HONG KONG 2004 - Employment

The Employment Ordinance provides for various employment-related benefits and entitlements for employees. On top of the statutory requirements, employers and employees are free to negotiate on the terms and conditions of their employment.

Since December 2000, all relevant employers have to enrol their employees in Mandatory Provident Fund (MPF) schemes in accordance with the Mandatory Provident Fund Schemes legislation. The participation rate of the relevant employers in MPF schemes, which are regulated by the Mandatory Provident Fund Schemes Authority, reached 97.9 per cent by year-end.

The employment of children under the age of 15 is generally prohibited. Subject to stringent requirements, children aged 13 and 14 may be employed in non-industrial establishments. Young persons aged 15 to 17 may work in industrial establishments, subject to regulations governing their employment conditions. Specific provisions under labour legislation protect their safety, health and welfare.

Labour inspectors conduct rigorous workplace inspections to monitor employers' compliance with the various provisions of labour legislation to safeguard the statutory rights and benefits of local and imported workers, and to ensure that employers possess valid insurance policies covering their liabilities for work injuries of their employees. Labour inspectors also check employees' proof of identity to help combat illegal employment. In 2004, the Labour Department netted 760 illegal workers and 196 employers suspected of employing illegal workers, up 55 per cent and 128 per cent respectively from 2003.

In Hong Kong, the employees' compensation system adopts the no-fault principle whereby compensation is payable irrespective of whether the injury, occupational disease or death was the employee's fault. The Employees' Compensation Ordinance covers injuries or death caused by accidents arising out of and in the course of employment or by specified occupational diseases. An employer must be in possession of a valid insurance policy to cover his liabilities under the ordinance and at common law.

The Employees' Compensation Division of the Labour Department, which administers the Employees' Compensation Ordinance, assists injured employees and family members of deceased employees to obtain compensation from their employers. It also administers a scheme to provide interest-free loans to those injured employees and family members of deceased employees who need financial assistance as a result of a work-related accident. In 2004, loans totalling $164,600 were made to 11 injured employees.

As at end-2004, the Labour Department received 414 employees' compensation claims (including nine fatal cases) relating to Severe Acute Respiratory Syndrome (SARS) reported by employers under the Employees' Compensation Ordinance. Since employees infected with SARS might have residual complications, they would be fit for assessment by the Employees' Compensation Assessment Board only when their medical conditions had stabilised. As at year-end, the Labour Department arranged 247 assessments in respect of respiratory impairment. Since some of the SARS employees had other complications and had received treatment from orthopaedic, endocrine and other specialists, the department also arranged assessments by the relevant specialists. As a result of the department's follow-up action, the statutory compensation claims in seven fatal cases and 76 non-fatal cases have been resolved upon the issue of certificates of compensation assessment by the department as at year-end.

Payment of compensation under the Pneumoconiosis (Compensation) Ordinance is administered by the Pneumoconiosis Compensation Fund Board. Pneumoconiosis sufferers who were diagnosed before 1981 are not covered by the ordinance. They receive ex gratia benefits from the Government under the Pneumoconiosis Ex Gratia Scheme. As at end-2004, 2 241 pneumoconiosis sufferers were receiving compensation in the form of monthly payments under the ordinance or the Ex Gratia Scheme. Family members of the 85 pneumoconiosis sufferers who died as a result of the disease were granted compensation.

The Occupational Deafness Compensation Scheme compensates employees suffering from noise-induced deafness due to employment in specified noisy occupations. It is administered by the Occupational Deafness Compensation Board. In 2004, the board approved 52 applications for compensation due to employment related noise-induced deafness, and paid out $5.9 million as compensation. The board also approved 488 applications in relation to the payment of expenses on hearing-aids in the amount of $2.1 million.

The Employees Compensation Assistance Scheme provides a safety net for injured employees or family members of deceased employees so that they can receive assistance from the scheme in cases where employers default payment of compensation for work-related injuries. The scheme is financed by a levy imposed on all employees' compensation insurance policies taken out by employers.

The Minor Employment Claims Adjudication Board adjudicates claims under the Employment Ordinance and in accordance with individual employment contracts. The board hears and determines employment claims involving not more than 10 claimants for a sum of money not exceeding $8,000 per claimant. During the year, the board concluded 2 594 cases and made awards amounting to $5.9 million.

The Labour Tribunal is part of the Judiciary and provides a quick, inexpensive and informal method of adjudicating disputes between employees and employers, which are not within the exclusive jurisdiction of the Minor Employment Claims Adjudication Board.

In 2004, there were 8 273 cases filed in the tribunal, of which 8 210 were initiated by employees and 63 by employers. Of these, 87.5 per cent were referred by the Labour Relations Division of the Labour Department after unsuccessful conciliation attempts. During the year, the tribunal dealt with 8 622 cases and made awards amounting to more than $488 million, down by 2 763 cases and $217 million compared to 2003.

To expedite investigation and prosecution of wage offences, the Labour Department has a dedicated division to conduct in-depth and prompt investigation into suspected breaches of the Employment Ordinance. In 2004, the department secured convictions for 504 summonses on wage offences, representing an increase of 13.3 per cent over 445 summonses in 2003. The highest fine recorded in a case involving wage offences in 2004 was $140,000, compared with $50,000 in 2003. The department has taken swift action to detect wage offences through inspections of targeted workplaces. It has also strengthened its educational and promotional efforts to remind employers of their statutory obligations to pay wages on time and to educate employees on the right to lodge claims and the importance of serving as prosecution witnesses.