CB(1)178/96-97(02)
(Translation)

Employment (Amendment)(No. 4) Bill 1996

Employment (Amendment)(No. 4) Bill 1996 is a member’s bill sponsored by Hon LEUNG Yiu-chung. The Bill has been gazetted on 11 October 1996, and Hon LEUNG Yiu-chung will move the First and Second Readings of the Bill at the Legislative Council Sitting on 23 October 1996.

The purpose of the Bill is to revise the definition of lay-off in the Employment Ordinance, with a view to addressing the problem of under-provision of work. Under existing legislation, where wages payable to an employee depends on the amount of work provided by the employer, the employee will be taken to have been "laid off" under the following conditions:

1. the number of days on each of which work is not provided for him by the employer exceeds a total of half of the total number of normal working days in any period of four consecutive weeks and the employee is not paid a sum equivalent to the wages which he would have earned otherwise; or

2. the number of days on each of which work is not provided for him by the employer exceeds a total of one-third of the total number of normal working days in any period of 26 consecutive weeks and the employee is not paid a sum equivalent to the wages which he would have earned otherwise.

Thus, he will be entitled to a "severance payment".

The purpose of the above legislation is to ensure that "piece-rated workers" and "daily rated employees" are provided with work on a minimum of half of the total number of working days in a period of four consecutive weeks (approximately one month), or receive a minimum of half of the normal wages. However, there was a serious lack of protection for the working population, especially workers in the manufacturing sector who are affected most, under existing legislation.

First of all, some employees who have long been affected by under-provision of work can receive only half of the normal monthly wages. But the legislation provides that an employer needs only to provide work on half of the normal working days. Even if there is serious under-provision of work, an employee cannot ask the employer to terminate his employment. During an extensive period of time (possibly close to six months), an employee can get only half of the normal wages. In particular many skilled workers and operatives in the manufacturing sector only earn a normal monthly wage of about $6000. Half of the normal wage would mean only about $3000. So, how can they manage?

Secondly, some employers subject employees to a prolonged period of under-provision of work so that the employees resign of their own accord. As a result, such employers can avoid the responsibility to offer employees severance payments and long service payments. As for some long-serving employees, they have long been affected by under-provision of work. If they resign, they would lose severance payments and long service payments. Thus, they are caught in a dilemma.

To address the problem, Hon LEUNG Yiu-chung put forward a member’s bill to revise the definition of "lay-off" to the effect that an employee would have the right to ask the employer to terminate his employment under the following conditions:

1. the number of days on each of which work is not provided for him by the employer exceeds a total of one-third of the total number of normal working days in any period of four consecutive weeks and the employee is not paid a sum equivalent to the wages which he would have earned otherwise; or

2. the number of days on each of which work is not provided for him by the employer exceeds a total of one-fourth of the total number of normal working days in any period of 26 consecutive weeks and the employee is not paid a sum equivalent to the wages which he would have earned otherwise.

Under the proposals of Hon LEUNG Yiu-chung, an employee who is forced to suffer from under-provision of work would receive a minimum of two-thirds of the normal monthly wages. Otherwise, he is entitled to a severance payment. This proposed arrangement would better ensure that an employee may maintain a basic standard of living. Otherwise, it would be better suffering a sharp pain than an enduring pain. An employee who is provided with work on less than two-thirds of the total number of normal working days can ask the employer to terminate his employment.

As a matter of fact, subject to mutual consent between an employee and an employer, the employee may choose not to have his employment terminated and to continue to work for the employer even if the number of days on which work is provided for him is less than that prescribed in the legislation. Thus, the member’s bill would just make an option available to employees affected by under-provision of work.

According to the findings of the General Household Survey conducted by the Census and Statistics Department for the first quarter of the year, there were about 10 600 workers (an underemployment rate of 2%) in the manufacturing sector who worked fewer than 35 hours a week. Thus, it is first envisaged that the proposals in the Bill would not affect employers much but could actually help the affected employees.

Office of Hon LEUNG Yiu-chung
15 October 1996

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EMPLOYMENT (AMENDMENT) (NO. 4) BILL 1996
A BILL
To

Amend the Employment Ordinance.

Enacted by the Governor of Hong Kong, with the advice and consent of the Legislative Council thereof.

1. Short title

This Ordinance may be cited as the Employment (Amendment) (No. 4) Ordinance 1996.

2. Suspension from employment in certain cases

Section 11(4) of the Employment Ordinance (Cap. 57) is amended--

(a) in paragraph (a), by repealing "half" and substituting "one- third";

(b) in paragraph (b), by repealing "one-third" and substituting "one- fourth".

3. Lay-off

Section 31E(1) is amended--

(a) in paragraph (a), by repealing "half" and substituting "one- third";

(b) in paragraph (b), by repealing "one-third" and substituting "one- fourth".

Explanatory Memorandum

The purpose of this Bill is to amend the Employment Ordinance (Cap. 57) to revise the provisions relating to employers laying-off an employee by reducing the number of days required on which work is not provided to an employee for him to have the right to receive severance payment.

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