a SN would be a fine of $500,000 and imprisonment for 12 months with an additional maximum daily fine of $50,000 if the contravention continued. The penalty was deliberately set high in order to deter offences. Otherwise, a contractor might be tempted to ignore the SN and pay the penalty out of the substantial bonus he received for the early completion of the construction project.
Under normal circumstances, if an IN had been complied with, the Administration would not take out prosecution for the breaches stated therein. In serious cases involving SN, however, prosecution might be contemplated for breaches of the relevant safety provisions.

5. Some members concurred that the Bill would enable the C for L to order the cessation of dangerous activities expeditiously without having to go through court formalities and hence, enhance protection for workers. In this connection, Hon CHAN Yuen-han suggested and the Administration agreed to provide information on industrial accidents in recent years which might shed light on the safety situation in construction sites and the need for tougher legislation.

6. Responding to the HKCAs suggestion to introduce a two-tier approach under which the proprietor would first be served with an IN requiring him to rectify a dangerous situation within a specified period, failing which, he would be served with a SN ordering the immediate suspension of work, Mr MAK explained that the proposal was not advisable as a SN was intended to deal with a situation where workers were exposed to an imminent risk of serious bodily injury and it would defeat the purpose of averting serious accidents if the issue of SN had to be preceded by IN.

Possible duplication of criminal sanction between the Building (Amendment) (No.3) Bill and the FIU(A) Bill

7. Some members and representatives of the construction industry and professional bodies opined that the Building (Amendment) (No.3) Bill (B(A) (No.3) Bill) and the FIU(A) Bill were two different bills dealing with the same subject of enhancing safety in construction sites. They pointed out that the responsibility of contractors under the two bills were unclear and that there would be grey areas and duplication in enforcement by the LD and the Buildings Department (BD). They were particularly concerned that being served with a SN might be construed as some form of professional negligence on the part of the building professionals which was prosecutable under the B(A) (No.3) Bill.

8. Responding to members concerns, Mr MAK and Mr H W CHEUNG clarified as follows:

The two bills served different purposes. The B(A) (No.3) Bill was mainly concerned with improving the overall safety of construction sites and imposing criminal sanction on professionals for failure to provide supervision on building works. The FIU(A) Bill aimed at protecting workers against hazards at construction sites and other industrial undertakings and imposing a criminal liability on the contractors/proprietors for non-compliance of safety requirements.
A SN issued under the FIU(A) Bill would usually apply to one or more work activities, the particular part(s) of a machinery or part(s) of the workplace where the hazard prevailed. A cease order issued under the B(A) (No.3) Bill, on the other hand, would normally cover the entire construction site.
There was clear delineation in the enforcement of safety laws by the LD, BD and other relevant departments which worked closely to ensure that grey areas and duplication of work would not arise.

Procedures for issuing and enforcing SN and IN under the FIU(A) Bill

(Copies of the draft guidelines prepared by the LD tabled at the meeting and attached at annex)

9. Some members and representatives observed that the procedures for the issue and enforcement of SN and IN had not been prescribed in the Bill and were concerned that the relevant powers were subject to arbitrary use, thus causing unfairness to contractors and proprietors. The representatives of the Construction Industry Safety-Management Association (CISMA) remarked that the circumstances warranting the issue of SN and IN, as well as the procedures for discharging the notices should be clearly specified in law.

10. Addressing the concerns of members and representatives, Mr MAK explained that the LD had prepared clear internal guidelines on the issue and enforcement of SN and IN to ensure that consistent standards were applied by authorised public officers. The guidelines would be promulgated before the commencement of the Amendment Ordinance. Besides prescribing the three-tier administrative control system for the issue of SN involving the FI, DFI and DCFI and the two-tier system for the issue of IN involving the FI and DFI, the guidelines also listed the circumstances leading to the issue of SN and IN. It was also stipulated that a SN should be served as soon as practicable and in no case later than two working days after discovery of the hazard. Pursuant to the guidelines, rescission of the SN should also be effected as promptly as possible upon satisfactory rectification or removal of the dangerous situations.

Proposed review and appeal mechanism against the issue of SN

11. Some members and representatives shared the view that it was too long to allow the C for L 14 days to decide on an application for review. Some of them questioned the appropriateness for the C for L to consult the Committee on Industrial Safety and Health (CISH) of the Labour Advisory Board (LAB), which was a non-statutory body, in making the decision. Hon LEE Cheuk-yan recalled that at the Manpower Panel meeting on 27 May 1996, some members had also queried that there might be a role conflict for the C for L to issue the SN and to review her own decision when it was challenged. He suggested that it would be more appropriate for the aggrieved party to appeal to the Administrative Appeals Board (AAB) direct.

12. In response, Mr MAK and Mr CHO advised as follows:

The proposed mechanism of review by the C for L on the advice of the CISH was suggested by some employer representatives in the CISH. This option was preferred to direct adjudication by the AAB as the former would be more expeditious and would facilitate the early resumption of work if the notice was cancelled on review.
The 14-day period was set to allow sufficient time for the C for L to seek the advice of the CISH. It represented the maximum time-frame within which the review must be completed and the LD would endeavour to determine the application as early as possible.

Other concerns

13. Representatives of the CISMA and the HKCA were of the view that workers also played an important role in enhancing industrial safety and that it was unreasonable for the Bill to place the responsibility for ensuring safety on contractors and proprietors only.

14. In response, Mr MAK confirmed that the Administration was fully aware of employees duty and co-operation in enhancing safety at work and reported that the number of workers being prosecuted for non-compliance of safety regulations had increased from one in 1991 to 20 in 1995.

Next meeting

15. The next meeting of the Bills Committee would be held on 27 June 1996 at 8:30 a.m. and the various deputations were welcomed to attend.

16. The meeting ended at 4:30 p.m.

LegCo Secretariat
4 October 1996

Last Updated on 11 December 1998

Bills Committee on Factories and Industrial Undertakings (Amendment) Bill 1996

Minutes of Meeting held on Tuesday, 25 June 1996 at 2:30 p.m. in Conference Room A of the Legislative Council Building

I. Confirmation of minutes of previous meeting and matters arising

II. Meeting with deputations and the Administration