Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Part V Managing Employee Relations EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 9 Employment Laws in Hong Kong Brian van Langenberg and Fiona Loughrey, Simmons & Simmons Introduction The evolution of Hong Kong’s employment laws reflects an intention to minimize government intervention in the private and predominantly capitalist economy. As a consequence, the legal foundation of the employment relationship is the individual employment contract between the employer and the employee, the essence of which is the promise to pay wages by the employer in exchange for the promise to work by the employee. The contract is built on the nineteenth century English assumption that the agreement is negotiated by parties of equal bargaining strength in a free market, and each party has freedom to liaise and agree on what terms to contract. The actual inequality of power in the relationship between the employer and employee is ignored. In addition, the rules of English common law provide another source of employment law in Hong Kong. The laws made by the precedent-creating decisions of the courts, the inference from a trade practice, or a special custom in the industry to which the contract relates all apply in determining what constitute the contract agreed between the parties.1 But as Hong Kong was advancing its economy in the past, there was an increasing demand for improved employment conditions and harmonization of local labour standards with international labour conventions. Following the disturbances of 1966 and the confrontation of 1967,2 the government intervened through the enactment of the Employment Ordinance in 1968. The government asserted that such protective legislation was established to provide a statutory floor of rights for workers. It was also aimed at establishing labour standards comparable with those in the territory’s neighbouring countries in Asia,3 and there was arguably a mild paternalistic concern from the elite for social improvement, particularly in relation to labour conditions. It is against this background that this chapter is written. The purpose of this chapter is to give a general overview and evaluation of employment laws in Hong Kong. In particular, we look at the employer’s obligations and liabilities to their employees, and also consider ways to protect themselves as employers. This chapter will introduce EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 164 Brian van Langenberg and Fiona Loughrey, Simmons & Simmons the key employment legislation of which employers need to be aware, and provide an overview of the Employment Ordinance, one of the most important employment laws in Hong Kong. There will be discussion of employees’ rights during the course of their employment, as well as upon termination of employment. Once an employer is aware of the legal obligations of employment, the risk of being involved in a legal dispute can be more effectively minimized. This chapter will also give employers guidance on how employment disputes are usually dealt with under the laws of Hong Kong. Finally, it will provide some guidelines for HR professionals on their roles in terms of legal compliance, and how they should help employers and employees in the workplace. Key Employment Legislation The Employment Ordinance is the principal piece of employment legislation in Hong Kong. This ordinance protects all employees working in or out of Hong Kong, with only a few exceptions, such as workers covered under the Contracts for Employment Outside Hong Kong Ordinance, family members of the employer living with the employer, seamen serving under ships’ articles, and civil servants working for the government. In addition, certain sections do not apply to apprentices registered under the Apprenticeship Ordinance. Other employment-related legislation in place at the time of going to press includes: the Labour Tribunal Ordinance, the Trade Unions Ordinance, the Personal Data (Privacy) Ordinance, the Mandatory Provident Fund Schemes Ordinance, the Occupational Safety and Health Ordinance, the Employees’ Compensation Ordinance, and anti-discrimination laws in the form of the Sex Discrimination Ordinance, the Disability Discrimination Ordinance, the Family Status Discrimination Ordinance and the Race Discrimination Ordinance (which has been passed but not expected to be fully effective until some time in 2009). Types of Employees The Employment Ordinance does not make a distinction between temporary, casual, parttime, or full-time employees. Instead, entitlements to certain benefits under the Employment Ordinance depend on whether or not an employee is under a “continuous contract”. To be in “continuous” employment, an employee must have been employed for four or more weeks. A “week” is any period of seven days ending on a Saturday, in which an employee has worked a minimum of 18 hours. In practice, most “full-time” employees are entitled to benefits under the Employment Ordinance, whilst those who work less than 18 hours per week (e.g., temporary, casual, and part-time employees) are not. The Employment Ordinance now generally applies in the same way to manual, whitecollar, and managerial employees. Until mid-1990, the ordinance only protected lower paid and manual workers, but this distinction has been removed. There are now only minor differences in the application of the Employment Ordinance to manual workers. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Employment Laws in Hong Kong 165 Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Employment Contracts An employment contract sometimes takes the form of a simple employment letter addressed by the employer to the employee (who may accept the offer of employment by countersigning the letter). A formal employment agreement is more common with senior employees. However, particularly as employment laws and codes expand in this jurisdiction, it is recommended that all terms of employment be properly reflected in a well-drafted contract. Certain terms and conditions of employment may be presented in, for example, the staff handbook or the company’s intranet, which may incorporate specific details in relation to the employment (e.g., hours of work, conflicts of interest, etc.) as well as company policies and procedures. It is important for HR professionals to bear in mind that if the provisions of the staff handbook and other work rules are to be contractually binding on the employee, such provisions must be brought to the attention of and accepted by the employee; it is preferable for this to occur on or before the formation of the employment contract. Generally, parties are free to agree between themselves the terms and conditions to be included in their employment contract. However, the Employment Ordinance provides for certain minimum benefits, and any contractual term in a contract of employment which purports to reduce or extinguish any right, benefit, or protection conferred upon the employee by the Employment Ordinance is void. The terms most commonly provided in contracts of employment include: • Starting or commencement date • Duration of the contract, including probationary period • Position • Place of work • Wages and the payment of wages • Allowances and other entitlements (including housing, transportation, relocation, education allowances, and retirement plans) • Bonuses • Hours of work • Rest days • Leave provisions (including holidays, annual leave, and sick leave) • Termination provisions, including restrictive covenants • Personal data privacy statement • Staff handbook or policies and procedures • Governing law and jurisdiction Working Conditions Wages Under the Employment Ordinance, “wages” means all remuneration, earnings, allowances, attendance bonus, commission, overtime pay, tips, and service charges, however calculated, capable of being expressed in terms of money, payable to an employee in respect of work done or to be done under his or her contract of employment. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 166 Brian van Langenberg and Fiona Loughrey, Simmons & Simmons The Employment Ordinance requires an employer, before commencement of employment, to inform each employee of the conditions of service relating to wages, endof-year payment, and length of notice of termination. An employer is also required to maintain at all times a record of the wage and employment history of each employee during the previous 12 months. The wage period in respect of which wages are payable under a contract of employment is deemed to be one month unless otherwise specified in the contract of employment, and wages due in arrears must be paid not later than seven days after the end of the wage period. Wages must be paid in cash to an employee unless the employee agrees otherwise. It is therefore recommended that a provision be included in the employment contract to record an employee’s agreement to payment by other means, such as by cheque or by direct deposit into the employee’s bank account or to an employee’s duly appointed agent. Payment must be made on a working day. An employer cannot make deductions from wages or other sums due to the employee, except that limited deductions may be made in the following circumstances: • For absence from work • For damage to or loss of the employer’s goods, equipment, or property, caused by the neglect or default of the employee • For meals and accommodation • For recovery of any advance or over-payment of wages received by the employee (which may not exceed one quarter of the wages in that wage period) • With the written consent of the employee, for the recovery of any loan made by the employer to the employee • At the request, in writing, by the employee, for the payment of contributions of any medical benefit or retirement scheme The total of all deductions which may be deducted in any one wage period, other than in the case of absence from work, is generally one half of wages attributable to that period. On the other hand, there is no statutory minimum wage in Hong Kong (other than for certain groups of foreign workers working in Hong Kong, such as domestic helpers, and for trainee solicitors). In addition, there is no statutory restriction on working hours for employees who are aged 18 and above, and no requirement for employers to pay employees for overtime work. Employees working under continuous contracts (that is, contracts under which employees work for at least 18 hours in each of four consecutive weeks) are, however, entitled to at least one day of rest per week, in addition to annual leave and statutory holidays. Bonuses It is a common practice in Hong Kong for an annual end-of-year bonus to be paid to employees, but there is no statutory entitlement to such payment. However, if an annual bonus is provided in an employment contract entered into on and from 27 June 1997, the Employment Ordinance presumes that such bonus is mandatory, unless the discretionary EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Employment Laws in Hong Kong 167 nature of the bonus is expressed in writing. As such, employers should expressly state that a bonus is discretionary if that is the intention, so that the inference of fixed obligation does not arise. It is also important to note that even if the contract provides that a bonus is discretionary, the discretion is not unrestricted and should be exercised rationally, properly, and in good faith. If an employment contract provides for an end-of-year payment, the Employment Ordinance provides that an employee will be entitled to a proportional amount of the payment if that employee has been employed for at least three months in the payment period, and either continues in employment after the payment period or, where he leaves employment, is dismissed other than by way of summary dismissal and has not resigned. Working Hours There are no statutory restrictions in Hong Kong on hours of work or overtime for workers aged 18 and older. Restrictions on the hours during which children (aged 13 or above and less than 15), and young persons (aged 15 or above and less than 18) are legally permitted to work are set out in the Employment of Children Regulations and the Young Persons (Industry) Regulations, respectively. Both sets of regulations are issued under the Employment Ordinance. Rest Days An employee under a continuous contract is entitled to one rest day per week, in addition to statutory holidays and annual leave. An employer cannot require employees to work on rest days unless due to an unforeseen emergency. In such circumstances, the employer must appoint a substituted rest day within the period of the following 30 days. An employee may, however, voluntarily work on rest days, either at the request of his or her employer or on his or her own initiative. Holidays and Leave The Employment Ordinance sets out the statutory minimum requirements for holidays and leave. The employment terms may of course provide more favourable benefits. Statutory Holidays The Employment Ordinance sets out a list of statutory holidays which an employer must grant to an employee. Instead of giving a holiday on the actual statutory holiday, an employer may appoint an alternative day, within 60 days before or after the statutory holiday, as an alternative holiday. By agreement between an employer and his or her employee, a substituted holiday can be appointed to replace a statutory holiday or an alternative holiday, provided such substituted holiday falls within 30 days of the holiday it replaces. An employee who has been employed for at least three months is entitled to be paid on statutory holidays. No holiday pay or other sum may be made in lieu of the grant of a statutory holiday. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY 168 Brian van Langenberg and Fiona Loughrey, Simmons & Simmons Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Annual Leave Every employee who has been employed for at least 12 months is entitled to a minimum number of paid annual leave days, based on the period of his or her employment. Annual leave is in addition to rest days, statutory holidays, and maternity leave, to which the employee is entitled under the Employment Ordinance. For employees with at least one year and less than three years of service, the minimum number of days of annual leave is 7, and an extra day is added for every subsequent year of service up to a maximum of 14 days for those with at least nine years of service. Annual leave must be taken within the period of 12 months beginning immediately after the end of the year to which the leave relates. Annual leave must be taken on consecutive days, except in two circumstances. If an employee’s annual leave entitlement does not exceed 10 days, he or she may request for his or her leave to be divided, but not more than three days may be taken separately. Or, if the employee’s annual leave entitlement exceeds 10 days, at least seven days must be taken consecutively and the remaining leave may be taken separately. An employer can make payments in lieu of the employee taking all or a part of the annual leave entitlement in the following circumstances: • Payment in lieu of annual leave can be made on termination of employment; • Payment in lieu of annual leave can be made to an employee when that employee is entitled to more than 10 days of statutory annual leave in respect of a particular leave year and the employee works on not more than the number of days by which such annual leave exceeds 10. If an employee agrees to work on days over and above the 10 days, then that employee is entitled, in addition to the annual leave pay, to the wages receivable for the period of time worked on that day. Sick Leave An employee who has been employed for a period of one month is entitled to paid sickness days at a rate of two days for each completed month during the first 12 months of employment, and at the rate of four days for each month thereafter. The allowance may be accumulated up to a maximum of 120 paid sickness days. An employee is entitled to paid sickness allowance in respect of sickness days if he or she is absent from work for four or more consecutive days by reason of injury or sickness or, in the case of a female employee, she is absent from work for ante-natal medical examination or post-confinement medical treatment, or by reason of miscarriage. Where an employee exhausts his or her paid sickness day entitlement, sick leave will be unpaid. The daily rate of sickness allowance is a sum equal to 80 percent of wages. An employer must keep a record of details of employees’ entitlements to sickness allowances and sickness days taken. The records must show for each employee the date of commencement and termination of the employment, all paid sickness days accumulated, all paid sickness days taken in respect of which sickness allowance is payable, and all sickness allowance paid. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Employment Laws in Hong Kong 169 Employers are required to maintain records of sick leave separated into two sections: Category 1, containing the first 36 days accumulated sick leave days, and Category 2, showing the balance up to a maximum of 84 days (as employees are entitled to accumulate up to 120 days of sick leave days). When an employee takes sickness days, they must first be deducted from Category 1, then from Category 2. Where an employee takes paid sickness days entered in Category 2, the employer may require him or her to produce, in respect of each sickness day, a medical certificate. Maternity Leave Female employees are entitled to maternity leave if they have been employed under a continuous contract immediately before the commencement of their maternity leave. The period of maternity leave is 10 weeks from and inclusive of the date of commencement of maternity leave, or the actual date of birth if it occurs before the commencement of maternity leave. In addition, the employee will be entitled to a further period equal to the number of days, if any, beginning on the day after the expected date of confinement up to and including the actual date of confinement, which will be taken after the 10-week maternity leave period. A further period of not more than four weeks may be taken on grounds of illness or disability arising from the pregnancy or confinement. The employee may, by agreement with the employer, extend her maternity leave. The 10-week maternity leave may commence on a date agreed with the employer between two and four weeks before the expected date of confinement. If no date is specified or agreed, the maternity leave will commence four weeks before the expected date of confinement. An employee intending to take maternity leave must give notice of her pregnancy and her intention to take maternity leave after her pregnancy has been confirmed by a medical practitioner. Presentation of a medical certificate confirming her pregnancy will satisfy this requirement. The employer can also require the employee to produce a medical certificate specifying the expected date of birth. If a female employee has been employed under a continuous contract for a period of not less than 40 weeks immediately before the date of her commencement of maternity leave, she is entitled to paid maternity leave for the 10-week maternity leave. Maternity leave pay is calculated at 80 percent of the employee’s wages. No payment may be made in lieu of maternity leave. Calculation of Leave Pay Pursuant to an amendment made to the Employment Ordinance in July 2007, the rate of leave pay is generally calculated by reference to the employee’s daily average wage earned during the 12 calendar months immediately preceding the time of calculation. Health and Safety The Occupational Safety and Health Ordinance imposes a general duty on employers to ensure the safety and health at work of all their employees, and specific obligations such EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 170 Brian van Langenberg and Fiona Loughrey, Simmons & Simmons as to provide first aid equipment and conduct fire drills. Additional workplace specific obligations are imposed on employers by the regulations made under the Occupational Safety and Health Ordinance and the Factories and Industrial Undertakings Ordinance for employees engaged in hazardous activities in workplaces. Under the Employees’ Compensation Ordinance, an employer is liable to pay compensation to an employee if the employee sustains personal injuries from an accident arising out of and in the course of the employment, or contracts occupational diseases which result in death or incapacity. Generally, the employer is liable to pay compensation even if the employee might have committed acts of negligence when the accident occurred. Employers are required to take out insurance to cover any organizational liability for employees’ compensation (see also Chapter 6). Data Protection The Personal Data (Privacy) Ordinance (PDPO) sets out six data protection principles for the collection, processing, storage, use, security, and transfer of personal data. Employers must comply with these principles in handling the personal data of their employees. Employers are required under the PDPO and the Code of Practice on Human Resource Management to provide job applicants and employees with a Personal Information Collection Statement which sets out, amongst other things, the purposes for which personal data is collected and to whom it will be provided. It is also recommended that employers have a personal data policy in place. Employers should also be aware of the Privacy Guidelines: Monitoring and Personal Data Privacy at Work which is introduced to promote the protection of the personal data privacy of employees where employee monitoring is carried out at work resulting in the collection of personal data of employees. Retirement Schemes Mandatory Provident Fund Schemes Ordinance (MPFSO) The MPFSO requires all employers in Hong Kong, subject to only limited exceptions, to enrol employees in a retirement scheme. Prior to its introduction on 1 December 2000, the Occupational Retirement Schemes Ordinance (ORSO) was the principal ordinance relevant to retirement schemes, which still provides a framework for the regulation of private retirement schemes in Hong Kong. The MPFSO established a mandatory retirement system which is largely run by the private sector. All MPF schemes must be established under a trust governed by the laws of Hong Kong. More details can be found in Chapter 6. Occupational Retirement Schemes Ordinance (ORSO) Under ORSO, all occupational retirement schemes are required to be registered or exempt from registration, or at least be the subject of an application for registration or exemption. If an employer enters into a contract with an employee under which membership of an occupational retirement scheme is to be provided, the employer must apply for registration (or exemption) within three months of entering into the contract. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Employment Laws in Hong Kong 171 Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. The legislation does not require employers to provide retirement schemes for their staff, nor does it attempt to specify minimum benefits. It simply lays down certain standards of prudence and accountability for the protection of beneficiaries. Life Insurance It is not a legal requirement in Hong Kong to offer life insurance to employees; however, it is possible and reasonably common for an employer to provide life insurance benefits, either alone or as part of a medical coverage insurance policy, as a contractual benefit. Termination of Employment Variation of Contract and Constructive Dismissal In practice, an employer may unilaterally vary the terms of a contract of employment, but if the variation serves to extinguish or reduce any right, benefit, or protection conferred or to be conferred on the employee by the Employment Ordinance, the employee may be entitled to remedies on the basis of variation without a valid reason (which are the same remedies as those under termination without a valid reason, as discussed below). A variation may also, of course, be achieved by agreement between the parties. A unilateral variation of the terms of the contract may lead an employee to resign and claim constructive dismissal (i.e., allege that the employer has acted in fundamental breach of contract and that therefore he or she is resigning as a result of the breach), or claim for breach of contract. If successful, the employee will be able to recover all amounts due from the employer upon termination of employment. Suspension of Contract and Garden Leave The Employment Ordinance permits an employer to suspend an employee without notice or payment in lieu for up to 14 days as a disciplinary procedure under the following circumstances: • As a disciplinary measure for any reason for which the employer could have summarily dismissed the employee • Pending an employer’s decision on whether the employee will be summarily dismissed • Pending the outcome of any criminal proceedings against the employee relating to his or her employment A suspended employee is entitled to terminate his or her contract of employment without notice or payment in lieu. Garden leave involves a period of enforced absence from the workplace, and usually suspension of duties, for an employee subject to notice of termination (whether notice is given by the employee or employer). The employee therefore remains in employment throughout the period of garden leave so that he or she continues to be bound by all the terms of the contract of employment, except that the obligation to work is waived and the employee is required to stay away from the workplace. The advantages of garden leave are EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 172 Brian van Langenberg and Fiona Loughrey, Simmons & Simmons that it enables an employer to restrict competition by ensuring that the employee cannot work for a competitor for the duration of the notice period, while at the same time limiting the damage or inconvenience to the employer’s business that may occur by allowing the employee to continue working through the notice period. However, in the absence of an express clause in the employment contract or an implied right to place the individual on garden leave, imposing garden leave may amount to a fundamental breach of contract if the employee can establish that the employer is obliged to provide him or her with work. Types of Termination Termination During Probation An employee on probation can be terminated in the same manner as any other employee with the difference that a lesser period of notice may apply. During the first month of the probationary period, the employment can be terminated without notice or payment in lieu, and during subsequent months, the length of notice required is not less than seven days. Expiry of A Fixed Term Contract A fixed term contract terminates automatically at the end of its term without the need for any notice to be given by either party. A contract may also be stated to terminate at the completion of the assigned task. Termination with Notice The Employment Ordinance provides that each party has a statutory right to terminate a contract of employment, where the employee has worked under a continuous contract (i.e., worked for at least 18 hours in each of four consecutive weeks), by giving notice to the other, either orally or in writing. For a contract which is deemed to be for one month and renewable from month to month, the notice period shall be that specified in the contract, but it must not be less than seven days. If the contract does not specify any notice period, the notice period must not be less than one month. In any other case, the notice period shall not be less than seven days. Periods of statutory annual leave and maternity leave should not be counted towards the length of notice required to terminate the contract of employment. Payment in Lieu of Notice Termination may take immediate effect without notice if the terminating party makes a payment in lieu of the notice required. This is a statutory right of both employer and employee. An exception to the payment in lieu requirement is when an employee reasonably fears physical danger by violence or disease, if he or she has been employed for at least five years and has a medical certificate to the effect that he or she is permanently unfit for his or her work, if he or she is subject to ill treatment by his or her employer, or if there are grounds on which an employee would be entitled to terminate the contract under common law. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Employment Laws in Hong Kong 173 Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Summary Dismissal Employers have a statutory right to terminate an employment contract without notice or payment in lieu if an employee wilfully disobeys a lawful or reasonable order, misbehaves in such a way as to interfere with the due discharge of his or her duties, is guilty of fraud or dishonesty, or is habitually neglectful in his or her duties. Deemed Termination By Employer An employee may terminate the contract without notice or payment in lieu if any wages are not paid within one month from the day on which they become due under the Employment Ordinance. The contract shall be deemed to be terminated by the employer and the employer shall be deemed to have agreed to pay to the employee a sum equal to the amount of wages which would have accrued during the notice period. Redundancy and Pay-Off Where an employee who has been employed for a period of not less than 24 months is dismissed by reason of redundancy or lay-off, he or she is entitled to a severance payment. Dismissal by reason of redundancy is dismissal by the employer attributable wholly or mainly to one of the following facts: • The business for the purposes of which the employee was employed is to cease. • The business in the place where the employee was employed is to cease. • The need for the employee’s particular kind of work has ceased or diminished, or is expected to cease or diminish. • The need for the employee’s kind of work in the place where he or she was employed has ceased or diminished, or is expected to cease or diminish. An employee is presumed to be dismissed by reason of redundancy unless the employer proves otherwise, thereby entitling such employee to statutory severance pay if he or she has more than two years of continuous service. Where an employee is employed under a contract on which the remuneration depends on his or her being given work to do, such employee is taken to be laid off if the total number of days on which he or she is not given work, and not given wages in lieu, is more than half of the total number of normal working days in any period of four consecutive weeks, or more than one-third of the total number of normal working days in any period of 26 consecutive weeks. Transfer of Business If an employer is undergoing a merger or acquisition, some staff may be made redundant, while others may be transferred to the new company. If an employee is to transfer with a business, there is technically a termination of the contract of employment with the transferor of the business followed by a new contract of employment with the transferee. A transferor employer may avoid making a severance payment on the transfer of the business if: EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY 174 Brian van Langenberg and Fiona Loughrey, Simmons & Simmons • Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. • • The transferor employer terminates the employment of an employee either by serving the requisite notice or making a payment in lieu. Not less than seven days before the date of termination of employment with the transferor, the transferee makes an offer of employment on terms which either are not different from those on which the employee is employed by the transferor employer or, if different, on terms no less favourable to the employee, and constitute an offer of suitable employment. The new employment commences immediately on the termination of employment with the transferor employer, and the employee unreasonably refuses to take on the re-engagement. Termination by Operation of Law A contract of employment will be terminated upon an employer’s insolvency, bankruptcy, or death. A contract of employment may also be terminated when external events make it impossible for the employment to continue, or the employment is rendered illegal by any rule of law. Restrictions on Termination An employer cannot terminate the employment of an employee either by notice or payment in lieu if that employee: • has given notice to her employer of her pregnancy. Her contract cannot be terminated until she returns to work from maternity leave (an exception is where termination is by reason other than pregnancy during any probationary period not exceeding 12 weeks, or during the first 12 weeks of any probationary period). • is on statutory sick leave where sickness allowance is payable. • co-operates in an investigation of his or her employer, is involved in trade union activity, or serves jury duty. • has suffered incapacity within the meaning of the Employees’ Compensation Ordinance, before resolution of the appropriate claim, unless specific approval of the Commissioner is obtained. Entitlements on Termination Where a contract of employment is terminated, the employee is entitled to all wages outstanding as at the date of termination, as well as annual leave pay for leave which has accrued at the time of termination. A proportional end-of-year payment must also be made where an end-of-year payment is payable under the contract of employment. If the employee was employed for two years and was dismissed by reason of redundancy or lay-off, the employee may be entitled to a statutory severance payment. If the employee was not dismissed by reason of redundancy or lay-off but was employed for five years, he or she may be entitled to a statutory long-service payment. Alternatively, if the employee, after five years of service, terminates his or her contract of employment for reasons of permanent incapacity, having reached the age of 65, or dies, a statutory long-service payment will also be due. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Employment Laws in Hong Kong 175 Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. The payments must be made as soon as practicable but no later than seven days after the termination (except in the case of statutory severance payment). Serverance Payments and Long-Service Payments Statutory severance payments and long-service payments are calculated using the same formula: • In the case of an employee paid monthly, as two-thirds of his or her last full month’s wages, or two-thirds of HK$22,500, whichever is less. • In all other cases, as 18 days’ wages based on any 18 days chosen by the employee and occurring during his or her last 30 normal working days, or two-thirds of HK$22,500, whichever is less. The payments are calculated for every year (pro-rata in respect of an incomplete year) of employment. The above amount is capped at HK$390,000. The amount of any statutory severance payment or long-service payment is reduced by any contractual gratuity payable to the employee based on his or her length of service, or any benefit payable to or being held on behalf of the employee under a retirement scheme (including any MPF scheme or ORSO) which represents the value of the employer’s contributions to the scheme. An employee is taken to be dismissed if: • He or she is terminated by the employer other than by way of summary dismissal. • His or her fixed term of employment expires without being renewed. • The employee himself or herself terminates the contract on any ground which would entitle him or her to do so under common law. Unreasonable Dismissals or Variations Without a Valid Reason Unlike some other common law jurisdictions, Hong Kong does not have a concept of unfair dismissal. The closest equivalent is that of unreasonable dismissal. An employee may claim remedies if he or she was employed under a continuous contract for a period of not less than 24 months and, because the employer intended to extinguish or reduce any right, benefit, or protection conferred or to be conferred upon the employee by the Employment Ordinance, the employee was dismissed or the terms of his or her contract of employment were varied. An employer will be deemed to have the requisite intention unless he can show a “valid reason” for the dismissal or variation. Valid reasons include: • A reason related to the conduct of the employee. • A reason related to the capability or qualification of the employee for performing work of the kind which he or she was employed by the employer to do. • That the employee was redundant, or other genuine operational requirements of the business. • That the employee could not continue to work in the position which he or she held without contravention of the law (either on his or her part or on that of the employer). • Some other reason of substance warranting the dismissal. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 176 Brian van Langenberg and Fiona Loughrey, Simmons & Simmons An employee who has been dismissed or whose contract terms have been varied without a valid reason will not be entitled to any remedies if he or she unreasonably refuses an offer from the employer or an associated company, or a new owner in the case of a transfer of business, to renew the contract of employment or to be re-engaged on the same terms, or on suitable and no less favourable terms. Claims on these grounds, which was introduced in 1997, have been few. Unless an employer has breached any statutory prohibition on termination (see above), or has not paid out all statutory and contractual entitlements on termination there is nothing else that can be claimed (the Labour Tribunal has the power to order reinstatement or reengagement, but only if both parties agree — see below). In this respect, these provisions could be described as toothless. Remedies If an employer is unable to prove any valid reason for dismissing an employee or varying the contract terms, a claim may arise under the Employment Ordinance for reinstatement, re-engagement, or a terminal payment. If an employee was dismissed in circumstances prohibited under the Employment Ordinance, additional compensation may be awarded. The Labour Tribunal would first consider whether to make an order for reinstatement, and if not, it would then consider whether to make an order for re-engagement. Reinstatement means that the employee is to be treated as if he or she had not been dismissed, on terms specified by the Labour Tribunal. Re-engagement means that the employee must be engaged by the employer, a successor of the employer, or an associated company in an employment on terms comparable to his or her original terms of employment. The Labour Tribunal will also specify terms of the re-engagement in its order. The consent of both the employer and employee to any order for reinstatement or reengagement is required. If either party does not consent, or such an order is considered inappropriate, the employee may be entitled to a terminal payment. (Note however that the Equal Opportunities Commission has the power to order reinstatement in relation to a discrimination or harassment claim, although no such order has been made to date.) Terminal payments may include wages and any other payments due to the employee under the contract of employment, and statutory entitlements under the Employment Ordinance to which the employee is entitled on dismissal and has not been paid, and/or might reasonably expect to be entitled upon dismissal had he or she been allowed to continue in employment to attain the qualifying length of service required for the entitlement under the Employment Ordinance. The entitlement would be calculated pro-rata to the actual length of service of the employee. In a case where an employee is dismissed without valid reason and in contravention of any of the statutory restrictions as discussed above, if no order of reinstatement or reengagement is made, regardless of whether a terminal payment was made, he or she may be entitled to an award of compensation of up to HK$150,000. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Employment Laws in Hong Kong 177 Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Employment Disputes In the event that an employment dispute arises, the Labour Tribunal has exclusive jurisdiction to hear claims involving a sum of money for breach of employment contract or the Employment Ordinance. However, if the employment dispute involves an amount not exceeding HK$8,000, the claim must be dealt with by the Minor Employment Claims Adjudication Board. Where the employee has suffered injuries for which the employer is liable, the employee may file a claim at the District Court or the Court of First Instance of the High Court. Nonetheless, the Labour Tribunal only has jurisdiction to order monetary awards; where other remedies such as injunctions are sought, the claim must be heard by the courts. If a claim is brought to the Labour Tribunal but the Labour Tribunal considers that, in view of the size of the claim, the importance of the subject matter, the element of public interest, or the complexity of the legal issues, it is more appropriate to be heard by the courts, the Labour Tribunal may at any stage of the hearing transfer the case to the District Court or Court of First Instance. Parties to a dispute are usually encouraged to settle the dispute through conciliation meetings both at the Labour Department and Labour Tribunal. The Labour Tribunal can only hear a claim when a conciliation certificate is filed. The hearings are conducted informally, without legal representation, and normally public access is permitted. Figure 1 illustrates the usual process for resolving employment disputes at the Labour Tribunal. HR Management Issues Every employee in Hong Kong has the right to be or become a member or official of a registered employees’ union, to take part in the activities of the union at any appropriate time, and to receive protection from termination or discrimination as a result of taking part in union activities. Notwithstanding these rights and protections, membership in trade unions is relatively low. Even in workplaces where trade unions are present, collective bargaining is near non-existent and joint consultation rarely occurs. On the other hand, large organizations or public bodies in Hong Kong have comprehensive policies and procedures with regard to the Employment Ordinance, discrimination, and harassment, and actively promote diversity and respect within the workplace. They understand their obligations with respect to investigating complaints of discrimination and harassment. Also, they have dispute resolution procedures which are used to address, and hopefully resolve, disputes or grievances internally. Our observations, however, reveal that HR professionals do not always play an active role in issues related to employment law and industrial relations. Indeed, effective HR compliance programmes need to be integrated into business strategies and given more than just lipservice. Compliance has to start at the top and trickle down to all levels, in large and small companies alike, so that everyone understands their rights and obligations. Some ways in which HR professionals could enhance their roles in the workplace in terms of legal compliance include: EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY 178 Brian van Langenberg and Fiona Loughrey, Simmons & Simmons Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Conciliation by the Labour Relations Division of the Labour Department if not settled Dispute settled Parties sign terms of settlement Claim settled, parties sign terms of settlement for approval by presiding officer Labour Tribunal issues award/ order to parties File a claim at the Labour Tribunal Tribunal officer interviews defendant and witnesses, prepares summary of facts Presiding officer conducts hearing if necessary if not settled Labour Tribunal transfer case to District Court or Court of First Instance Presiding officer adjudicates and gives judgment Appeal to District Court or Court of First Instance Appeal to Court of Appeal Figure 1 Process for Resolving Employment Disputes 1. Developing professional knowledge — the employment laws are increasingly sophisticated and complex. HR professionals play an important role in advising their employers of the importance of legal compliance, therefore, they should have adequate knowledge in this area. Also, as the law is constantly changing, HR professionals must stay up-to-date so that they can establish timely and appropriate policies in the workplace. HRM students should be well equipped with such knowledge before their graduation, as this would provide a competitive advantage for them in their job search. Training courses are available in many institutes, e.g., HKIHRM and various extramural studies bodies in Hong Kong. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Employment Laws in Hong Kong 179 2. Adopting a consultative/co-ordinating role — HR staff should have the skills and experience to play a consultative role that supports both employers and employees in complying with relevant law and regulations in Hong Kong. HR staff should also coordinate promotional activities (e.g., organizing training courses) to provide adequate knowledge of employment law throughout the organization. 3. Developing proper documentation and distributing a HR policy manual — as discussed above, the organization’s handbook is an important source for ensuring workplace compliance with the employment law. HR should be responsible for creating the handbook and updating it from time to time. They should ensure that their employers and employees understand it well and are able to comply with it. A copy of the written policies or employee handbook should be given to each employee upon commencement of duty. Employees should each be asked to sign a copy as well as read and understand it thoroughly. HR should also note that documentation is critical. A lack of documentation can leave the company vulnerable to non-compliance claims. Therefore, HR should advise managers to document all key decisions, including personnel, wage and sick leave records, performance appraisal records, written policies, and disciplinary records. 4. Acting as a change agent — nowadays, HRM practices such as flexi-time and outsourcing are commonly adopted in companies. HR should be able to advise employers on the HR and legal implications of these practices. At the same time, they must ensure that both employers and employees are protected under the law when engaging in such practices. 5. Acting as an employee advocate by providing effective communication channels — it is fairly common that large companies or public organizations in Hong Kong form consultative committees or provide grievance handling procedures to address employees’ concerns and disputes. But this should not be restricted to large firms. HR should be more active in the field of employee relations by facilitating the formation of such committees and fostering more channels of communication regardless of the size or type of organization they are working within. HR professionals can simultaneously educate their employers that better communication with employees will be conducive to the achievement of better business results and also improve their standing in the eyes of employees as they serve the role of employee advocate. Conclusion Like many laws in Hong Kong, employment laws originally evolved from the common law of England. Although workers’ rights legislation in Hong Kong has not been developed to the same extent as in the United Kingdom or other leading industrialised nations, the final years of British government prior to the resumption of sovereignty over Hong Kong by the People’s Republic of China in 1997 witnessed a very significant increase in employment protection and employee benefits. In the lead up to handover of sovereignty to China, several significant pieces of legislation were enacted, including the Sex Discrimination Ordinance, Disability Discrimination Ordinance, Family Status Discrimination Ordinance (see Chapter 10) and the Personal Data (Privacy) Ordinance. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 180 Brian van Langenberg and Fiona Loughrey, Simmons & Simmons The pace of legislative change in employment law has slowed since 1997 but there are still areas which have been, and are currently being, expanded to bring Hong Kong in line with international standards — for instance, the newly enacted Race Discrimination Ordinance. Since the handover, there has also been a steady relaxation of the laws governing the number of people from mainland China allowed to reside and work in Hong Kong. In 2006, a majority of mainland immigrants were engaged in lower-skilled jobs, mainly as service workers, shop sales workers, and workers in elementary occupations. However, with the introduction of the Quality Migrant Admission Scheme in June 2006, which allows talented people from the mainland who meet certain criteria to settle in Hong Kong without having to secure an offer of local employment beforehand, Hong Kong has observed an influx of higher-skilled labour from the mainland. Subsequent amendments have been made that have further relaxed the requirements set out in this scheme. This has led to an increased supply of labour in the job market and a corresponding increase in the competition for jobs. Also noteworthy is that whereas Hong Kong passed and interpreted laws in accordance with the developments of case laws in the United Kingdom in the past, since 1997, it has increasingly looked to jurisdictions such as Australia and New Zealand, and even to the European Union, for its lead. An example of this is the tendency of the courts to interpret anti-discrimination legislation according to Australian case law, probably because the legislation is closely based on the Australian federal anti-discrimination legislation. The trend that has emerged in other jurisdictions, such as the United Kingdom and Australia, towards part-time work and flexible working arrangements has not occurred in Hong Kong. Part-time work and flexible working arrangements are relatively uncommon, probably due to the availability and relative affordability of childcare. Furthermore, unlike many other jurisdictions, the current legislation does not generally provide for minimum wage, statutory restrictions on working hours, or overtime payments. In summary, the current legislation can be viewed as more “employer-friendly” and offers limited protection for employees. On the economic front, since the worsening financial and economic conditions globally in 2008 has led to employers becoming more cautious about staffing. There are early signs of weakening labour demand and downward pressure on earnings and wages in the third quarter of 2008. * * * * * EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Employment Laws in Hong Kong 181 Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Review Questions 1. What are the sources of Hong Kong’s employment law? 2. Identify the rights and obligations of the employer and employee under the Employment Ordinance. 3. Identify the major scope and common terms of an employment contract. 4. What is the definition of wages in Hong Kong? Under what conditions can an employer make deductions from an employee’s wages? 5. There are criticisms that the Employment Ordinance is dated. Identify three controversial areas of the Employment Ordinance. From your point of view, argue for or against the revision of these terms and conditions. 6. Discuss the principles of the Personal Data (Privacy) Ordinance. What should HR professionals observe during recruitment and selection? 7. Describe the official channels for resolving disputes in Hong Kong. 8. Do you think HR has played a sufficient role in the workplace in enforcing employment law and promoting industrial relations in your organization? What kinds of help can HR offer to employees? EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 10 Equal Opportunities Laws in Hong Kong Alex Papadopolous Introduction to Equal Opportunities The concept of equal opportunities in employment is based on the premise that there should be a level playing field for all persons in the workplace, regardless of their race, gender, physical and/or other characteristic or attribute. The protection against all forms of discrimination is enshrined in the Basic Law of Hong Kong and is more fully regulated by Hong Kong’s anti-discrimination legislation: the Sex Discrimination Ordinance (SDO), the Disability Discrimination Ordinance (DDO) and the Family Status Discrimination Ordinance (FSDO) and the Race Discrimination Ordinance (RDO). These ordinances cover the grounds of sex, marital status, pregnancy; disability; family status; and race (meaning a person’s race, colour, descent, or national or ethnic origin) respectively, and also protect against sexual, disability and racial harassment. The consequence of these laws for human resources professionals in Hong Kong is twofold: (1) they must ensure that their organizational practices comply with the various statutory obligations; and that (2) their policies and procedures are in alignment with the various provisions. Otherwise they run the risk of costly and lengthy legal proceedings if they fall foul of the law. The purpose of this chapter is to provide human resource professionals with an understanding of the legal framework of Hong Kong’s anti-discrimination laws and how they affect organizations. It provides a basic reference tool for practitioners who wish to gain an appreciation of how equal opportunities laws have impact on staff recruitment, selection, promotion, transfer, terms and conditions of employment, redundancy and dismissal, and the do’s and don’ts of human resource management in that context. The Legal Framework The SDO protects against discrimination on the grounds of sex, marital status and pregnancy. It also protects against sexual harassment. The DDO protects against discrimination on the grounds of disability, disability harassment and vilification. Also, the FSDO protects EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 184 Alex Papadopolous against discrimination on the ground of family status, while the RDO protects against discrimination based on the grounds of race. The employment related provisions of the SDO and the DDO became fully operational on 20 December 1996, whilst the employment related provisions of the FSDO became operational on 21 November 1997. The RDO was gazetted in July 2008 and will probably become fully effective in 2009. Since then, employers have not been allowed to discriminate on any of the protected grounds in the field of employment. Similarly, employment agencies have also been required to comply with the anti-discrimination laws. Employment is defined in all these pieces of legislation to include employment under a contract of service or apprenticeship or a contract personally to do any work. Under the SDO, DDO, FSDO or RDO, it doesn’t matter whether a person is working full time, part-time or is a casual employee. The definition also extends to persons who are self employed but who agree to personally to undertake work. Although contract workers, partners in firms, barristers and persons undertaking vocational training do not fall within the definition of employment, they are nevertheless also protected under the legislation. All employers in Hong Kong are bound by the legislation. Acts committed outside Hong Kong also fall within the ambit of the legislation, where they relate to employees who work wholly or mainly in Hong Kong. This means, for example, that an act of sexual harassment committed by one employee against another employee whilst on a conference overseas, or at an after-hour work-related function, is nonetheless caught by the provisions of the SDO if the employees work wholly or mainly in Hong Kong. The employer in such a situation may be held vicariously liable, notwithstanding the act occurred outside Hong Kong or outside the actual workplace. The regulatory regime set up by the three Ordinances is administered by the Equal Opportunities Commission (EOC), a corporate entity capable of suing and being sued. Unlawful acts of discrimination and harassment under the Ordinances give rise to civil liability. The EOC has statutory powers to receive complaints of alleged unlawful acts from aggrieved persons (or their representatives) and to investigate them. It also has power to try and resolve disputes through conciliation and give legal assistance to complainants whose disputes have not conciliated. Codes of practice issued by the EOC with recommendations and guidelines as to best practices in the field of employment carry weight in legal proceedings. Direct discrimination occurs when the treatment of a person occurs on the ground of the particular attribute or characteristic of that person (e.g., pregnancy), the treatment is less favourable than the way in which a person without that attribute or characteristic is or would be treated (e.g., a person who is not pregnant), and the relevant circumstances of the person with whom the comparison is being made are the same as, or not materially different, than the person discriminated against. Stereotypical assumptions and prejudices about persons with particular characteristics or attributes may also constitute direct discrimination. For example, not interviewing a person in a wheelchair because of an assumption that it would be “too hard” to physically accommodate that disability could amount to unlawful direct discrimination (see the court case in Box 1). Indirect discrimination occurs when a seemingly neutral condition or requirement is applied equally to all persons, but in practice results in a smaller proportion of persons EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Equal Opportunities Laws in Hong Kong 185 with the attribute being able to comply with it than the proportion of persons without the attribute who can comply with it, and the requirement or condition is not justifiable in the circumstances. For example, requiring all employees to be able to relocate at short notice may seem a neutral condition of employment on the face of it, but may in practice amount to indirect discrimination if it results in a smaller proportion of women with children or persons with family status being able to comply with it than persons without children or without family status. If the condition is not justifiable in the circumstances, it would be unlawful. Box 1 Siu Kai Yuen v Maria College • • • • The Plaintiff was a teacher at the school for many years and was diagnosed with cancer. His employment was terminated, on the basis that he was unable to comply with the requirement in his employment contract which stated he had to report for work at the start of school term. The court found that, although the school’s objective to ensure continuity of the education process, with little disruption to teaching, was legitimate, there were other options available, such as appointment of a substitute teacher. It was held that the requirement was, therefore, unjustifiable. The protection against discriminatory treatment in the field of employment extends to protection against victimization. The law makes it clear that you cannot victimize (i.e., treat less favourably) persons who have taken some form of action in connection with the anti-discrimination legislation (see the court case in Box 2). For example, an employee with an otherwise good performance record who complains of sexual harassment and thereafter receives a poor performance review may be able to show victimization if there is no substance to the poor performance review. Similarly, where a colleague gives evidence in support of that employee’s allegation of harassment and the colleague is thereafter denied promotion, the colleague can complain of victimization. Box 2 Chang Ying Kwan v Wyeth (H.K.) Ltd. • • • • • The Plaintiff worked as a product supervisor. When she gave notice of her pregnancy to her employer, she was asked to resign or accept demotion. She complained to the EOC of pregnancy discrimination. Although her employer subsequently withdrew the request for her resignation, the Plaintiff did not withdraw her complaint to the EOC. As a result, the Plaintiff was subjected to a campaign of victimization by her superiors. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY 186 Alex Papadopolous Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. • • • • • • • The acts of victimization included refusal of salary increases, imposition of reporting requirements and undue work pressure. Upon completion of her maternity leave, the Plaintiff resigned and claimed victimization and constructive dismissal, in addition to pregnancy discrimination. The employer denied the allegations, claiming she was a “difficult” employee whose performance was unsatisfactory. The court found that even if the Plaintiff had been a difficult employee as claimed, the treatment she complained of commenced after her notice of pregnancy and after her complaint to the EOC. It was held that, as long as one of the reasons for her treatment was her pregnancy, that was sufficient to prove discrimination. Accordingly, the employer was found liable for unlawful pregnancy discrimination and victimization. The court also held that the Plaintiff was entitled to regard herself as having been constructively dismissed. All these ordinances contain exceptions to discrimination in the field of employment, including Genuine Occupational Qualifications (GOQ’s) as exceptions to sex and disability discrimination where persons of a particular sex or without a disability are required for certain jobs. GOQ’s are set out in the SDO, DDO and RDO. The DDO also contains an exception to disability discrimination where the person is unable to perform the inherent requirements of the job or, in order to do so, requires the provision of services or facilities that impose an unjustifiable hardship on the employer who has to provide them. The inherent requirements of a job are not the job duties or responsibilities; they are something more fundamental or intrinsic to the nature of the job itself. Employers who wish to rely on the inherent requirement exception have to first, ask whether there are any services or facilities they could provide; and second, if there are, to prove that it would impose an unjustifiable hardship to provide them. For example, an inherent requirement of the job for a computer operator is the ability to use a computer. A visually impaired person may be able to use a computer if provided with certain software, but the provision of that software may impose an unjustifiable hardship on the employer if it is very expensive or difficult to obtain. The relevant considerations for what constitutes unjustifiable hardship under the DDO include the reasonableness of any accommodation to be made, the nature of the benefit to be received by the employee as well as the nature of the detriment to be suffered by the employer, the effect of the disability concerned and the financial circumstances and consequences. Another important exception in the field of employment to look out for is the exception relating to special measures. The anti-discrimination laws provide that any act that is reasonably intended to ensure that persons of a particular attribute (i.e., sex, marital status, pregnancy, disability, family status or race) have access to equal opportunities as persons without that attribute is not unlawful. Neither is any act which is reasonably intended to provide such persons with grants, benefits or programmes to meet their special needs. This means that it would not amount to unlawful sex discrimination if an employer decided EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Equal Opportunities Laws in Hong Kong 187 to introduce special training programmes for its female employees, if women in the organization did not appear to be advancing to the ranks of management and such training would help them to have the same opportunities for promotion as the male employees. Special measures, however, should be temporary in nature and designed to achieve a level playing field. Positive discrimination remains unlawful. One of the key risks of the legislation is that employers may be held vicariously liable for the actions or behaviours of their employees. Knowledge and motives are irrelevant. Furthermore, it does not matter whether there may be other valid reasons or explanations for doing a particular act. The legislation says that, as long as one of the reasons for the discriminatory treatment is on the ground of a person’s attribute, the act is deemed to be unlawful. An employer’s sole defense to vicarious liability is to show that all reasonably practicable steps were taken to prevent the unlawful act from occurring. The implications for human resource professionals of the reach of the legislation are vast. On the one hand, they have a responsibility to ensure that policies, practices and procedures are sufficient from a compliance perspective, and on the other, they are tasked with ensuring that these policies, practices and procedures are administered and implemented in a manner that can withstand challenge. The cost to an organization of human resource management that does not reflect the principles of equal opportunities can be high. The Pre-Employment Phase Advertisements for Jobs Prior to the enactment of the anti-discrimination ordinances, it was not uncommon in Hong Kong to see advertisements for “young, pretty secretaries” or “female sales assistants” in the employment classifieds. Job advertisements which discriminate on the given grounds, or show an intention to discriminate, are now unlawful and both the employer (or employment agency) and the publisher may be liable. This means that employers cannot specify a particular sex for a particular job. Unless the employer is able to rely on a specific exception in the SDO, the employer cannot restrict the job advertisement to one sex. An example of an advertisement where a GOQ may apply as an exception is found in Box 3. Box 3 Female Attendant Required for Ladies’ Gym Duties: • Keep changing rooms clean and tidy • Provide clients with toiletries • Replenish and remove towels as required • Provide clients with refreshments Applications should be made to Human Resource Manager, City Gym, Level 4, NoName Plaza, Central, Hong Kong. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 188 Alex Papadopolous The law requires that all arrangements made in the context of employment of applicants for jobs should not discriminate. Arrangements are not limited to advertisements, but also include the interview and selection processes and how applicants are shortlisted for interview. Interviewing and Selecting Applicants We have already read in Chapter 4 about the need for consistent and job-related selection criteria in the interview process. It is advisable that such consistent and relevant selection criteria should be adopted from the outset, when the shortlisting of candidates for interview takes place, in order to avoid any suggestion of unlawful discrimination by applicants who may believe they were not selected for interview based on the given grounds. Consistent and relevant selection criteria also help to prevent the making of decisions based on stereotypical assumptions about a person’s ability to do the job, which could lead to discrimination. For example, women of a certain age not shortlisting for interview because of concern of taking time off to have children is stereotyping that it could lead to an allegation of unlawful sex discrimination. Once applicants have been chosen for interview, the process by which they are interviewed should also be free of discriminatory elements. It should not be assumed that all candidates may be able to undertake written tests or physically get to the place of interview. A person with a hearing disability may have difficulty if the interview is conducted in a large room and he is seated far away from the interviewer(s). A person with mobility disability may have difficulty getting to the venue if she has to climb stairs to get to there. It is both appropriate and advisable that, once the applicants have been informed of the interview, they are asked whether they require any special accommodation or arrangements to be made with regard to the interview. This is particularly relevant to persons with a disability, but may also be relevant to women with young children or persons with family status if the interview arrangements are outside normal working hours. No matter how short or long the interview is, no matter how simple or complex the hiring process may be, it is important to ensure that the decision criteria are consistent with respect to all candidates and that only relevant questions are asked in the course of the interview. Questions which are not relevant to the job, such as questions about a candidate’s marital or family status, may lead to an allegation of unlawful discrimination if the candidate is unsuccessful. So may questions based on stereotypical assumptions about the candidate’s ability to do the job, such as asking women whether they consider themselves able to manage male subordinates. Medical Examinations and Requests for Medical Information It used to be a common practice for many employers in Hong Kong to require applicants to undertake and pass a medical examination prior to an offer of employment. In some cases, it went hand in hand with the selection process. The DDO states that it is unlawful for employers to ask for medical information if it is for the purpose of committing unlawful discrimination. Unless there is a genuine need for the applicant to be physically fit or free of disability, which falls within one of the exceptions set out in the DDO, medical EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Equal Opportunities Laws in Hong Kong 189 Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. examinations and requests for medical information should follow the job offer and should be only for the purpose of arranging medical insurance if that is provided by the employer and required by the insurer (see the court case in Box 4). Box 4 K, Y & W v Secretary for Justice • • • • • • • • K and Y applied for jobs as fireman and ambulance driver in the Fire Services Department. W applied for a job as a Customs Officer with the Customs & Excise Department. All three young men were physically fit, but were deemed to have failed their medical tests. Two of the Plaintiffs each had a parent with schizophrenia, but although the third Plaintiff’s parent was considered to have had schizophrenia, subsequent evidence called at trial suggested he had probably suffered from a brain tumour which caused paranoia. All three Plaintiffs were rejected from employment. The disciplinary services claimed that their blanket policy of no recruitment of applicants with a family history of mental illness was necessary to protect the public safety (and that “public safety” was an inherent requirement of each job). The court found that, although public safety was an inherent requirement of each job, there had to be “real risk” to public safety and the medical tests undertaken by the Plaintiffs did not seek to ascertain what that risk actually was. It was held by the court that the blanket policy as applied to each Plaintiff amounted to unlawful discrimination on the ground of disability. The Employment Phase Terms and Conditions of Employment All anti-discrimination ordinances make it unlawful for employers to discriminate in respect of the terms on which they offer persons employment, as well as the way in which they provide access to opportunities for promotion, transfer or training, or to any other benefits, facilities or services. Human resource professionals should ensure that there is no discriminatory treatment of persons in respect of their terms of employment, the benefits they are offered and the way they are selected for promotion, transfer, training or redundancy. Any detriment suffered by an employee could amount to unlawful discrimination if that detriment is brought about by discriminatory treatment. The FSDO provides an exception regarding the provision of housing, education, airconditioning, passage and baggage allowance to persons of different marital status and it also provides an exception regarding the extension of benefits, facilities and services to immediate family members. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 190 Alex Papadopolous The SDO and the DDO also provide an exception to discriminatory treatment in the provision of insurance benefits, as long as the discriminatory treatment is based on an assessment of risk calculated by reference to actuarial or other data from a source on which it is reasonable to rely, and the discriminatory treatment is reasonable in all the circumstances. Employers who rely on risk assessments from insurers to deny medical or other insurance benefits to employees, or to differentiate in the cover, should question the risk assessments by the insurers if they wish to rely on this exception. The RDO also provide exceptions on some cases such as training for skills to be used outside Hong Kong, employment of persons for special knowledge and skills and existing local and overseas employment terms, etc. Dress Codes The imposition of dress codes on employees may, in certain circumstances, amount to unlawful discrimination in the terms of employment. Human resource policies that seek to restrict the type of dress, hair or jewellery worn by employees, by reference to sex, may be in breach of the SDO. Although the case law on this issue is not determinative, it is advisable that human resource professionals take care when drafting dress code policies to ensure that any restrictions are objective, fair and balanced and not based on any stereotypical assumptions about the way men and women are supposed to dress. Although Hong Kong does not have any gender re-assignment laws or any legal protection against discrimination based on gender expression or transgender issues, human resource professionals should note that gender dysphoria is a disability within the definition of the DDO, and thus any dress code which directly or indirectly discriminates against persons with this disability may be unlawful under the DDO. Flexible Work Arrangements The issue of flexible work arrangements is a topical one in Hong Kong and relevant in the context of equal opportunities, notwithstanding that the equal opportunities laws do not impose any obligation on employers to introduce flexible work policies. Apart from the fact that a flexible workplace is generally more conducive to a happy and productive (and more motivated) workforce, the relevance arises in the context of work hours, rosters and shifts. Any condition or requirement that persons work certain hours or days could amount to unlawful indirect discrimination, unless such condition or requirement can be justified. The onus would be on the employer to justify the requirement or condition. Scenarios A and B in Box 5 illustrate potential claims of unlawful discrimination which could be avoided through flexible work arrangements. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Equal Opportunities Laws in Hong Kong 191 Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Box 5 Scenario A Scenario B • Anna works as a nurse in a clinic. • Jason works for an engineering company. • The new roster has her working • Approximately 20% of his duties on Sundays. involve doing research and design • Anna has a young child and no • Jason has a sick father at home. home help on Sundays. • Anna asks that she be accommodated • Jason asks that he be permitted to on the ground of her family status, work from home one day a week, in order to be at home on Sundays on the ground of his family status. to look after her child. • She is told the roster cannot be • He is told the job involves full changed to accommodate her. time attendance at work. In both the above scenarios, if Anna and Jason can show that there is a considerably smaller proportion of persons with family status (or their particular status) that can comply with the requirement or condition imposed by their respective employers (in Anna’s case, to work on Sundays; in Jason’s case, to work from the office) than persons without family status (or the relevant status), there would be prima facie discrimination. It would be up to the employers to show justification for the requirement that Anna work on Sundays and Jason work from the office. In Anna’s case, the issue is whether the clinic’s staffing requirements for Sundays can be met. The employer may well be able to accede to her request and still fulfill the clinic’s staffing requirements. In Jason’s case, his employer would have to justify why Jason is required to attend the office daily, if it can be demonstrated that Jason can undertake his research and design duties while at home one day per week. The important thing for human resource professionals to bear in mind is that they should not apply a blanket policy to request for flexible work arrangements. Each request should be considered on its own merits and in the context of the particular situation. It is not sufficient for an employer to point to administrative inconvenience, or deny a request on the basis that other employees may ask for the same consideration. The concept of justifiability envisages a balancing exercise of the reasonable needs of both the employer and the employee. Termination Termination of employment under the anti-discrimination laws does not only occur when a person is dismissed by the employer, but may also arise if that employee is subjected to detrimental treatment based on sex, marital status, pregnancy, disability, family status or race. The courts in Hong Kong recognize that employees who are exposed to such treatment may regard themselves as having been constructively dismissed and, therefore, entitled to any and all protections under the anti-discrimination legislation, including all available remedies. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 192 Alex Papadopolous Protection under the anti-discrimination laws is also available to persons who have been made redundant. If the selection for redundancy has been made (whether wholly or partly) based on an employee’s sex, marital status, pregnancy, disability, family status, or race, such termination could amount to unlawful discrimination. Stereotypical assumptions, such as males being the main breadwinners and married persons have families to look after, could result in unlawful discrimination. As with all policies and practices dealing with selection of staff, redundancy policies should be based on objective, open and transparent selection criteria free of discriminatory influences. Victimization As has already been discussed, unlawful victimization under the anti-discrimination laws is basically any form of retaliatory action as a result of someone having made a complaint (whether formal or informal) of discrimination or harassment, or someone having given or about to give evidence in respect of such a complaint. This type of retaliation is treated as unlawful discrimination under the SDO, DDO, FSDO and RDO. The relevance of victimization in human resource policies is not only in the context of employer liability, but also in the context of creating a “safe” environment for employees in which they feel comfortable and confident to raise or discuss issues of discrimination and/or harassment. An employer who does not address victimization will not be able to adequately deal with discrimination or harassment in the workplace. Policies, Practices & Procedures The anti-discrimination legislation provides that employers are liable for all acts of unlawful discrimination and harassment committed by their employees, as long as the unlawful acts are committed in the course of employment. These words do not incorporate some special legal test for employer liability, but are used in their everyday context. It does not matter whether the employer knew about the act or not, authorised it or not, or agreed with it or not. Employers will be held liable unless they can show that they took all reasonably practicable steps to prevent the unlawful acts from occurring. What does this mean in practical terms? It means that employers should, as a starting point, have policies and practices in place which make it clear that certain types of acts/ behaviours will not be tolerated in the workplace. Policies should address all phases of employment and should state the procedure or process to be followed for the making of complaints of discrimination and harassment. They should inform employees of how complaints will be handled and should also make clear what the consequences are with regard to conduct or behaviour which is found to have occurred. Employers who wish to rely on the defense that they took all reasonably practicable steps need to show more than mere introduction of the policies in the workplace. They also need to show proper implementation of, and training with respect to, such policies. Depending on the size of the organization, training should be carried out at all levels of the organization and should be an ongoing exercise. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Equal Opportunities Laws in Hong Kong 193 Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. The Post Employment Phase Reference Letters Although liability under the anti-discrimination laws does not ordinarily extend to unlawful acts of discrimination or harassment committed after the employment relationship has ended, case law provides an exception to certain post employment acts of victimization, such as the denial of a reference letter after the employee has ceased employment. This does not impose any obligation on an employer to provide reference letters in circumstances where the employer would not ordinarily provide them, but it does make an employer liable for unlawful discrimination if, say, a reference letter is denied to a former employee for reason that he/she complained of discrimination or harassment (see the court case in Box 6). Box 6 Chan Choi Yin Janice v Toppan Forms (H.K.) Ltd • • • • • • • • • • • • The Plaintiff was employed as an account manager. Following announcement of her pregnancy, management orchestrated a course of conduct to create a difficult work environment to force the Plaintiff to leave. She suffered a miscarriage, but subsequently became pregnant a second time. After she informed her supervisor she could not undertake physically strenuous work at a product fair, she received unfavourable remarks in her performance assessment. She was transferred without explanation, receiving less commissions than before, and her clients were taken away from her. Senior management put pressure on her and made disparaging remarks about her pregnancy. The course of conduct continued until after her return from maternity leave, when she was transferred against her will and demoted. The Plaintiff complained to the Labour Department and lodged a complaint of pregnancy discrimination with the EOC. She was then given a warning letter and told she would be made redundant and dismissed if she did not withdraw her complaint to the EOC. She was subsequently dismissed. After her dismissal she asked for, but was denied, a reference letter. In finding the employer liable, the court held that the dismissal and the failure to give a “fair” reference amounted to victimization. Other Forms of Victimization Employers and human resource professionals alike should note that, even though other forms of victimization occurring in the post employment phase might not be caught by the substantive provisions of the anti-discrimination legislation, such acts might nonetheless EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 194 Alex Papadopolous attract censure and punishment under the remedial provisions. The SDO, DDO, FSDO and RDO each provide for the award of punitive and exemplary damages to a claimant bringing legal proceedings, and there is no reason why a court would not take into account any post employment acts of victimization committed against such a claimant when making an award of damages (see the court case in Box 7). Box 7 Yuen Wai Han v South Elderly Affairs Ltd. • • • • • • The Plaintiff applied for a part-time job in a nursing home. She was pregnant and already had full time employment. During the interview, the director was impressed and offered her the full time post of a manager of the nursing home. After the Plaintiff had resigned from her existing employment, but prior to commencing her job with the Defendant, she was notified that she was no longer required, because another director did not want a pregnant manager. After the Plaintiff made a complaint to the EOC, the Defendant made a false report to the Police claiming that she had sought to obtain the job by deception (had lied about her credentials). In finding the Defendant liable for pregnancy discrimination, the court also found that the action of the Defendant in making the report to the Police compounded the wrongdoing and suffering of the Plaintiff and awarded the plaintiff punitive damages. Sexual Harassment Preventing Sexual Harassment in the Workplace Sexual harassment in the workplace is one of the most prevalent forms of discrimination in Hong Kong. Statistics kept by the EOC indicate that 102 written complaints of sexual harassment at work had been filed between 1 April 2006 and 31 July 2007 alone, and another 41 enquiries relating to sexual harassment at work had been made in the same period. The statistics also indicate that the number of cases is on the increase, though it is unclear whether this is due to increase in prevalence or due to increased awareness of sexual harassment issues in the general population. In a survey conducted in January 2007, 8.75% of the survey respondents replied that sexual harassment in the workplace happened “frequently”, while 36.64% of respondents replied it happened “occasionally”. When asked about the identity of the harassers, 21.35% of the respondents claimed it was by “bosses”, 21.88% claimed it was by customers, and 56.77% claimed it was by colleagues. Interestingly, over 20% of the respondents claimed that they themselves had been sexually harassed at work, and of those 13.25% were males. Only 6.06% of those who had been harassed had ever reported the incident to their EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Equal Opportunities Laws in Hong Kong 195 supervisors or relevant business unit. Reasons for not reporting incidents ranged from “Don’t want to create trouble or afraid of being teased” (10.98%), to “Afraid of affecting the working relationship” (19.51%), to “Didn’t take it as a serious matter” (62.2%). Respondents who did report the incidents also indicated that there was only one case in which the harasser was penalized and in 42.86% of the cases, there were no consequences to the harassers after reports of the incidents. What these responses indicate is a need for policies in the workplace which not only make it clear that sexual harassment will not be tolerated, but which also provide a mechanism for the handling of complaints in an environment in which employees feel secure. Incidents of sexual harassment in the workplace create conflict and have costly consequences for both employees and employers alike. Dealing with an incident after it has occurred does not address the root cause, nor does it alleviate the problem of time and money spent in resolving it. A pro-active approach is much more likely to prevent sexual harassment from occurring or developing in the workplace, but this requires management commitment, zero tolerance, implementation of relevant policies and procedures, ongoing training of employees at all levels and regular assessments or audits of the workplace. The challenge for human resource professionals is to find a balance between the need to properly deal with each and every allegation and the legitimate business needs of the organization. The first step is to ensure that the policy adequately defines what is meant by sexual harassment. The SDO encompasses two different forms of sexual harassment. One of the first forms of sexual harassment under the SDO is where the harasser makes an unwelcome sexual advance or an unwelcome request for sexual favours to another person, or engages in other unwelcome conduct of a sexual nature in relation to that other person, in circumstances in which a reasonable person would have anticipated that the other person would be offended, humiliated or intimidated. It is no defence to argue that the harassed person is being unreasonable, as it does not matter whether they are reasonable or not in their feelings. It is what a reasonable third person would have anticipated the harassed person would feel in all the circumstances that is relevant. As with other forms of tort action, so too with sexual harassment: you take the “victim” as you find them. Any policy dealing with sexual harassment in the workplace should — in plain language which is easy to understand — clearly set out the type of conduct that is deemed inappropriate and provide examples which will help employees to understand what is considered to be inappropriate behaviour in the workplace (see Box 8). Box 8 A. • • • • Unwelcome sexual conduct in relation to a person may include: Requests for sex Requests for romance Kissing Touching, groping EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY 196 Alex Papadopolous Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. • • Brushing up against the person Leering B. Sexually hostile work environment conduct may include: • • • • • • Sexual jokes and/or innuendo Explicit sexual talk or imagery Nude/semi-nude photos, posters Nude/semi-nude screensavers Pornography, pornographic materials Any one or more of the conduct in A The next step is to make sure that the policy includes a statement that expresses the company’s commitment to providing a workplace which is free of sexual harassment. Human resource practitioners may want to adapt the company’s policy to incorporate other forms of harassment as well, such as disability harassment, racial harassment, sexual orientation harassment and the like. Although the present law in Hong Kong only covers sexual, disability, and racial harassment, it might nevertheless be prudent for employers to expand the grounds of restricted behaviour to ensure less conflict in the workplace long term. As we have already discussed, effective policies and procedures provide a strong defense to legal claims of employer liability. What makes a sexual harassment policy effective? • Establish appropriate expectations for employees in terms of how they are expected to behave. • Allow complainants to know what to expect in terms of process and outcome before a complaint has been made. • Inform harassers of what to expect if a complaint is substantiated. • Offer a timely response to allegations and complaints. • Provide appropriate forms of redress. The EOC also recommends that sexual harassment policies should adopt effective complaint handling procedures to deal with the alleged conduct and provide a grievance mechanism for the resolution of complaints. Whether the organization has a dedicated person to deal with sexual harassment complaints, or whether complaints are made directly to the human resource department or manager, all complaints should be handled with sensitivity and confidentiality. An effective policy deals with both prevention and response, otherwise it will not be taken seriously. Investigation of Complaints The only way in which to determine whether harassment has occurred is to conduct an investigation. Unfortunately, the investigation of complaints in Hong Kong is all too often left to persons ill equipped to undertake them, either because they have not received EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Equal Opportunities Laws in Hong Kong 197 appropriate training in how to conduct an investigation or because they have confused the investigation process with disciplinary action. Whether it’s a HR professional or a manager who ultimately conducts the investigation, the most important things for investigators to note in the investigation of complaints of sexual harassment (or any other form of harassment or discrimination) are as follows: • The investigator should be familiar with all relevant company policies, practices and procedures. • The investigator should identify all relevant issues that need to be addressed in the investigation before starting. • The investigator should explain the process to the parties, as well as the issues under investigation. • Employees have the right to know all allegations made against them which are under investigation. • The investigator should not confuse the investigation process with disciplinary action. • The investigation must be fair and neutral. • The investigator should be impartial and unbiased. • There should be no conflict of interest between the investigator and any of the parties. • The investigator should have regard to due process and the rights of the parties. • The investigator should not ask leading questions or put words into people’s mouths. • The investigator should show empathy towards, and understanding of, people’s feelings. • The investigator should stick to the facts and relevant issues. • The investigator should not express personal views or make assumptions. • The investigator should maintain confidentiality. • Disclosure to third parties (including witnesses) should be on a “need to know” basis. At the conclusion of the investigation, it is advisable that a written report be prepared which sets out the issues and the evidence gathered during the investigation. The report should only refer to matters relevant to the investigation and the issues looked into. Any recommendations as to outcome may be included at the end of the report or in a separate document. Most organizations with policies dealing with the investigation of complaints will have a process to be followed regarding the submission of the report and any findings, as well as invocation of disciplinary action if considered appropriate. Policies Prohibiting Dating Between Employees Policies prohibiting dating between employees are difficult to monitor and maintain, despite their popularity with some employers. In Hong Kong, where men and women spend considerable hours at work, dating a colleague may be the only opportunity for romantic involvement for many employees. Policies which seek to prohibit such involvement run the risk of de-motivating employees and/or creating an environment of subterfuge if employees are dating or are romantically involved. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 198 Alex Papadopolous It is also important to note that, where the treatment of an employee (or prospective employee) is based on the fact that they are married or are related to a particular person, this could amount to unlawful marital status and/or family status discrimination. An example can be found in Box 9. Box 9 • • • • Charles applies for a position as a salesperson in IT Company. During the interview, he mentions that his wife works for a competitor. This is contrary to IT Company’s policy. Although Charles is the best candidate for the job, he is not successful. In the scenario in Box 9, IT Company could be found liable for unlawful marital status and/or family status discrimination, unless it can show that the treatment of Charles was based not on the fact of his marriage or relationship to his wife, but on the significant likelihood of collusion between Charles and his wife which would result in damage to the business of IT Company. In such a case, IT Company would need to be able to point to something more than a mere suspicion or belief, or a blanket policy of exclusion. Complaints to the Equal Opportunities Commission The Role of the EOC As has been mentioned at the outset, the EOC is tasked to receive all written complaints of alleged unlawful acts made by aggrieved persons (or their representatives) pursuant to one of the anti-discrimination ordinances and to conduct investigations. This statutory power enables the EOC to ask (and to compel, under the Investigation & Conciliation Rules issued under each ordinance) all persons who have information relevant to a complaint to provide that information to the EOC. Employers and HR departments are often asked to provide documentation and other information in the course of EOC investigations. Given that the EOC can only ask for documents which would otherwise be compellable in civil proceedings, and nothing more, it is generally advisable for employers and HR departments to co-operate and provide the information. Any attempt at delay or any suggestion of lack of co-operation may work against the employer’s best interests. An investigation conducted by the EOC is for the purpose of collecting as much information as possible about the complaint, to enable the EOC to determine whether it should exercise its statutory discretion to discontinue the investigation or to proceed and endeavour to conciliate the complaint between the parties. It is a fact-finding exercise, but the EOC does not (and is not permitted under the legislation to) make any findings as to culpability or liability of the parties. The EOC does not act as judge or arbitrator. There is no finding by the EOC that a complaint has been substantiated or not, although the EOC EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Equal Opportunities Laws in Hong Kong 199 may exercise its discretion to discontinue an investigation if it is of the opinion that the complaint is frivolous, vexatious, misconceived or lacking in substance. The investigator’s role is to act without bias or prejudice and to collect the facts, identify and sort out the issues in dispute, and lead the process to the conciliation phase. All the information gathered by the EOC during the course of the investigation is disclosed to the parties and is admissible in any future legal proceedings. Upon receipt of a written complaint by an aggrieved person (or their representative), the matter is generally assigned to an EOC case officer who has carriage of the matter. The case officer will notify the parties that he/she is looking after the complaint and that he/she will be conducting an investigation into the alleged conduct. The case officer will also explain to the parties the processes followed by the EOC, the investigation that will take place, how information will be used and the steps towards conciliation of the dispute between the parties. If at any time the case officer is of the view that the EOC’s discretion should be exercised to discontinue the investigation into the complaint, the case officer will make a recommendation in writing accordingly. Complainants are given an opportunity to comment before any discretion to discontinue is exercised. EOC statistics show that, between 1 April 2006 and 31 July 2007, the discretion to discontinue investigation was exercised in 60% of cases. In terms of the investigation process, the parties are informed by the case officer that the details of the complaint will be kept confidential. This does not mean that information provided by the parties and/or witnesses will be kept secret. Alleged wrongdoers have the right to know all the information provided against them in order to properly respond to the allegations and, similarly, complainants have the right to know what information has been provided to dispute their allegations. However, all parties to a complaint, and all relevant witnesses, are advised of their responsibility to keep the information confidential and not to disclose to irrelevant third parties. Human resource departments which have been asked to provide information during the course of an EOC investigation should take care to safeguard confidentiality and the personal data of the employees. Complaints to the EOC should be made no later than twelve months after the commission of the alleged unlawful act, though the EOC may accept a complaint lodged out of time if there is a good explanation for the delay. The EOC does not have any time limitation in respect of when the investigation must be concluded, though it has pledged to try and conclude investigations within six months of the date of lodgment. There have been cases, however, where the investigation has exceeded 12 months. Resolution of Complaints Coupled with the statutory mandate to investigate all written complaints lodged with it, the EOC also has a statutory mandate to “encourage” complainants to effect settlement of their complaints, through the process of conciliation. What this means in practical terms is that there is a very strong emphasis by the EOC on getting complaints resolved amicably between the parties. The conciliation phase is entered into once investigation of the complaint has been concluded. The EOC conciliation officer will usually write to the parties and ask them EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 200 Alex Papadopolous if they wish to conciliate. Although conciliation undertaken by the EOC is a voluntary process, in that the parties cannot be forced to reach a settlement of their dispute, the EOC may, nevertheless, compel the parties to attend a conciliation session, and will do so in particular if it considers that the matter will likely settle or be resolved if the parties are brought together. It should be noted that the legislation provides that anything said during the conciliation phase is not admissible in evidence without the parties’ consent. This is to ensure that parties are not discouraged from attempting conciliation and will at least give it a go in the first instance. EOC statistics indicate that approximately 60% to 65% of the cases proceeding to the conciliation phase are successfully conciliated. The attractiveness of conciliation is, essentially, the confidentiality of the process (and outcome if the parties choose) and the avoidance of costly and lengthy legal proceedings. The parties in the conciliation are also free to be more flexible and imaginative in the outcome achieved. For example, where a complainant is seeking a simple conciliatory gesture by way of appeasement, the offer of, say, a fruit basket by the respondent may suffice to redress the sense of grievance suffered. Once the terms have been agreed between the parties, the EOC conciliation officer will reduce the terms to writing and prepare a conciliation agreement for the parties’ signatures. Copies of the agreement are then given to the parties. If the parties fail to conciliate, the EOC will conclude the case as “conciliation unsuccessful” and inform the complainant that he/she has the right to apply to the EOC for legal assistance (though legal assistance is not guaranteed). Legal Proceedings Institution of Proceedings Unlawful acts of discrimination or harassment under the anti-discrimination laws give rise to civil liability. Complainants are able to commence legal proceedings within two years of the unlawful act occurring, and any time spent by the EOC in handling the matter is discounted. Legal proceedings are brought as any other proceedings in tort. Although the actions are brought in the District Court, the remedies are as available in the High Court and there is no cap on damages. However, unlike other tort actions, each side pays its own costs regardless of whether they win or lose. Damages may be awarded for loss of earnings (including future loss) and include damages for injury to feelings, as well as punitive and exemplary damages. EOC Assistance The EOC has power under the legislation to give assistance to complainants who have gone through the EOC’s investigation and conciliation process, but conciliation has not been successful. The assistance given by the EOC can range from the offer of legal advice to full blown legal assistance in taking a case to court. The EOC may appoint one of its EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Equal Opportunities Laws in Hong Kong 201 own lawyers to handle the case (as solicitor and/or counsel in court), or may appoint external solicitors and/or counsel to represent the plaintiff. Not all applicants who apply to the EOC are granted legal assistance, as the EOC has a discretion terms of which cases it will assist. The EOC is not a legal aid agency and it does not take into account the financial standing of an applicant. The legislation requires the EOC to grant assistance in cases in which it thinks it fits to do so, and in particular where the case raises a question of principle or is of such complexity that it would be unreasonable for the applicant to deal with the case unaided. The Hong Kong experience shows that cases brought by the EOC on behalf of plaintiffs have an extremely high success rate. This should be an indication to employers, as well as to HR professionals, that complaints should be taken seriously as soon as they are made. To do otherwise could lead to undesirable consequences. * * * * * Review Questions 1. Review the types of anti-discrimination ordinances in Hong Kong. Discuss the advantages and drawbacks in terms of their scope of protection. 2. What are the role and responsibilities of the human resource professionals in the antidiscrimination activities? 3. Your employer comments that compliance of various anti-discrimination ordinances would impose extra cost to the company. As a human resource manager, advise your management about the importance of compliance and non-compliance to the companies and employees. 4. Pick up one anti-discrimination ordinance and discuss its importance in one of the activities in pre-employment, employment and post-employment phases respectively. 5. Discuss the role and functions of the Equal Opportunities Commission. Evaluate its power and scope. Identify its strengths and weaknesses. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 11 Trade Unionism and Industrial Relations in Hong Kong Apo Leong Introduction The form of trade unionism associated with trade union development in Hong Kong is often deplored as weak, fragmented, and concerned with political purpose rather than workplace conditions.1 Hong Kong trade unions have traditionally been divided between those operating from a left-wing, socialist ideology (e.g., the Hong Kong Federation of Trade Unions, FTU) and those more right-wing in their orientation (e.g., the Hong Kong and Kowloon Trades Union Council, TUC). With a view to circumventing the early criminal activities of the triad societies in Hong Kong and the possible spread of communist ideology from mainland China into Hong Kong, the government was especially concerned with maintaining law and order in a delicate political atmosphere. At the same time, when Hong Kong was under British colonial rule, a classical form of colonial administration was adopted. This cautiously paternal government took an approach to economic matters that could be described as positive non-intervention, if not laissez-faire. In many ways, this has created an ideal relationship between the government and the governed. The unilateral regulation by businessmen or joint regulation by the government and powerful businessmen has also succeeded in pre-empting the workers or their representative agencies in public policy-making. Workers’ voices and aspirations are thus generally not taken seriously in Hong Kong.2 This chapter attempts to give an overview of trade union development and industrial relations in Hong Kong. The feeble state of trade unionism cannot be explained without understanding its history. Thus, the chapter begins with an outline of the development of trade unions in Hong Kong. The causes of union weakness and feeble industrial relations are then discussed. It concludes with the assertion that although the fate of the labour movement is tied to political developments in Hong Kong, Hong Kong trade unionism may have to converge with the Asian pattern of consensual and co-operative industrial relations. Also, based on some insights from the Western literature that suggests trade union decline may not be due to the growing presence of human resource management, the argument will be made that trade unions and HRM can be complementary. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY 204 Apo Leong Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Development of Trade Unions and Industrial Relations General Definitions of Trade Unions and Industrial Relations Western trade unionism is often seen as a social response to the advent of industrialization and capitalism. Early agrarian, semi-feudal societies relied heavily on a benevolent state and trade guilds to provide limited protection for peasants and artisans. As economic development occurred, together with the withdrawal of the state, the principle of a paid contractual relationship between employer and employee was established. Associated with this, employees had to create new institutions for their protection in the increasingly exploitative working environment. Individuals might then draw together into new industrial organizations in order to improve their pay and conditions of employment or to defend their rights in the workplace. As a result, labour organizations such as trade unions emerged.3 A number of theories may explain the complex phenomena of trade unions and industrial relations institutions and activities. One of them is the seminal thesis proposed by Dunlop, the “systems theory”, that asserts: …an industrial relations system at any one time in its development is regarded as comprised of certain actors, certain contexts, an ideology which binds the industrialrelations system together, and a body of rules created to govern the actors at the work place and work community.4 Pluralistic industrial relations exist that accommodate differences in objectives and ideologies between employers and their associations, and the workers and their trade unions. On the other hand, Marxists understand the role of trade unions in the context of the continuous power struggle between classes in a society. Trade unions are not vehicles of revolution but only instruments for developing working-class consciousness, and thus a means to help labour survive until the revolution. In this sense, collective bargaining is viewed merely as a means of social control within industry, and an institutionalized expression of the class struggle between capital and labour in capitalist societies.5 Since the 1980s, increasing interest in HRM has coincided with a steady decline in the significance of trade unions and industrial relations as a central feature of economic development in society. It has been widely debated in the Western literature whether HRM may be an alternative to trade unionism.6 HRM is often assumed to be antithetical to trade unions. The introduction of successive pieces of restrictive legislation to limit the role and rights of trade unions would seem to confirm this. It is tempting to associate the declining trends of trade unions and their membership with the apparent rise of HRM. The relationship between the two will be further discussed later. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Trade Unionism and Industrial Relations in Hong Kong 205 Trade Unions and Industrial Relations in Hong Kong Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. In Hong Kong, a trade union is defined as: any combination the principal objects of which are under its constitution the regulating of relations between employees and employers, or between employees and employees, or between employers and employers, whether such combination would or would not, if this Ordinance had not been enacted, have been deemed to have been an unlawful combination by reason of some one or more of its purposes being in restraint of trade.7 This definition includes workers’ unions, employers’ associations, and mixed associations of employers and workers. For the purpose of this chapter, the term trade union will only be used to refer to workers’ unions. Hong Kong’s trade unionism has been interwoven with political happenings in China since its birth in the 1840s. The formation of the working class in Hong Kong was a direct result of the Opium War. Most of the people who made up the working class were drawn to Hong Kong in order to make a living from other parts of China, such as Guangzhou and Shanghai. They brought with them the clansmen relationship and a primitive form of trade unionism — the guild or triad society. At the same time, the revolutionary movement initiated by Dr. Sun Yat-sen and his associates also used Hong Kong as its haven. The mechanics and seamen who were prominent in the working class were actively involved in labour and revolutionary activities. Labour struggles were launched against inhumane treatment and the working class won considerable concessions from the Hong Kong government and employers. In the year 1925-6, the longest strike in Hong Kong history (lasting 16 months) was witnessed. In response, the government and business joined hands to curb the politicized trade union movement and passed the coercive Illegal Strikes and Lockout Ordinance in 1927. Subsequently, the government intended to duplicate the British model of industrial relations in Hong Kong by promoting bread-and-butter unions and enacting protective labour legislation. Such a move was abruptly shelved due to the invasion of the Japanese army. Two forms of unionism co-existed: the traditional form, i.e., the guild society, dominated by Kuomintang (KMT) influence; and the industrial model of unionism promoted by the communists of the Chinese Communist Party (CCP), as typified by the Seamen’s Union.8 The return of British rule after World War II did not bring peace to industrial relations in Hong Kong. The intensified rivalry between the CCP and KMT led to the formation of two ideologically opposite labour camps — the pro-China FTU, and the pro-Taiwan TUC. Industrial actions were brutally suppressed by the authorities and there were mass dismissals and forceful expulsion of union activists to Taiwan, mainland China and Macau. The authorities tried to promote the British model of bread-and-butter unionism, or “responsible unionism”, by using British experts to run training courses in Hong Kong, but this met with little success. The FTU and their sympathisers unilaterally boycotted all such efforts.9 Still, the government was at least able to co-opt a faction of the TUC resulting in a consultative mechanism, i.e., the Labour Advisory Board (LAB) (see Box 1). EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY 206 Apo Leong Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Box 1 Membership and Composition of the Labour Advisory Board (LAB) Originally created in 1927 by the government, LAB mainly consisted of business elites and was meant to advise the governor on labour laws and related issues. It represented the first official recognition of the importance of labour issues in the territory and later played a part in the incorporation of labour into the Legislative Council constituencies. In 1946, it became a wholly appointed tripartite body, with three representatives from foreign employers, three Chinese employers and three employee representatives. LAB reported to the newly created Commissioner for Labour, who was the official chairman of the board. In 1950, LAB was reconstituted with four members from employer and employee groups alike. Among the four employee representatives, two were elected by their respective unions. After a series of changes to its membership composition, LAB now has six representatives from the employers’ associations and unions respectively. But one of each is still appointed by the government. Being an advisory body to the government, LAB advises the Commissioner for Labour on matters affecting labour, including legislation, and the Conventions and Recommendations of the International Labour Organization. But with no power to directly propose or pass labour legislation, LAB can only recommend policies based on consensus between employee and employer representatives. Within LAB, five committees are responsible for different areas of labour issues, i.e., the Committee on Employees’ Compensation, the Committee on Employment Services, the Committee on the Implementation of International Labour Standards, the Committee on Labour Relations, and the Committee on Occupational Safety and Health. Source: Miners, N. (1988). The representation and participation of trade unions in the Hong Kong government. In Y. C. Jao, D. A. Levin, S. H. Ng, and E. Sinn (Eds.), Labour movement in a changing society: The experience in Hong Kong (pp. 40-47). Hong Kong: Centre of Asian Studies, University of Hong Kong. See also the HKSAR Labour Department website: http://www.labour.gov.hk. The post-war industrialization saw the emergence of a new business class dominated by the Shanghai industrialists in the textile industry. Their modernized factories and better welfare for workers added a new dimension to industrial relations in Hong Kong. However, most of the members of the new business class remained hostile to unions because of their bitter past experiences in China. Large numbers of refugees flooded to Hong Kong from mainland China which kept unions and NGOs busy providing social services rather than launching offensive struggles.10 In 1966 and 1967, an outburst of riots took place, which demonstrated the frustration of the working people. Immediately, the government initiated a series of labour law reforms. Employers were encouraged to set up joint consultative committees. In spite of these changes, industrial relations remained weak or non-existent. Externally, Hong Kong labour officials attending international meetings had been under constant attack from overseas delegates because of poor working conditions and pay. Thus, the role of the government in intervening in labour affairs became more responsive.11 EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Trade Unionism and Industrial Relations in Hong Kong 207 At that time, the traditional unions failed to respond to the rapid transformation of Hong Kong’s economy due to the booming electronics and garment industries, both of which employed large numbers of young female workers. The U.S. and Japanesedominated electronics industry also brought forth a new form of industrial relations practice. These companies preferred to organize social activities themselves. Activities like picnics, beauty contests, and recreation clubs were run to attract young workers, while weeding out potential trouble-makers. Also, many garment factories were small-scale with strong paternalism and high mobility among workers. The rate of unionization in these two major sectors was thus low and insignificant. But the vacuum formed by union weakness was soon filled by more militant white-collar unionism, particularly in the public sector, as spearheaded by the struggles of teachers and nurses.12 Soon, the trade union movement was no longer dominated by the traditional dichotomy between the left and right wings. A tri-polar force emerged, which included some independent union organizations. These independent unions were not consolidated into one united camp until the formation of the CTU in 1990 (see Tables 1 and 2 for details on trade union membership and density in Hong Kong, and Box 3 for an outline of trade union federations). Table 1 Labour Union Membership in Hong Kong Year Number of labour unions Membership Density (%) 1975 302 361,458 24 1985 391 367,560 16 1980 357 1990 384,282 452 1995 468,746 522 2000 19 591,181 594 2005 19 18 673,375 686 22 655,159 21 Source: Registry of Trade Unions, Labour Department (Various years). Annual departmental report by the Registrar of Trade Unions. Hong Kong: Government Printers. Table 2 Labour Unions and Membership of Main Union Federations Year FTU TUC CTU Independent Unions 1980 66 182,601 71 36,723 – – 220 164,958 1990 82 175,746 70 30,693 21 74,038 279 188,269 55 19,520 47 100,115 1985 1995 2000 2005 70 97 136 158 167,832 222,448 286,904 282,202 70 68 36 35,116 29,216 19,260 – 29 68 – 81,686 113,781 251 328 316 375 164,612 257,831 243,397 214,711 Source: Registry of Trade Union, Labour Department (Various years). Annual departmental report by the Registrar of Trade Unions. Hong Kong: Government Printers. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 208 Apo Leong Table 1 shows the change in total union membership in the past three decades. Union membership fell in the 1980s, but since the 1990s, numbers have risen. The loss of manufacturing jobs was offset by gains in the service sectors, especially in the civil service, public sector and community, and social and personal services. The number of labour unions reached 686, representing more than 655,000 members in 2005, with a unionization rate of 20.6 percent. These figures are quite when high compared with those in other developed economies; but membership figures should be interpreted with caution. First, unions may exaggerate the numbers claimed, and the figures may be inflated because in some cases workers can be members of more than one union, especially in the civil service. Second, some of the unions are associations of people who joined together for social and recreational activities; therefore they were civil unions by intent. These groups prefer to be registered as trade unions rather than societies, because societies are subject to more overt police surveillance than trade unions. Third, high rates of union membership can be attributed to the low union subscription rate (HK$10 or less per month), and their limited dependence on income from members. While some trade unions have been actively pursuing this new role in the community in order to gain membership and provide services for a wider constituency,13 some commentators have been critical of this practice. Low subscriptions and emphasis on direct services can foster inter-union competition limited by these welfare activities that hinder the prospect of a union movement.14 Box 2 Major Trade Union Organizations in Hong Kong Hong Kong Federation of Trade Unions (FTU) — Established in 1947, the large, leftwing FTU has placed less emphasis on industrial disputes following a series of setbacks since the 1950s. The FTU adopts a practical and realistic attitude in the industrial relations scene in Hong Kong. It often dodges the thornier issue of labour disputes and puts greater emphasis on maintaining stability in society. On some political issues, such as future political developments and the democratic reform of the HKSAR, the FTU is criticized for following the pro-China line, in contrast to other labour groups. While assisting its members to resolve labour disputes through government channels such as the Labour Relations Division of the Labour Department and the Labour Tribunal instead of initiating industrial action itself, the federation focuses its daily activities on the provision of welfare services to its members. Being the largest union federation in Hong Kong, it has significant membership in various industries, and is particularly strong in traditional industries such as manufacturing and construction. In 2005, it comprised 158 unions and 282,202 members. Hong Kong and Kowloon Trades Union (TUC) — Membership of the TUC is seen as an expression of loyalty to the right-wing Nationalists. It was formed in 1948 and in 2005 comprised 36 unions and 19,260 members. Most of its members are in the traditional sectors of the declining manufacturing, restaurant trade, and transport industries. In the past, it held a stance of ideological rivalry against the FTU; but since the signing of the Joint Declaration and the handover of Hong Kong to China, the EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Trade Unionism and Industrial Relations in Hong Kong 209 TUC has been put in a vulnerable position. It has undertaken little recruitment activity to expand its membership, and its numbers have dwindled because it is unwilling to recognize the Beijing government. Its resources are limited as well, and now are mainly from members’ salaries as dues without international support. Though not able to openly support Taiwan, it organizes small protests and tries to spread awareness of workers’ rights through newspaper coverage. It also participates in the Labour Advisory Board. Hong Kong Confederation of Trade Unions (CTU) — The CTU is an independent trade union federation that was founded in August 1990 by the Hong Kong Christian Industrial Committee (CIC) in response to the Tiananmen Square incident of 1989. It was intended to be a coalition of unions taking a more militant stance and was meant to open a new chapter in labour unionism in Hong Kong. It has risen to take the place of the TUC in aggressively opposing the FTU with a membership of 68 unions and 113,781 members in 2005. One of its major affiliates is the Professional Teachers’ Union. The recession caused by the Asian financial crisis led to a period of accelerated expansion for the CTU. Also, the ongoing phenomena of recommercialization and deindustrialization, and the China factor, have resulted in large numbers of Hong Kong workers relocating, downsizing, and facing wage cuts. Atypical employment and immigrant workers from China also provide leverage for the CTU to compete against the FTU for membership. Its strength is mainly in the social services, transport, and communications sectors. Recent labour organizing efforts include retail, hospitality, and transport workers, and security guards. The CTU does not actively recruit member unions, but when workers approach the CTU with labour disputes, it tries to form an enterprise or industrial union in their workplace. Apart from labour issues, the CTU is a political force among independent unions. It protects workers’ rights by participating actively in various direct election activities in Hong Kong. Often, the CTU and FTU are contenders for leadership and dominance in the exercise of political influence to elicit popular votes in these elections. Unfortunately, Hong Kong’s trade unions remain pluralistic and internally divided. A number of established and aristocratic union bodies organizing white-collar workers in the civil service, public sector, and new service industries have grown significantly. Notable among them are the Federation of Hong Kong and Kowloon Labour Unions (FLC) and the Chinese Civil Servants Association (CCSA). The latter is similar to a federal association of grade-specific combinations in the civil service, registered officially as a generic, umbrella-like union, and with the largest membership among all Hong Kong unions. But its unions are fragmented and dual membership is common. Individuals may join a departmental grade union and the CCSA, and shop around for union-provided benefits and discount bargains. Also, these independent unions are rather inward looking, with parochial view of labour issues representing certain privileged groups. Sources: Retrieved 20 June 2007 from: http://www.ftu.org.hk; http://www.hkctu.org. hk; http://www.hkccsa.org/index.htm; http://www.hkflu.org.hk. See also, Snape, E., and Chan, Andy W. (1997). Wither Hong Kong’s unions: Autonomous trade unionism or classic dualism? British Journal of Industrial Relations, 35(1), 39-63. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 210 Apo Leong Most private companies in Hong Kong have no apparent trade union presence. But industrial relations are non-problematic in most companies, with a lack of overt conflict and grievances. There were occasional disputes (see Table 3 for details on patterns of industrial conflict in Hong Kong).15 But conflicts are usually resolved on an individual, face-to-face basis. Otherwise, official channels such as the Labour Relations Division of the Labour Department, the Minor Employment Claims Adjudication Board, and the Labour Tribunal are able to settle most labour matters. Regarding the role of trade unions in dispute resolution, it has been observed in the past that trade unions tended to intervene after workers had already decided to take action. However, recent studies identify a changing pattern. Because of direct elections arising from political reform and competition between unions, trade unions are now much more likely to be involved in the early stage of a dispute. They participate in larger and longer disputes in terms of the number and duration of conciliation meetings and site visits. This may be partly explained by the involvement of trade unions in settling longer or more complicated cases. Alternatively, it may be attributed to union’s adamant attitude on prolonging the dispute resolution process.16 Table 3 Industrial Conflict in Hong Kong Year Number of Number of lockouts involved strikes and workers 1980 37 1990 15 1985 1995 2000 2005 3 5,083 440 1,490 9 1,347 1 200 5 381 Number of Number of Number of handled by the grievances working days labour disputes wage earners Labour lost per 1,000 and salaried Relations 10.16 171 employees 0.52 1.44 0.37 0.31 0.03 claims and Division 155 168 194 308 237 14,296 20,945 16,610 22,180 28,620 25,952 Source: Registry of Trade Union, Labour Department (Various years). Annual departmental report by the Registrar of Trade Unions. Hong Kong: Government Printers. Explaining the Trade Union Weakness in Hong Kong A number of major reasons may explain the weakness of trade unionism in Hong Kong. One of the foremost reasons is the historical split of unions. The early years of the labour movement were largely focused on political propaganda. Also, the guild origins of trade unions imbued them with a primary emphasis on mutual aid functions only. Following the series of setbacks outlined above, unions adopted the strategy of not confronting employers on work-related issues and instead engaged in “welfarism”.17 EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Trade Unionism and Industrial Relations in Hong Kong 211 The second major factor is due to the legislation in Hong Kong. Laws in Hong Kong encourage a multiplicity of small unions. Borrowed from the U.K.’s Trade Union Act 1871, the Trade Unions Ordinance allows a group with as few as seven voting members to apply for registration as a trade union. There are also restrictions regarding amalgamations and mergers of trade unions.18 Thus, the permissiveness of legal provisions might in fact be conducive to the proliferation of unions and their fragmentation. There is also an argument that the lack of a right to collective bargaining is associated with the legal status of strikes in Hong Kong. The Trade Unions Ordinance has granted trade unions negative immunities for union members from prosecution, such as the right to peaceful picketing and the removal of liability for charges such as restraint of trade, conspiracy, or breach of contract due to union activities. But there is a lack of positive rights to suspend employment during a strike.19 In April 2001, the government introduced amendments to the Employment Ordinance that ostensibly increased the protection of workers against dismissal for participating in strikes. However, the amendment only ensures that if a worker is dismissed for strike action, he or she will then have the right to sue the employer for compensation. There is no legal entitlement to reinstatement if a worker is found to have been unfairly dismissed for participating in a strike. Moreover, Hong Kong follows the British institutional framework of voluntarism in the industrial relations system. With the absence of any statutory requirement, the recognition of trade unions by employers is voluntary.20 The labour movement has frequently complained that employers in the private sector are lukewarm in extending their recognition of trade unions. The Hong Kong government has tried to adopt a policy of encouraging workplace joint consultation where integrative solutions with non-zero sum gains are sought. But disappointingly, development of this idea in the private sector has been limited. A survey found that only 7.8 percent of responding companies set up joint consultative committees (JCCs) in 1999.21 The economic structure of Hong Kong also accounts for the feebleness of trade unions. In the past, there was a high rate of economic growth combined with a tightening labour market in Hong Kong that undermined unionization and the development of collective bargaining. While large firms preferred to develop a quasi-internal labour market, most small firms adopted individualized modes of bargaining with employees that allowed them to tap into the active and competitive external labour market. Nowadays, economic restructuring and deindustrialization are associated with new notions of employment. Themes such as flexibility, deregulation of the labour protection norms, and recasualization (with the reversion to part-time employment, temporary, short-term hiring, etc.) have come to the forefront of the labour scene. The marginality and transient nature of employment is less conducive to organizing labour collectively and thus further contributes to union weakness. Finally, some argue that cultural factors are important in explaining trade union weakness in Hong Kong. Chinese culture has a distaste for confrontation. A neo-Confucian hypothesis suggests that workers in Chinese societies accept authoritarian management and avoid confrontation with employers. Employers then attach this authority to their de facto superior power.22 This has been coupled with the refugee mentality and high interfirm mobility of Hong Kong employees that prepare the workers to work hard for good pay rather than concern themselves with political activism. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY 212 Apo Leong Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Prospects for Trade Unions As seen, a weak trade union movement existed in the past. But as time goes on, Hong Kong people have developed a sense of belonging as many are now born in the territory. A significant number have received higher education and become professionals. Notions of civic pride and rule of law, fairness, rights and democracy are now important. Also, thanks to the past British colonial government, with the officially sponsored programme of electoral reform since the 1980s, Hong Kong society has been nurtured with a strong sense of democracy. Trade unions have been elevated to participate in political electoral activities. They often represent workers in the legislature that gives them a new and enlightened ministerial role as workers’ representatives in a gradually democratizing society. Indeed, they succeed occasionally in pressing the government to advance some progressive labour protection legal norms such as the anti-discrimination ordinances, the Mandatory Provident Fund scheme, alterations to the severance payment scheme, protection against unreasonable termination, and the recent preparatory works for minimum wages for cleaners and security guards. Thus, the political scene has provided a possible channel through which trade unions can address labour issues. But it can also be argued that Hong Kong’s labour movement can be jeopardized by the repoliticization of trade unionism.23 Trade unionist politicians may increasingly withdraw from normal union affairs as they engage in the expensive games of politics and become contenders in political elections who need to elicit popular votes. The split union movement has also prevented labour organizations from leveraging power as a unified platform against the government. Also, the introduction of a highly politicized and Western-style adversarial democratic institution into Hong Kong could be threatening to Chinese authorities.24 Given these factors, it is warranted for Hong Kong’s trade unions to take a pragmatic strategy in the labour scene. Asian economies are accustomed to adopting a harmonious approach towards the regulation of relations between labour and management. An emerging Asian model of practising a non-zero sum collaborative workplace industrial relations may offer an option of strategic choice for business to maintain its competitive advantage.25 The Japanese style of enterprise unionism, where workplace unions constitute a partner institution to the management authority, provides particular inspiration for other countries.26 Hong Kong may join the Asian league of mutual emulation in evolving analogous industrial relations institutions within the region as it advances in the world economy. Other research findings may also offer hope to Hong Kong’s trade unions in the near future. Though HRM is often equated with non-unionism, researchers have attempted to test this thesis and examine whether increased HRM practices would coincide with union decline and serve as a substitute for unionization. Interestingly, studies in the U.K. show that there are no important differences between union and non-union sectors or between newer (non-union) workplaces and older ones in the pattern of HRM practices over time. Also, a longitudinal analysis illustrates no evidence of faster union decline in workplaces or industries that have adopted HRM practices than in those that have not. Thus, the authors of these studies conclude that increased use of HRM practices is probably not an important factor underpinning union decline in Britain. Not only is the hypothesized substitution EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Trade Unionism and Industrial Relations in Hong Kong 213 effect not supported, they even uncover evidence of a complementary relationship between unions and HRM practices.27 Though there is limited research in this area and these findings are subject to further investigation in other places, the implications are instructive to trade unions in Hong Kong. Conclusion The future of the Hong Kong labour movement can be an obscure paradox that betrays potential features of optimism as well as pessimism. Taking a pessimistic view, it is expected that there would be no drastic changes in industrial relations in Hong Kong, as both the government and business look more committed to collude and maintain the status quo. But with an optimistic outlook, it can be argued that while Hong Kong’s economy is facing a more challenging environment, the labour scene also envisages higher incidence of disputes that warrant a greater role for trade unions in defending labour rights and improving employment protection. At the same time, Hong Kong employees are now more vocal and have a stronger propensity to join unions, confront employers, and support industrial action if their interests are threatened. Such disputes can give impetus to unions. The officially sponsored electoral programme in the legislature is useful in this respect as it provides an opportunity for trade unions to participate. But Hong Kong’s sovereignty now rests with the Chinese government that is in favour of only mild and gradual political reform. One may argue that the fate of unions is contingent upon political development in the territory. But the author argues that the future of trade unionism in Hong Kong lies with the unions themselves — whether they can assiduously take labour matters into their own hands for a brighter and more sustainable future. They have to move away from their historical institutional baggage of fragmented, political unionism and adopt a more prudent, politically safer, and viable alternative. Perhaps in collaboration with enlightened HRM practices, trade unions have to support business objectives and effectively represent their members in the workplace by enhancing their functions as job regulators and providers of welfare services for their members. In taking on this challenge in the workplace, trade unions will be able to garner greater support from their members and the public. Box 3 Discussion on Preparatory Work for a Minimum Wage Law After a prolonged debate on the issue of implementing a minimum wage, the Labour Advisory Board has agreed to conduct some preparatory work for a minimum wage law since October 2007. The move came because the Labour Department noted that the number of companies joining the Wage Protection Movement was far below expectations. By the end of September 2007, only 1,041 employers of cleaners and security guards, the two lowest-paid occupations, had joined, representing just a fraction of the 11,500 potential organizations. The average hourly rate for cleaners rose from HK$24.20 to HK$25.10 only, while security guards’ hourly rate increased from HK$26.10 to just HK$27.30 since the launch of the Movement in October 2006. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. 214 Apo Leong There were arguments between the employers’ and workers’ representatives on whether the Movement was successful or not. But both parties agreed to prepare documents for the introduction of a minimum wage law (including the discussion of maximum working hours). In the ensuing LAB meetings, issues for discussion included the definition of cleaners and security guards, how to set salary levels, and dates of review. • • • • • • • • • • • Arguments against the introduction of minimum wage in Hong Kong include: It may result in loss of jobs as employers are forced to cut costs. It may create a two-tier work force, the legal and illegal, as employers seek to circumvent the legislation. It may cause unemployment as employers will wish to hire only the best qualified people. It may reduce the competitiveness of Hong Kong’s economy in Asia. It may be an unnecessary government intervention in private contracts. Arguments for the introduction of minimum wage in Hong Kong include: There is currently a major income disparity in Hong Kong as a result of the lack of any regulation, which the introduction of a minimum wage would address. It would boost consumption in the economy. The legislation would encourage Hong Kong employers to shift to higher value industries and treat employs with dignity and equally. No civilized society can permit such unequal treatment of vulnerable groups of employees. The Employment Ordinance in Hong Kong is not sufficiently protective of the rights of vulnerable groups who can be made to work long hours for very low wages. There must be changes, including the establishment of a maximum number of hours worked per week. Many cleaners and security guards would rather work for low wages than collect the subsidy from the Comprehensive Social Security Assistance Scheme. Source: Lam, Agnes (8 October 2007). Fresh call for minimum wage laser. South China Morning Post, p. A3. Lam, Agnes (31 October 2007). Little pay job for cleaners, guards. South China Morning Post, p. A5. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Trade Unionism and Industrial Relations in Hong Kong 215 Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law. Review Questions 1. What are the factors leading to the weakness and fragmentation of trade unions in Hong Kong? 2. Do you agree that the prospects of Hong Kong trade unions are weak? Why or why not? 3. Imagine you are the human resource manager of a company and a group of employees come to you wanting you to recognize their trade union. What would be your response? How would you advise senior management to respond? 4. Review the role of HRM as opposed to a trade union as an employee advocate in an organization. Do you think they can be complementary? 5. In addition to the points made in Box 3, argue whether or not you agree with the introduction of a minimum wage (and maximum working hours) in Hong Kong. EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/25/2019 5:05 AM via CHOWAN UNIVERSITY Copyright 2009. Hong Kong University Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law.