The state of labour relations in Hong Kong remained harmonious. In 2004, the Labour Relations Division of the Labour Department handled 270 trade disputes, a decrease of 37 per cent from 2003. There were only two work stoppages, resulting in the loss of 351 working days. The average loss was 0.11 working day per 1 000 salaried employees and wage-earners, which is among the lowest in the world. During the year, the division handled 28 396 claims for wages and other employment-related benefits or entitlements. This represented a decrease of 16 per cent from 2003. Of all disputes and claims conciliated by the division in 2004, 67.3 per cent were settled — a record high since 1994.

The Labour Department organises a wide variety of activities to promote harmonious labour relations in Hong Kong. To enhance public understanding of the Employment Ordinance, promotional activities such as seminars and talks are organised and a wide range of publications is produced for free distribution to the public. Also, the information is widely publicised through the department's website and the media.

At the enterprise level, the department promotes good labour management practices and effective communication. A network of 18 Human Resources Managers' Clubs has been established and experience-sharing sessions and briefings are organised for human resources practitioners. The department also promotes tripartite dialogue at the industry level through the setting up of committees comprising representatives of employers, employees and labour officials. With the assistance of the department, nine tripartite committees have been formed, covering the catering, construction, theatre, logistics, property management, printing, hotel and tourism, cement and concrete, and retail industries. The Good People Management Awards were presented during the year to commend employers achieving good staff management practices.

Trade Unions

Trade unions must be registered under the Trade Unions Ordinance (TUO), which is administered by the Registrar of Trade Unions. Once registered, a trade union becomes a body corporate and enjoys immunity from certain civil suits.

During the year, 21 new unions were registered, bringing the respective number of trade unions and trade union federations registered under the TUO to 704 (comprising 659 employee unions, 23 employers' associations, and 22 mixed organisations of employees and employers) and three as at year-end. In the past five years, the declared membership of employee unions and the trade union participation rate have broadly stayed at around 680 000 and 22 per cent respectively.

About half of the employee unions are affiliated to four major labour organisations registered under the Societies Ordinance: the Hong Kong Federation of Trade Unions (154 unions), the Hong Kong and Kowloon Trades Union Council (39 unions), the Hong Kong Confederation of Trade Unions (61 unions), and the Federation of Hong Kong and Kowloon Labour Unions (52 unions).

Protection of Wages on Insolvency Fund

The Protection of Wages on Insolvency Fund is financed by an annual levy, increased to $600 with effect from May 2002 on each business registration certificate. Employees who are owed wages and other employment termination benefits by insolvent employers may apply to the fund for ex gratia payment.

The fund covers arrears of wages not exceeding $36,000 accrued during a period of four months preceding the applicant's last day of service; wages in lieu of notice for termination of employment up to $22,500 or one month's wages, whichever is less; and severance payment up to $50,000 plus 50 per cent of any entitlement in excess of $50,000.

As Hong Kong's economy further improved, the number of applications for the fund continued to drop. The number of applications decreased from 22 350 in 2003 to 13 631 in 2004, a substantial drop of 39 per cent. The fund recorded an average monthly surplus of $4.08 million in 2004 and registered a surplus of $49 million by year-end, the first year that the fund recorded a surplus since the Asian financial crisis in 1997. In 2004, the fund disbursed a total of $381.5 million to 19 062 eligible applicants.