LCQ5: Impact of economic downturn on employees

     Following is a question by Hon Poon Siu-ping and a reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, in the Legislative Council today (October 14):


     It is learnt that with the recent global economic slowdown, the business environment of Hong Kong has gradually worsened and the demand for labour has shown a downward trend, affecting the employment as well as the rights and interests of some employees. In this connection, will the Government inform this Council:

(1) given that the authorities have implemented further enhancement measures under the Supplementary Labour Scheme since May this year to allow contractors to apply for the importation of skilled workers to work in the various public sector works projects under such contractors, so as to enhance the flexibility of worker deployment and to make better use of workers' productivity, of the number of such applications received by the authorities so far and, among them, the numbers of approved cases and workers involved, with a breakdown of the relevant information by post;

(2) given the recent economic downturn of Hong Kong, whether the authorities will consider abolishing the aforesaid enhancement measures to safeguard the employment of local workers; if so, of the details; if not, the reasons for that; and

(3) as I have learnt that tour guides are often required by their employers to make advanced payments on their behalf to meet the costs of receiving inbound Mainland tour groups, and some travel agencies have closed down in recent months due to the decrease in Mainland tourists visiting Hong Kong, quite a number of tour guides have thus been owed wages and advanced payments, how the authorities assist such employees in recovering the advanced payments, which are not protected by labour legislation?



     My reply to the question raised by Hon Poon Siu-ping is as follows:

(1) In January 2015, the Chief Executive announced in the Policy Address that the Government, having regard to the unique characteristics of the construction industry, would implement flexibility enhancement measures under the Supplementary Labour Scheme (SLS) to allow public sector works contractors to have more flexibility in deploying imported workers to work across more than one public sector works contract. The resulting synergy effects would reduce the total number of imported construction workers and lead to more effective utilisation of productivity. The Government, after discussing with the industry through the Construction Industry Council (CIC), drew up detailed flexibility measures and briefed the Labour Advisory Board (LAB) twice on the content of various measures to take into account its views. These new measures were introduced in May this year.

     Under the new flexibility measures, new applications from public sector works contractors are still subject to the prevailing SLS mechanism. These contractors need to launch open recruitment locally, offering salaries not less than the median monthly wages and not less than the monthly market wages as promulgated by CIC for the 26 manpower shortage trades, for the purpose of upholding the priority in employment for local workers and their income levels. In addition, the relevant public sector works departments will continue to exercise stringent control, ensuring that each application is made on the merit of genuine construction needs. LAB will continue to offer views to the Commissioner for Labour on the labour importation applications concerned. Since the implementation of these flexibility measures, the Labour Department has so far received a total of two applications. These applications are under processing.

(2) The overall construction expenditure of both public and private sectors was around $200 billion in 2014, representing an increase of about 10 per cent over 2013. According to the forecast published by CIC in September 2014, the overall construction expenditure will remain at a high level in the coming years.

     CIC conducts regular telephone surveys on the employment situation of construction skilled workers. According to the latest survey findings of March to May 2015, construction skilled workers engaged in the manpower shortage trades worked about five days a week on average, similar to the figures surveyed in the past two years. Given that the construction work is physically demanding, these workers were considered fully engaged.

     Moreover, according to information of the Census and Statistics Department, the median monthly employment earnings of construction workers increased by around 8 per cent in the past year (i.e. from May to July 2014 to May to July 2015), illustrating the sustained stringency of construction manpower.

     The Government will continue to keep in close contact with the industry, labour sector and LAB. On the premise of upholding priority in employment for local workers, construction skilled workers will be imported to facilitate completion of various public sector works projects, thereby ensuring sustainable development of the Hong Kong economy and community. After the aforesaid flexibility measures have accumulated practical operational experience for a certain period of time, the Government will review their effectiveness as appropriate. At present, the Government has no plan to abolish these measures.

(3) The Government is always concerned about the remuneration of frontline staff in the tourism industry. One of the ten measures which the Travel Industry Council of Hong Kong (TIC) has implemented since February 2011 for enhancing the receiving arrangement of the Mainland inbound tour groups is to require local receiving agents of such tours to remunerate the tourist guides and sign agreements with them that stipulate the agreed remuneration. This requirement applies to both travel agents' employees or self-employed tourist guides engaged to provide such service. This measure helps ensure that the tourist guides could receive an expectable income and avoid their reliance only on commission. To further strengthen protection for tourist guides, TIC implemented another measure to prohibit local receiving agents of Mainland inbound tour groups from asking tourist guides to share or advance unreasonable payment for the receiving cost.

     Under the Employment Ordinance (Cap. 57), wages do not include special expenses incurred by an employee by the nature of his/her employment. In general, the expenses so incurred by the employee for various reasons, including advance payment, are not remuneration payable in respect of work and do not form part of the wages. The Government does not encourage employees to advance payments for employers or for work.

     Expenses paid in advance by a tourist guide for leading tours are not wages. If an employee wishes to pursue his/her claim against a closed travel agent for advance payments, he/she may, when a winding-up order or bankruptcy order is made against his/her employer by the court, file a proof of debt under the Companies (Winding up and Miscellaneous Provisions) Ordinance (Cap. 32) or the Bankruptcy Ordinance (Cap. 6) with the Official Receiver's Office or the liquidator for recovery of his/her debts in future.

Ends/Wednesday, October 14, 2015
Issued at HKT 16:13