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Following is a written reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, to a question by the Hon Tsang Yok-sing on claims handled by Labour Tribunal in the Legislative Council today (January 9):
Question:
Will the Government inform this Council whether it knows:
(a) the number of cases in the past three years in which employees lodged claims at the Labour Tribunal ("LT") to recover outstanding wages; among them, the respective numbers of cases in which the employees' claims were successful and unsuccessful, as well as the average time taken from the date of filing to conclusion in such cases;
(b) among the successful cases referred to in (a), the average percentage of the amounts of compensation awarded by LT to the employees concerned in the amounts they claimed, and the average percentage of the amounts of money ultimately received by such employees in the amounts awarded; and
(c) apart from implementing the measures which have been accepted by the Chief Justice of the Court of Final Appeal for solving problems in connection with the enforcement of LT's awards, how the relevant authorities assist the employees who have lodged and succeeded in their claims to recover outstanding wages in recovering the amounts awarded, and whether they have plans to review the relevant policies?
Reply:
Madam President,
(a) According to the information provided by the Labour Tribunal, the number of cases handled, the number of awards made (where sums were awarded) and the average time taken from filing of claim to conclusion over the past three years are set out below -
2007
Year 2005 2006 (Jan to Nov)
---- ---- ---- ----------
(a) Number of
cases handled 6 570 6 543 5 649
by the Labour
Tribunal
(b) Number of
cases where 5 349 5 383 4 393
monetary
awards were
¡@¡@made (including
arrears of
wages, wages
in lieu of
notice,
severance
payment, etc.)
(c) Average
length of 41 days 47 days 55 days
period from
the date of
filing to
conclusion
As claims generally have multiple items and in some cases there are more than one claimants, it is difficult to differentiate the cases that are successful or unsuccessful. For instance, a claimant may succeed in one or two items of a claim but fail in the others. In the above table, row (b) only shows the number of awards for general reference. Besides, some claimants may withdraw their claims after they have settled directly with the defendants subsequent to filing.
(b) As regards the percentage of the amounts of compensation awarded by the court as against the amounts claimed by the claimants under the items where awards were made, the figures for the past three years are set out below (the figures do not differentiate between the claims lodged by the employers and those lodged by the employees) -
2007
Year 2005 2006 (Jan to Nov)
---- ---- ---- -----------
(a) Amounts $325m $333m $235m
awarded
(b) Amounts $481m $518m $401m
claimed
(c) Percentage 68% 64% 59%
of amounts
awarded as
against
amounts
claimed
Furthermore, as some employees and employers settle the judgement sum on their own, the Labour Tribunal has no available information on the percentage of the amounts of money ultimately received by the employees as against the amounts awarded by the court.
(c) The Administration is concerned about the failure of some employees in obtaining the judgement sum awarded by the Labour Tribunal (LT). In essence, the issue relates to the enforcement of awards made by the Judiciary. As in the case of all civil actions, the parties involved in the claim bear the responsibility of enforcing the judgement if it is not complied with.
The experience of Labour Department (LED) reveals that there are broadly two scenarios where the employees could not recover their wages in arrears despite having an LT award in their favour: (1) the employer has become insolvent; and (2) the employer is solvent and still in operation.
In the first scenario where the employer has ceased business or become insolvent, LED will assist the affected employees to apply for ex gratia payment of wages in arrears and other termination payment from the Protection of Wages on Insolvency Fund. LD will also refer such employees to the Legal Aid Department for assistance in instituting winding-up or bankruptcy proceedings against the insolvent employer.
In the second scenario where the employer is solvent and still in operation, LD will initiate vigorous enforcement action against the employer. Upon receipt of complaints by employees on defaulted payment of LT awards, labour inspectors of the LD will conduct follow-up investigation on these cases. If there is sufficient evidence, we will prosecute employers who have violated the Employment Ordinance.
In 2007, LD secured 171 convicted summonses in respect of cases of defaulted payment of LT awards, up 10.3% from 155 in 2006. Among these cases, one convicted employer was fined $70,000 while another was sentenced to immediate imprisonment for two weeks. These heavy sentences have sent a strong message to employers that breaches of the Employment Ordinance are serious offences.
Whilst LD's enforcement action against wage default is confined to criminal prosecution and the employees concerned could not benefit from the criminal sanction imposed on the offenders, we believe that our stringent enforcement effort has served to strengthen the deterrent effect against wage defaults. To further enhance the deterrent effect, the maximum penalty for wage offences in the Employment Ordinance has, with effect from 30 March 2006, been substantially increased from a fine of $200,000 and imprisonment for one year to a fine of $350,000 and imprisonment for three years.
The Administration is aware of the problems faced by some employees in recovering the sum awarded by LT in their favour. We will continue to work closely with the Judiciary to explore feasible improvement measures to safeguard the statutory rights of employees.
Ends/Wednesday, January 9, 2008
Issued at HKT 15:56
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