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Following is an oral reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, to a question by the Hon Lee Cheuk-yan on measures to deal with layoffs and unemployment in the Legislative Council today (December 3):
Question:
The financial tsunami has struck the catering, retail, financial, real estate and commercial service sectors, resulting in waves of business closures and layoffs in these sectors occurring one after the other. In this connection, will the Government inform this Council:
(a) whether it will make reference to the provisions of the Termination of Employment Convention 1982 (i.e. International Labour Convention No. 158) and introduce legislation to require enterprises to consult relevant trade unions or staff representatives before laying off staff; and
(b) what specific measures are in place to create job opportunities in order to address the employment problems of the unemployed workers in the above sectors?
Reply :
President,
(a) The Termination of Employment Convention, 1982 (Convention No. 158) is an international labour Convention on termination of employment, massive dismissal and termination of employees for reasons of an economic, technological, structural or similar nature. Disregarding a member State that denounced the Convention in 1996, out of the 182 member States of the International Labour Organisation, only 34 have ratified this Convention. Major economies such as China, the United States and the United Kingdom, as well as our neighbouring countries including Japan, Korea and Singapore have not ratified this Convention. This Convention is also not applicable to the Hong Kong Special Administrative Region.
The Administration considers that it is not appropriate to introduce legislation obliging establishments in Hong Kong to consult trade unions or employee representatives before laying off employees because of the following main reasons –
(i) Being an externally-oriented economy in an economically globalised environment, Hong Kong enterprises are constantly facing competitions from countries all over the world. In order to preserve Hong Kong's competitive advantages and capacity to create jobs, we have to strike a reasonable balance between protecting employees' rights and benefits on the one hand and maintaining the flexibility and competitiveness of enterprises on the other. In particular, many enterprises are caught in an austere operating environment brought about by the global economic downturn. It is most important for employers and employees to jointly face the challenge. Regulating retrenchment activities through legislation may affect investor confidence, erode Hong Kong's competitiveness and reduce employment opportunities; and
(ii) We note that many employers, mindful of the effect that retrenchment may have on staff morale and labour relations, have been very cautious in conducting retrenchment exercises and would often do their best to minimise the impact. In fact, introducing legislation obliging establishments to consult trade unions or employee representatives before deciding to lay off employees may not be able to avert the said decision or reduce the scale of retrenchment. We believe that consultation through voluntary participation is more conducive to resolving the problems in a rational, candid and mutually understanding manner.
(b) The Government has been closely monitoring the impact of the financial tsunami on various fronts of the local economy with a view to formulating specific alleviating measures. Job creation is the Government's top priority at present. Our strategy is to create jobs and minimise job losses on the one hand, and to upgrade the skills of unemployed people and assist them in job search on the other.
In the area of creating jobs, the Government will keep abreast with the needs of the market and strive to provide a stable, transparent and conducive business environment in order to help the establishments explore business opportunities. In particular, we will continue to promote tourism development which would drive economic sectors such as retail, catering and hotels, thereby providing more job opportunities. We will further open up new sources of markets, including other regions of the Mainland outside Guangdong Province and overseas emerging markets such as India, the Middle East and Russia. We will also develop more new tourism products such as green tourism, MICE (Meetings, Incentives, Conventions and Exhibitions) tourism and cruise tourism, etc. so as to cater for the needs of travellers.
The Government will endeavour to commission all types of construction projects, including both large-scale infrastructure projects and minor works projects. In the 2008-09 legislative year, provided that the Legislative Council (LegCo) and the community support the Central-Wan Chai Bypass and Wan Chai Development Phase II to proceed, the total project sum to be approved by LegCo would exceed $100 billion, which is an encouraging figure. It is expected that over 40,000 jobs will thereby be created. The Government received just this morning the endorsement of the Public Works Subcommittee to further raise the 2009-10 funding for minor works to $7.6 billion, which will help create some 12,000 jobs in the construction industry.
In the area of minimising job losses, the Government will provide support to establishments of different trades through a series of measures. Early last month, the Government launched the enhanced Export Marketing Fund and Loan Guarantee Scheme for Small and Medium Enterprises (SMEs). This month, we expect to launch the Special Loan Guarantee Scheme for SMEs which could encourage the commercial lending markets to provide $10 billion in liquidity to SMEs. The maximum amount of loan that each SME may obtain will be $1 million.
The Export Credit Insurance Corporation has also launched new enhanced measures, including the flexibility to provide higher cover for exports, as well expedition and facilitation of small credit limit applications. The Government has also appealed to the banks to play their role as lenders to the private sector and to be flexible and accommodating in lending to SMEs within the bounds of prudent risk management.
In the area of enhancing the skills of the unemployed, the Employees Retraining Board plans to provide some 120,000 training places in 2008-09, covering a range of industries and job types, such as tourism, hotel, retail, logistics and catering, etc., to meet the training needs of its service targets as well as the job market. Such training can also assist trainees in acquiring the necessary vocational skills and recognised qualifications under the Qualifications Framework so that their employability and competitiveness could be enhanced.
In the area of assisting the unemployed to seek jobs, the Labour Department (LD) adopts a variety of proactive measures to promote labour market efficiency and disseminate vacancy information with a view to facilitating job seekers to enter or re-enter the labour market. For employees made redundant in closure/retrenchment exercises, LD renders them with priority referral and job matching services.
In providing support to job seekers of different background who encounter difficulties in their job search, LD has put in place various employment programmes to enhance their employability and help them find suitable jobs.
The Government will continue to closely monitor the situations in job creation and employment and will proactively adopt a multi-pronged approach comprising measures on all fronts to promote economic activities in order to enable the creation of job opportunities.
Ends/Wednesday, December 3, 2008
Issued at HKT 15:51
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