PLC Bills Committee on Provident Fund Schemes Legislation (Amendment) Bill 1997

Information Note

Report on Issues of Concern Raised at the Bills Committee Meetings

Purpose

This paper presents the issues of concern raised at the Bills Committee meetings from 8 December 1997 to 15 December 1997, together with the Administration's response and follow-up action to be taken.

Specific Issues Raised
Proposed Section 2 - Definition of 'spouse " (8.12.97)*
Bills Committee's Comments

2.Members noted that as drafted the definition of "spouse " included a de-facto relationship of man and wife. At the Chairman's request, the Administration undertook to check whether similar definition exist in other pieces of legislation.

Administration's Response and Action

3.A similar definition is found in the Australian legislation which defines spouse as " in relation to a person, include another person who, although not legally married to the person, lives with the person on a genuine domestic basis as the husband or wife of the person " .

Subsidiary Legislation - Proposed Section 37(11.12.97)*

Bills Committee's Comments

4.Members noted that in the management of scheme funds, investment managers of MPF Schemes could only delegate the investment management function to its associates meeting the MPF requirements. Members were concerned that such a requirement might disadvantage local investment management companies which did not have any overseas network.

Administration's Response and Action

5.To address Members' concern, the Administration will modify the requirement on the delegation of investment management function by investment managers. An investment manager may delegate the investment management of scheme funds to another investment management company properly registered with an overseas authority. The delegate may either be an associate of the investment manager or have Hong Kong presence either by maintaining a branch office registered with the SFC or having an associated investment management company in Hong Kong that is registered with the SFC.

Proposed Section 45G - Priority of debts(15.12.97)*

Bills Committee's Comments

6.The Bills Committee was concerned about the priority of payment of debts upon the bankruptcy or winding up of an employer. The Committee was particularly concerned about the order of priority of " MPF contributions in arrears' vis a vis taxes due to the Government, employees' wages in arrears, wages in lieu of notice and severance payment.

Administration's Response and Action

7.The Bankruptcy Ordinance (Cap. 6) and the Companies Ordinance (Cap. 32) provide for the order of priority to settle costs and debts. Insofar as the items that the Committee is concerned, the costs payable for the purposes of receivership or winding up will be accorded top priority. Employees' wages in arrears, wages in lieu of notice, severance payment or long service payment, unpaid ORSO contributions and unpaid MPF contributions will be settled next. These items rank equally among themselves. In case the property of the bankrupt or the wound up company is insufficient to payoff these debts, the amount of the property realised will be apportioned equally among these debts. All statutory debts due to the Government, including tax due and payable, rank the last.

Proposed Schedule 1 - Definition of Hawker(15.12.97)*

Bills Committee's Comments

8.Members asked about the definition of hawker which appeared in the Mandatory Provident Fund Schemes (MPFS) Ordinance.

Administration's Response and Action

9.Under the MPFS Ordinance, " Hawker " has the same meaning as in the Public Health and Municipal Services Ordinance (Cap. 132) which is defined as :

  1. any person who trades in any public place -

    1. by selling or exposing for sale any goods, wares or merchandise; or

    2. by exposing samples of patterns of goods, wares or merchandise to be afterwards delivered; or

    3. by hiring or offering for hire his skill in handicraft or his personal services; and

  2. any person who itinerates for the purpose -

    1. of selling or exposing for sale any goods, wares or merchandise; or

    2. of hiring or offering for hire his skill in handicraft or his personal services.

  3. provided that nothing in this definition shall be taken to include -

    1. any person who sells to or seeks orders from any person who is a dealer in any such goods, wares or merchandise and who buys to sell again; or

    2. any person who on request visits in any place the person making such request for the purpose of selling or offering for sale or delivering to him or taking from him orders for any goods, wares or merchandise or of hiring to the person making such request his skill in handicraft or his personal services; or

    3. any representative of the press or any photographer.

Proposed Schedule 8, sections 14,15, 16 and 17 - Associates(15.12.97)*

Bills Committee's Comments

10.Members noted that the Administration would find out the basis/reasons for the four categories of exclusions under the proposed sections 14, 15, 16 and 17 of Schedule 8.

Administration's Response and Action

11.The Administration is considering whether to retain these paragraphs and will revert to the Bills Committee in due course.


Mandatory Provident Fund Office
Financial Services Bureau
29 December 1997


* All dates in bracket are dates of the Bills Committee meetings.