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LCQ2: Importing foreign labour and Employees Retraining Levy

     Following is a question by the Hon Chan Yuen-han and a reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, in the Legislative Council today (February 6):


     At the meeting of this Council on the 9th of last month, the Secretary for Development (SDEV) advised that as the unemployment rate and underemployment rate in the construction industry were 4.4% and 7% respectively, the Government had no plan to propose importing foreign labour. However, the Chief Executive (CE) told this Council on the 17th of last month that "when the local labour force is insufficient to support our development needs, we have to consider importing construction workers from outside Hong Kong." Moreover, the 2013 Policy Address has proposed abolishing the collection of the Employees Retraining Levy (the levy) from employers of foreign domestic helpers. In this connection, will the Government inform this Council:

(a) of the reasons for the discrepancy between the remarks made by CE and SDEV on whether it is necessary to import foreign labour for the construction industry;

(b) whether the authorities have, before proposing the initiative to abolish the levy, considered its impact on the employment of local workers, and whether they have planned to inject funds into the Employees Retraining Board (ERB); if they have such plans, of the timeframe and amount of such injection; and

(c) of the respective numbers of trainees who had and those who had not succeeded in securing employment after taking the courses of ERB and the Construction Industry Training Authority in the past three years; whether the authorities have examined why some trainees were unable to secure employment; regarding the problem of manpower mismatch, whether the authorities will enhance the training efforts and resource input so as to secure a sufficient supply of local labour to undertake work in different trades, and study introducing improvement to the employment terms and working environment of construction site workers in order to attract more people to join the industry; whether the authorities will review the existing policy to eradicate the importation of cheap foreign labour by employers under the disguise of the "General Employment Policy" and apprentice training, etc.; whether they will consider charging fees from such employers and stepping up monitoring in this regard?



     Regarding the Hon Chan Yuen-han's question, the reply is as follows:

(a) The Special Administrative Region Government's policy is to ensure priority of employment for local workers and to safeguard their salaries and benefits. Employers must accord priority to local workers in filling job vacancies. Employers who have genuine need but with difficulties in identifying suitable staff locally may consider applying for importing workers to fill vacancies through established channels, including the Supplementary Labour Scheme (SLS) administered by the Labour Department (LD).

     In reply to a supplementary question from a Legislative Councillor at the Legislative Council (LegCo) meeting on January 9, 2013, the Secretary for Development stated that local workers would be accorded priority in employment. Contractors may apply to import workers through the SLS for individual trades in need. In 2012, there were over 200 construction workers in various trades imported under the SLS.

     In view of projected manpower shortage and ageing problems for individual trades, the relevant Bureau will strengthen measures to attract new entrants, particularly young people, to the construction industry. The Administration will provide multi-skills training for local workers, improve the work environment and conditions, and provide job matching with a view to better utilising the manpower resource of the local construction industry and sharing the fruits of economic growth with them.

     At present, the unemployment rate of the construction industry stands at 4.9% and the underemployment rate 7.4%. The current manpower situation is not as severe as that during the peak period of the Airport Core Programme, with the unemployment rate at 2%. Looking ahead, the Administration expects the annual capital works expenditure for the next few years to exceed $70 billion, which is a significant increase as compared with the actual expenditure of $20.5 billion for 2007-08 and the forecast expenditure of $62.3 billion for 2012-13. While continual investment in infrastructure as well as public and private housing construction will create more opportunities for the construction industry, it will add further pressure to the manpower situation. To ensure that various works projects can proceed smoothly, the Administration will closely monitor the labour supply and demand in the construction industry.

     In reply to a question from a Legislative Councillor at the LegCo meeting on January 17, 2013, the Chief Executive (CE) stated that the Government should meet the employment needs of local workers first. When there is inadequate local workforce to support the needs of development, importation of construction workers has to be considered. The emphasis on meeting the employment needs of local workers first is consistent with the established policy of the Special Administrative Region Government and the statement of the Secretary for Development.

(b) Since the 1970s, importation of foreign domestic helpers (FDHs) has been allowed to meet the shortfall of local live-in domestic workers. In his 2013 Policy Address, the CE announced to abolish the Employees Retraining Levy imposed on FDH employers (FDH levy) to ease the burden on concerned families. This arrangement does not affect the long established measure on the importation of FDHs. It also does not affect local domestic helpers as they mainly provide part-time domestic service which differs from the live-in arrangements of FDHs.

     The FDH levy forms the major source of funding for the Employees Retraining Board (ERB). On the basis of the existing utilisation of training places, it is estimated that the balance of the Employees Retraining Fund can sustain ERB's service until end-2015. In his Policy Address, CE affirmed the contribution of the ERB and considered that it should be provided with sustained and stable financial support as a long-term commitment to enhancing the productivity of local workers. I will make proposal to the Financial Secretary on the long-term financial arrangements for the ERB in due course.

(c) In the past three years (ie 2009-10 to 2011-12), the number of trainees enrolled in ERB courses were about 101 000, 98 000 and 105 000 respectively; about half of the trainees attended full-time placement-tied courses offered by the ERB for the unemployed. Upon completion of the full-time placement-tied courses, job placement and follow-up services of three to six months are offered to trainees by the training bodies. In the past three years, about 123 000 trainees (ie about 82% of trainees who successfully completed full-time placement-tied courses) were placed during the placement period. According to the training bodies, some trainees were not placed in jobs during the period for "personal reasons" (about 50%) and "the need to take care of their families" (about 40%).

     As regards training for the construction industry, according to the Construction Industry Council (CIC), about 4 200 trainees, which account for about 90% of the graduates, have secured employment in construction industry over the past three years. Some trainees did not join the industry for reasons of unsuitability of the work, pursuit of further studies and other personal factors.

     The Administration has been collaborating with CIC to increase manpower supply for the construction industry. In 2010 and 2012, the Administration obtained approval from the LegCo for funding of a total of $320 million to support CIC in strengthening training for local construction personnel and to attract new entrants to the industry through promotion and publicity activities. In collaboration with CIC, the Administration has drawn up a total manpower strategy adopting a multi-pronged approach to address the construction manpower demand, including launching the Enhanced Construction Manpower Training Scheme and Contractor Cooperative Training Scheme. CIC has significantly increased the training places from about 2 000 per year in 2009 to about 6 000 per year starting from this year. For the current and next year, it is expected that there will be more than 10 000 training places in total. Furthermore, in 2011, CIC launched the "JobsNet" to provide a free online employment platform to facilitate the matching of employers and job-seekers.

     The Administration has collaborated with CIC to launch the "Build Up" publicity campaign to uplift the image of the industry and enhance the working environment at construction sites in order to attract young people to join the industry, including the initiatives to improve site tidiness and provision of additional welfare facilities on site, strengthen the reward and penalty system for contractors, step up safety training for workers and enhance promotion and publicity of site safety.

     As regards the General Employment Policy (GEP), the objective is to allow local employers to recruit professionals not readily available in Hong Kong to meet their manpower needs. The GEP is not a labour importation scheme under section 14(3) of the Employees Retraining Ordinance. Relevant employers are not required to pay levy in accordance with the Ordinance.

     Since December 2011, the Immigration Department (ImmD) in processing relevant applications has required employers to make declarations on whether applications have been made under the SLS in the 18 months immediately before submitting their applications. When necessary, the ImmD will consult the LD with a view to preventing employers from applying for the same job vacancies to the ImmD under the GEP after their SLS applications have failed.

     As for training, the entry arrangement for training in Hong Kong aims to allow employees of the outward branches or subsidiaries of enterprises in Hong Kong to enter for training for no more than 12 months. This arrangement is not for filling local staff positions. In addition, trainees must leave Hong Kong after training and cannot remain for employment irrespective of the length of the training.

Ends/Wednesday, February 6, 2013
Issued at HKT 14:42


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