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Part V
Managing Employee Relations
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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
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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.
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Employment Laws in Hong Kong 165
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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.
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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
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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.
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168 Brian van Langenberg and Fiona Loughrey, Simmons & Simmons
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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.
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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
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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.
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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
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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.
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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:
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•
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•
•
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.
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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.
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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.
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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:
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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.
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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.
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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.
*
*
*
*
*
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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?
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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
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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
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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.
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•
•
•
•
•
•
•
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
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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.
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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
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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.
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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.
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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.
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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.
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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
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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
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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
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•
•
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
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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.
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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
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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
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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
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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.
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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.
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204 Apo Leong
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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.
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Trade Unionism and Industrial Relations in Hong Kong 205
Trade Unions and Industrial Relations in Hong Kong
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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).
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206 Apo Leong
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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
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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.
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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
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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.
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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
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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.
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212 Apo Leong
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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
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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.
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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.
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Trade Unionism and Industrial Relations in Hong Kong 215
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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.
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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.