Panel on Manpower (Minutes) 30 Sept 97

Provisional Legislative Council

PLC Paper No. CB(1)343
(These minutes have been
seen by the Administration)

Ref : CB1/PL/MP

Panel on Manpower

Minutes of meeting held on Tuesday, 30 September 1997, at 2:30 p.m. in the Chamber of the Legislative Council Building

Members present :

Hon CHAN Kam-lam (Chairman)
Hon James TIEN Pei-chun, JP
Hon HO Sai-chu, JP
Hon LEE Kai-ming
Hon Mrs Peggy LAM, JP
Dr Hon Mrs TSO WONG Man-yin
Hon MOK Ying-fan
Hon CHAN Yuen-han
Hon CHAN Wing-chan
Hon Bruce LIU Sing-lee
Hon Ambrose LAU Hon-chuen, JP
Dr Hon LAW Cheung-kwok

Members absent :

Hon Mrs Sophie LEUNG LAU Yau-fun, JP (Deputy Chairman)
Hon WONG Siu-yee
Hon Henry TANG Ying-yen, JP
Hon Ronald ARCULLI, JP
Hon Frederick FUNG Kin-kee
Dr Hon Philip WONG Yu-hong
Hon CHENG Yiu-tong
Hon TAM Yiu-chung, JP

Public officers attending :

For Items IV and V

Mr Matthew CHEUNG: Secretary for Education and Manpower (Atg)
Ms Esther LEUNG: Principal Assistant Secretary; for Education and Manpower(4)

For Item IV

Miss J A Willis: Commissioner for Labour
Mr TSANG Kin-woo: Assistant Commissioner for Labour (Labour Relations)
Mrs Jenny CHAN: Assistant Commissioner for Labour (Employee Rights and Benefits)
Mr Alan WONG: Chief Labour Officer (Atg)

For Item V

Mr Herman CHO: Principal Assistant Secretary; for Education and Manpower (7)

Clerk in attendance :

Miss Polly YEUNG: Chief Assistant Secretary (1)3

Staff in attendance :

Mr Arthur CHEUNG: Assistant Legal Advisor 5
Ms Sarah YUEN: Senior Assistant Secretary (1)4

I.Confirmation of minutes of meetings and matters arising
(PLC Paper Nos. CB(1)97 and 219)

The minutes of the meetings held on 22 July and 19 August 1997 were confirmed.

II.Date and items for discussion for next meeting

2. Members agreed that they would notify the Chairman or the Clerk after the meeting of any proposed discussion items. The Chairman also informed members that the regular meetings of the Panel for the period January to March 1998 would be held on the fourth Monday of each month at 2:30 pm as per existing arrangement.

III .Information papers issued since the last meeting

3.Members noted that three information papers had been issued for members' general information since the last meeting.

IV. The Administration's proposed way forward for the five labour-related ordinances

(Paper tabled at the meeting and circulated to members vide PLC Paper No. CB(1)293)

4.The Secretary for Education and Manpower (Atg) (SEM) highlighted the Administration's legislative proposals arising from the review of the five labour-related ordinances passed by the former Legislative Council on 26 June 1997 as follows -

the Employment and Labour Relations (Miscellaneous Amendments) Bill 1997 would be introduced to deal with the three ordinances suspended under the Legislative Provisions (Suspension of Operation) Ordinance. It sought to amend the Trade Unions (Amendment) (No.2) Ordinance 1997 and to repeal the Employment (Amendment) (No. 4) Ordinance 1997 and the Employee's Rights to Representation, Consultation and Collective Bargaining Ordinance;
the Employment (Amendment) (No.6) Bill 1997 would seek to amend the Employment (Amendment) (No.5) Ordinance 1997 and other provisions on statutory holidays under the Employment Ordinance; and
the Occupational Deafness (Compensation) (Amendment) (No.2) Bill 1997 would seek to amend the Occupational Deafness (Compensation) (Amendment) Ordinance 1997.

He added that the Employment and Labour Relations (Miscellaneous Amendments) Bill 1997 (referred to as Annex A of the paper) would be issued to members in the following week.	EMB

(Post-meeting note: The Bill was subsequently circulated to members vide PLC Paper No. CB(1)304. When gazetted, the Employment (Amendment) (No.6) Bill 1997 has been renamed "Employment (Amendment) (No.5) Bill 1997.")

5.Mr MOK Ying-fan stated the Hong Kong Association for Democracy and People's Livelihood's strong opposition to any attempt to repeal and amend ordinances passed by the former Legislative Council. In the ensuing discussion, the Panel deliberated on the Administration's proposed courses of action in respect of each of the five ordinances.

Employment (Amendment) (No. 4) Ordinance 1997

6.Some members disagreed with the Administration's proposal to repeal the legislative changes brought about by this Amendment Ordinance. They felt that the provisions empowering the court to issue a re-instatement order in deserving cases were reasonable and that the requirement for mutual consent for such an order was not practicable.

7.In response, SEM emphasised that the present proposal had been unanimously agreed by all the employer and employee members of the Labour Advisory Board (LAB). Moreover, on the advice of the LAB, the LAB Committee on Labour Relations would review the provisions on re-instatement under the Employment (Amendment) (No.3) Ordinance 1997, after it had come into effect for one year.

Employee's Rights to Representation, Consultation and Collective Bargaining Ordinance (the Ordinance)

8.Several members expressed strong dissatisfaction with the Administration's proposal to repeal the Ordinance. Miss CHAN Yuen-han in particular, considered the proposal negative and untimely having regard to the fact that there was greater awareness and discussions in the community at large on collective bargaining as a way to improve labour relations. Notwithstanding her reservation on certain provisions of the Ordinance, she emphasised that collective bargaining was in fact conducive to harmonious labour relations because it provided a positive and formal mechanism for employers and employees to exchange views and negotiate on matters of mutual concern. She held the view that the Administration should draw up revised legislative proposals on collective bargaining instead of repealing the entire Ordinance.

9.In response to Miss CHAN's enquiry about the formation of a Bills Committee to study the proposed repeal of the Ordinance, Assistant Legal Advisor 5 (ALA5) advised that in accordance with existing procedures, the House Committee could set up a Bills Committee to study the Employment and Labour Relations (Miscellaneous Amendments) Bill 1997 which sought, among other things, to repeal the Ordinance. He nevertheless cautioned that if any amendments were to be proposed, they had to be within the scope and objective of the Bill, which might be quite restrictive in so far that it sought to repeal the Ordinance.

10.Mr LEE Kai-ming expressed doubt on the effectiveness of setting up a special unit under the Labour Department (LD) to promote direct and voluntary negotiation in lieu of mandatory collective bargaining. His view was shared by Mr CHAN Wing-chan who also refuted claims by the Administration that the existing practice of voluntary and direct negotiation between employers and employees at the enterprise level was working well. In their view, if employees did not have statutory bargaining rights on labour matters, Hong Kong could not claim to enjoy harmonious labour relations despite the low number of working days lost through labour disputes.

11.In response, SEM reiterated the Administration's policy stance against legislation on collective bargaining at the present stage and emphasised the Administration's commitment to promoting voluntary negotiation and direct communication between employers and employees at the enterprise level. In this regard, the Commissioner for Labour supplemented that promotion efforts by the LD had produced fruitful results and cited the case of the relocation of Kai Tak Airport to the new airport in Chek Lap Kok where the airlines and companies affected had entered into voluntary negotiation with their employees on relocation arrangements well in advance.

12.At some members' request, SEM agreed to provide specific information to substantiate the Administration's point that it was the trend in many other economies in the world to go for greater flexibility and reduction in impediments in the labour market.	EMB/LD

Trade Unions (Amendment) (No.2) Ordinance 1997

13.In reply to Mr LEE Kai-ming's question on the proposed right of appeal, SEM confirmed that any appeal against refusal by the Registrar of Trade Unions to register amended, altered or new rules should be lodged with the Court of First Instance. On overseas affiliation, he clarified that the requirement to notify the Registrar within one month after becoming a member of an organisation in a foreign country was for record purposes only. However, he emphasised that the proposed relaxation would only apply to affiliation of local trade unions with related organisations (i.e. organisations of workers, employers and relevant professional bodies) in foreign countries and that these organisations must be non-political.

Employment (Amendment) (No. 5) Ordinance 1997

14.A few members were against the Administration's proposal to make 1 May an additional statutory holiday with effect from 1999 instead of from 1998 as provided under the Employment (Amendment) (No. 5) Ordinance 1997. They were not convinced of the reasons put forward in the Administration's paper in support of this proposal and Mr CHAN Wing-chan further doubted if the Administration was under pressure from employers to defer designating 1 May as a statutory holiday.

15.In response, SEM reiterated that the present proposal had been endorsed by the majority of members of the LAB and that the Administration had not been under pressure from employers. He emphasised that deferring the designation of the statutory holiday to 1999 was necessary as the list of general holidays for 1998, which had been decided and announced, did not include 1 May. Considerable confusion might result if 1 May was now promulgated a statutory holiday in 1998. He added that the present proposal would also afford the Administration time to consider, and to consult widely, whether to cap the number of general holidays to the existing level of 17 days from 1999 onwards, whether to simply add one more day to the list of general holidays and whether the Administration should entertain the request of designating the Buddha's birthday a general holiday.

Occupational Deafness (Compensation) (Amendment) Ordinance 1997

16.Miss CHAN Yuen-han urged the Administration to incorporate the series of improvement measures arising from the comprehensive review of the Occupational Deafness Compensation Scheme (the Scheme) into the Occupational Deafness (Compensation) (Amendment) Ordinance 1997 passed by the former LegCo. Moreover, she maintained that as members also supported the increase in the level of compensation, the Administration should not adjust downwards the scale of permanent incapacity with reference to different levels of hearing loss for the purpose of compensation. Mr James TIEN opined that to ensure the most effective use of employers' contributions from levies on the employees compensation insurance premium, it might be useful to consult the affected workers to find out whether they would prefer a more comprehensive package of improvement measures as proposed by the Administration or merely a higher level of monetary compensation.

17.In response, SEM and the Assistant Commissioner for Labour (Employee Rights and Benefits) (AC for L(ER&B) advised that the Administration's proposals had been carefully worked out and endorsed fully by both the Occupational Deafness Compensation Board (the Board) and the LAB. They emphasised that although the Bill only retained part of the provisions of the Ordinance and sought to replace its Schedule 4, it had not deviated from the spirit of the Ordinance to provide greater protection to injured workers. They informed members that the Bill in fact proposed to incorporate all the 13 improvement measures arising from the Government's review. For example, eight noisy occupations would be added to the existing list of specified noisy occupations for which compensation was payable, and the requirement for claimants to pay for the costs of hearing test and medical examination would also be waived. Moreover, they also highlighted the importance of the proposed transitional arrangement to allow those persons who had at any time been employed under a continuous contract of employment in noisy occupations on or after 1 July 1989, but who would not be qualified for compensation because they had left employment for more than 12 months, to apply for compensation within a certain period. SEM reckoned that due to resources considerations, it was necessary to strike a balance between extending the coverage of the Ordinance and hence benefiting more affected workers; and increasing the amount of compensation on a progressive basis.

18.Some members opined that the Government should contribute the necessary amount on top of the increase of 0.8% to the rate of levy payable by employers so as to implement the series of improvement measures and to increase the level of compensation. In response, SEM pointed out that as a major employer, the Government would already have to contribute more to the Scheme as a result of the 0.8% increase. He further confirmed that as compensation payable under the Scheme was a collective responsibility of employers, it would be inappropriate for the Government to inject funds into the Scheme. The LAB also did not recommend further increase to the levy because the rate of levy for the Occupational Safety and Health Council would also be increased by 1%. His remarks were echoed by Mr HO Sai-chu who pointed out that employers' financial burden was already heavy.

19.In reply to members' questions on the operation of the Ordinance since its implementation on 30 June 1997, AC for L(ER&B) reported that as at 25 September 1997, the Board received 107 applications and approved 72 applications in accordance with the Ordinance.

The way forward

20.In response to the Chairman, SEM confirmed that the three Bills would be gazetted on 9 October 1997 and introduced into the PLC on 15 October 1997. He urged members to expedite scrutiny of the Bills, in particular the Employment and Labour Relations (Miscellaneous Amendments) Bill 1997 which dealt with the three Ordinances currently suspended until 31 October 1997.

21.In this connection, members noted that one possible option would be to set up a subcommittee under the House Committee to commence scrutiny of the Bills before their formal introduction in mid-October. Having considered the urgency or otherwise of the Bills and the fact that the suspension period of the three Ordinances could be extended by resolution of the PLC, Miss CHAN Yuen-han suggested that the Bills should be dealt with in accordance with the normal procedures instead of following the "fast-track" approach. Members agreed. In view of the tight legislative schedule, the Chairman advised that the Administration should seriously consider moving a resolution under the Legislative Provisions (Suspension of Operation) Ordinance 1997 to suitably extend the suspension period of the three Ordinances.

(Post-meeting note : At the request of the Administration, the House Committee agreed on 3 October 1997 to set up a subcommittee to study the Employment and Labour Relations (Miscellaneous Amendments) Bill 1997. Members also decided to request the Administration to move a resolution to extend the suspension period. The other two Bills would be dealt with in accordance with the usual procedures.)

V.Manpower needs for the construction industry

(PLC Paper No. CB(1)257(01))

22.SEM briefed members on the salient points of the Administration's paper, which detailed measures being taken by the Administration to help meet the manpower needs of the construction industry.

23.Members in general welcomed the measures, in particular the establishment of the Working Group on Training and Retraining for the Construction Industry (the Working Group) and the proposed one-stop Employment, Training, Retraining and Placement centre to meet the manpower needs of the industry. They, however, raised the following concerns -

The figures in para 3 of the paper could not realistically reflect the wages received by construction workers. As a result of the contractor system of the industry, only part of the wages paid by the developer would go to the workers.
Labour importation should not be resorted to too lightly as this would be to the detriment of the wages and employment opportunities of local workers. It should always remain the very last resort when every effort to meet proven demands failed. At present, housing projects were mainly at the site formation stage which did not require many skilled workers. Future demands for skilled labour could be met locally through well-planned training/retraining.
The 30% - 40% wastage rate of trainees in the industry was too high. Apart from improving the working conditions and promotion prospects to retain trained construction workers, the employment of workers on contract terms might be a possible solution. To ensure the cost-effectiveness of relevant training, the Administration should safeguard against abuse of the training courses and subsidies.
The Administration should address the question of manpower demand from a macro and long-term point of view. Consideration should be given to possible labour supply from new arrivals from the Mainland and technical developments in construction, such as the use of pre-fabricated parts in building houses.

24.In response, SEM assured members that pending completion of the review and formulation of firm recommendations by the Working Group comprising representatives from the Administration, training bodies, contractors and trade unions, as well as the interdepartmental working group set up earlier on, the Administration would not proceed with any plans to import labour. He added that in the wake of the first two meetings of the Working Group, good progress was being made by the major training bodies in expanding their current training and retraining programmes with immediate effect.

25.On the high wastage rate, SEM said that this might be partly attributed to the unattractive nature of the job, which essentially involved outdoor manual labour with certain risks. While noting members' concerns, he nevertheless cautioned that there was a need to strike a balance between respecting individuals' freedom of choice in employment and ensuring that training/retraining resources were effectively utilised. The Working Group would discuss this subject at its next meeting.

26.SEM further clarified that the wages of construction workers as reported in paragraph 3 of the paper were provided by the Census and Statistics Department. At members' request, he undertook to provide more detailed information on construction workers' wages after the meeting.	Admin.

27.Addressing members' concern about the availability of resources to cope with the expansion of the current training capacity without compromising training quality, SEM assured members that the major training bodies had the necessary financial and staffing resources to run more training courses. One possible way to guarantee training quality was to require trainees to undergo a test on completion of the training course. He believed that with a monthly training allowance of $4,000 for every trainee and job placements supported by employer and contractor associations, the construction industry would be able to attract more new blood.

28.The meeting ended at 4:45 pm.

Provisional Legislative Council Secretariat
15 October 1997