LCQ1: Statutory holidays
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     Following is a question by the Dr Hon Pan Pey-chyou and a reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, in the Legislative Council today (December 21):

Question:

     The festive holidays for the employees in Hong Kong fall into two categories, namely 17 days of "general holidays" every year provided under the General Holidays Ordinance and 12 days of "statutory holidays" every year provided under the Employment Ordinance. In this connection, will the Government inform this Council:

(a) whether it knows the respective numbers of employees who are entitled to 17 days of general holidays and 12 days of statutory holidays every year in the territory at present; the respective percentages of these employees in the total working population; and the industries to which they belong;

(b) whether it knows the provisions governing the statutory holidays or general holidays enjoyed by the employees in other countries and regions and the respective numbers of days of such holidays; whether there are countries or regions where festive holidays for employees are differentiated by two or more ordinances; if it knows, of the details; if not, whether it has any plan to conduct a survey; and

(c) given that some employees have pointed out that the aforesaid two ordinances have given rise to unfairness in that they stipulate different numbers of holidays for different employees, and that the Government indicated at a meeting of the Panel on Manpower in March this year that it needed to study the matter carefully, of the progress of the study so far; whether the authorities have any plan to raise compensation to employees who work on holidays, eg by granting them one and a half times to two times the paid leave or wage in substitution, so as to provide employees with reasonable compensation; if they have, of the details; if not, the reasons for that?

Reply:

President,

     My reply to the Dr Hon Pan Pey-chyou's question is as follows:

(a) General holidays, as provided for by the General Holidays Ordinance, are days on which banks, educational establishments, public offices and government departments need not open. In other words, they are primarily holidays for the relevant establishments.  Meanwhile, statutory holidays are benefits accorded to employees which employers must provide under the Employment Ordinance (EO). Employers are required to arrange for the granting of statutory holidays to eligible employees in accordance with the law. These two types of holidays are different in nature and were established under different backgrounds.

     Currently, we do not have statistics on the respective percentage of employees who are granted statutory holidays or general holidays among the total working population, nor the industries to which they belong. To have a better picture of the number and distribution of employees taking these two types of holidays, as well as the sectors and occupations in which they are engaged respectively, the Labour Department has commissioned the Census and Statistics Department to collect relevant data for further analysis.

(b) According to information gathered by the Labour Department, out of 10 of our neighbouring countries or areas, six have different practices in respect of general holidays and holidays designated for employees. They are the Philippines, Korea, Malaysia, Japan, Macau and Taiwan. For example, there are 14 days of general holidays in the Philippines in 2011, but employees are only entitled to 10 days of paid holidays, with the remaining 4 days being unpaid. In Korea, there are 14 days of general holidays a year, but according to its labour legislation, employers are only required to grant employees a holiday with pay on Labour Day. The Japanese government stipulates 15 days of general holidays per year. However, there is no provision in the labour law on employees' entitlements to these holidays, as the holiday entitlements of employees are subject to the terms of their employment contracts. In Malaysia, there are 14 days of general holidays per year, among which employees are entitled to 10 (excluding those days designated in a certain year by the government according to the law as additional holidays). On the other hand, in four of our neighbouring countries or areas, there is only one single system on holidays and no separate legislation on general holidays and holidays for employees. They are Australia, Singapore, Mainland China and New Zealand.  The numbers of holidays range from 8 to 11 days per year.

(c) As mentioned above, statutory holidays are benefits to be granted by employers to their employees under the EO. The present stipulation that employees are entitled to 12 days of statutory holidays is a consensus reached progressively by all sectors of society after extensive consultation. As the EO is a piece of legislation applicable to all employers irrespective of the trades, sizes and circumstances of individual establishments, the rights and benefits accorded to employees by the EO constitute only the most basic requirements.

     At present, apart from statutory holidays, some employers (in both the public and private sectors), having regard to their respective circumstances, do offer their employees benefits over and above the requirements of the EO by allowing their employees to take leave on general holidays. However, if all employers are obliged to provide employees with the aforesaid benefits which are beyond the statutory requirements stipulated in the EO, there will, to a certain degree, be an impact on the business cost and labour market. We have to carefully assess this proposal with a view to balancing the interests of employers and employees. The acceptance and consensus of society in this regard are also essential.

     All along, the Government reviews the labour legislation from time to time in the light of Hong Kong's changing social circumstances and the pace of economic development to ensure that the relevant legislative provisions strike a balance between the reasonable demands of employers and employees, and that the statutory protection accorded to employees keep abreast of times. As the proposal to increase the number of statutory holidays would, to a certain extent, have an impact on business cost, we need to collect the relevant data for further analysis. We have commissioned the Census and Statistics Department to collect statistics on the number of employees taking statutory holidays or general holidays and the distribution thereof, as well as other information such as the sectors and occupations in which they are engaged. It is envisaged that the relevant data, upon compilation, would be passed to the Labour Department for further analysis in the first half of next year.

     Regarding the arrangement of holidays in substitution, if an employee is required to work on a statutory holiday, the EO provides certain flexibility by allowing employers who are unable to allow their employees to take leave on the day of statutory holiday to provide a holiday in substitution on other days.  According to the EO, if an employer requires his employees to work on a statutory holiday, he may, with prior notice given to the employees, arrange for an alternative holiday within a specified period to be taken by the employees. The employer may also agree with the employees to have the statutory holiday substituted by a holiday on another day within a certain period as prescribed by the law. The existing provisions in the EO do not require an employer to provide other compensation on top of the normal wages to an employee who is required to work on a statutory holiday. In view of the different circumstances and needs of different sectors, enterprises and posts, many employers have a practical need to arrange for their employees to work on the day of statutory holiday. Should all employers be obliged by law to provide additional compensation to their employees such as granting them one and a half times to two times of holidays or holiday pay if they could not allow their employees to take leave on the day of statutory holiday, this will, to a certain degree, have an impact on the business cost of local enterprises and the labour market. The present requirement concerning statutory holiday pay is a consensus reached after extensive consultation with employers and employees. We have at present no plan to change the existing requirement.

     As regards making monetary compensation to require an employee to work on a statutory holiday, the current EO stipulates that employers must let their employees take statutory holidays and must not make payment in lieu of granting holidays to them. Otherwise, they are liable to prosecution and, upon conviction, to a maximum fine of $50,000. To introduce a law permitting an employer to "buy out" an employee's statutory holidays by paying a greater sum of monetary compensation is tantamount to indirectly encouraging employees to give up their opportunity to enjoy the benefits of taking statutory holidays. This runs counter to the spirit of the law which prescribes that employees must be granted statutory holidays. As such, we have no intention to institute such a practice under the EO.

Ends/Wednesday, December 21, 2011
Issued at HKT 15:16

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