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    Following is a question by the the Hon Fred Li and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen in the Legislative Council today (6 July):

Question

    It has been reported that the contractors of government outsourced services for Pak Tin Estate, Shun On Estate and Lung Hang Estate were alleged to have wrongfully deducted the pay and vacation leave of about 90 workers, and even used forged attendance records to deceive the Housing Department ("HD"). The trade unions concerned reported such cases to HD in January this year, but it was not until May that HD referred the cases which might involve criminal offences to the Police. In this connection, will the Government inform this Council:

(a) of the reasons for HD not referring the cases to the Police in the first instance;

(b) of the number of complaints HD has received from its contractors' workers about their remuneration since January this year, and the outcome of such complaints; and

(c) whether HD will consider conducting undercover operations by deploying staff to take up employment with the contractors under complaint in order to collect evidence of breaches of the terms of outsourced service contracts or labour legislation?


Reply

Madam President,

    Through service outsourcing, the Housing Department aims to enhance cost-effectiveness and provide efficient estate management service to residents. Apart from requiring strict compliance with the Employment Ordinance by contractors, the Housing Department also incorporates as contract terms the committed wages and working hours of cleansing workers in order to plug all loopholes as far as possible. To protect the interests of workers employed by outsourced contractors, a series of measures is also adopted to monitor compliance with contract terms, such as checking the employment contracts and salary statements as well as interviewing workers through random sampling to verify their take-home wages and numbers of working hours. If there is prima facie evidence suggesting possible breach of the Employment Ordinance, the Housing Department will without delay refer the case to the relevant enforcement departments for follow-up action and prosecution. If there is a breach of contract terms, the case will be handled according to the penalty clauses stipulated in the contract, such as deduction of monthly contract payment, and termination of contract together with recovery of the costs incurred.

    My reply to the three-part question is as follows:
(a)  In late January and February this year, the Housing Department received reports from trade unions about suspected wrongful deduction of pay and vacation leave of the cleansing workers in Pak Tin Estate, Shun On Estate and Lung Hang Estate. The Housing Department carried out investigations immediately, including interviewing the workers and checking the records of attendance, wages and vacation leave in order to ascertain the grounds of complaint.

    After interviewing the workers and understanding the details of the incidents, the Housing Department considered that there might be breaches of the Employment Ordinance. The cases were promptly referred to the Labour Department and the Police in February and March for follow-up action and investigation. After investigation, the Labour Department has initiated prosecution in nine cases. The cleansing service contractor for Shun On Estate was convicted and fined in June by the Labour Tribunal. Accordingly, the Housing Department asked the property management agency of Shun On Estate to terminate the cleansing service contract in accordance with contract terms.

    After dealing with suspected breaches of the Employment Ordinance, the Housing Department continued to conduct in-depth investigation into the working hour and wage records submitted by the contractors to find out whether falsified records and fraudulent acts to deceive the Housing Department had also been involved. Having examined the details of the cases and sought legal advice, the Housing Department considered that there was sufficient evidence to ask the Police to follow up on possible fraud against the Housing Department. The cases were referred to the Police in May and June.

    Before referring reports of suspected breaches or frauds to enforcement departments, the Housing Department has a responsibility to clarify the facts of the incidents and gather basic evidence to facilitate follow-up actions. Under normal circumstances, complaints will not be automatically referred without first understanding the issues involved.

(b)  Between January and end of May this year, there were 114 complaints about remuneration matters from workers employed by outsourced cleansing service contractors in eight public housing estates. The follow-up actions are detailed at the Annex.

(c)  Exploitation of workers' wages and work-related benefits by cleansing service contractors will inevitably affect the quality of service and estate management. Hence, the Housing Department will adopt proactive and stringent measures to monitor its outsourced contractors.  Deterrent penalties will be imposed on contractors for breaching the Employment Ordinance and contract terms. At this stage, the Housing Authority has no plan to conduct undercover operations. Instead, it will continue to cooperate fully with the enforcement departments and explore other practicable ways for more effective investigation and evidence collection so as to bring non-compliant contractors to justice.

Ends/Wednesday, July 6, 2005
Issued at HKT 11:33

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