Chapter 6 Employees' Rights and Benefits

The Programme of Employees' Rights and Benefits

www.labour.gov.hk/eng/erb/content.htm

6.1	The objective of the Employees’ Rights and Benefits Programme is to improve and safeguard employees’ rights and benefits in an equitable manner. Our aim is to progressively enhance employment standards in a way which is commensurate with the pace of Hong Kong’s economic and social developments and which strikes a reasonable balance between the interests of employers and employees. We achieve this by: Setting and refining employment standards in consultation with the Labour Advisory Board; Ensuring compliance with statutory and contractual terms and conditions of employment through inspection to workplaces, investigation into suspected breaches of the statutory provisions and prosecution of offenders; Processing employees’ compensation claims; Processing applications for ex gratia payment from the Protection of Wages on Insolvency Fund (PWIF); Maintaining close partnership with statutory bodies set up for protecting the rights and benefits of employees; and Providing customer-oriented information to ensure that employees and employers know their rights and obligations.
6.2	The principal legislation administered by this programme area includes the Employees’ Compensation Ordinance (ECO), the Pneumoconiosis and Mesothelioma (Compensation) Ordinance (PMCO), the Employment Ordinance (EO) and its subsidiary Employment of Children Regulations and Employment of Young Persons (Industry) Regulations, the Minimum Wage Ordinance (MWO), the Protection of Wages on Insolvency Ordinance (PWIO) as well as Part IVB of the Immigration Ordinance.
	6.3	ECO establishes a no-fault, non-contributory employees’ compensation system so that individual employers are liable to pay compensation for work-related injuries or fatalities. It requires all employers to possess valid insurance policies to cover their liabilities under the laws (including the common law).
6.4	PMCO provides compensation to persons who suffer from pneumoconiosis and/or mesothelioma or family members of persons died of the diseases. Compensation is paid from the Pneumoconiosis Compensation Fund, which is administered by the Pneumoconiosis Compensation Fund Board.
6.5	EO is the main piece of legislation governing conditions of employment. The Employment of Children Regulations made under EO prohibit the employment of children below the age of 15 in industrial undertakings and regulate the employment of children who have attained the age of 13 but under 15 in non-industrial establishments. The Employment of Young Persons (Industry) Regulations set out requirements on the working time arrangements for young persons employed in the industrial sector and prohibit their employment in dangerous trades.
6.6	MWO establishes a Statutory Minimum Wage (SMW) system which provides a wage floor with a view to forestalling excessively low wages, but without unduly jeopardising Hong Kong’s labour market flexibility, economic growth and competitiveness or leading to significant adverse impact on the employment opportunities of vulnerable workers. Failure to pay SMW amounts to a breach of the wage provisions under EO.
6.7	PWIO establishes PWIF to provide timely relief in the form of ex gratia payment to employees affected by their insolvent employers.
6.8	The Labour Department (LD) administers Part IVB of the Immigration Ordinance to combat illegal employment in order to protect the employment opportunities of local workers.
Our Work and Achievements in 2016 Key Indicators of Work
6.9	We stepped up our efforts to safeguard the rights and benefits of employees through various activities in 2016. Some key indicators of work of this programme area were shown in Figure 6.1.
Proactive Efforts to Combat Wage Defaults
6.10	In 2016, LD continued to adopt a proactive strategy to tackle the problem of non-payment of wages at source through enhancing publicity and promotion, stepping up enforcement and prosecution, and making use of the early warning system set up in collaboration with trade unions to gather relevant intelligence. We also proactively monitored selected sectors and establishments with a view to forestalling and detecting cases of wages default at an early stage and intervening early to tackle the problem.
6.11	In 2016, we continued to step up prosecution against employers and responsible officers of companies for wage offences. We conducted territory-wide blitz inspections to workplaces to detect wage offences. Labour inspectors actively interviewed employees during inspections and conducted investigation speedily into the suspected offences. The Employment Claims Investigation Division continued to vigorously conduct prompt investigation into suspected wage offences under EO. Prosecutions were taken out against employers and company responsible officers whenever sufficient evidence was available.
6.12	In 2016, 713 summonses were heard in respect of wage offences. The number of convicted summonses was 503. Besides, LD secured convictions for 73 summonses relating to default of awards made by the Labour Tribunal (LT) or the Minor Employment Claims Adjudication Board (MECAB). During the year, one company director was ordered to perform community service for wage defaults. An employer and another company director were respectively sentenced to imprisonment and community service for wage defaults and failure to pay sums awarded by the tribunal. In addition, a company was fined a total of $764,000 for wage offences, the highest recorded during the year. These sentences disseminated a strong message to employers and company responsible officers on the seriousness of defaults of wages and awards made by LT or MECAB.
Vigorous Enforcement to Protect Employees' Rights and Benefits
6.13	LD continued our vigorous enforcement efforts to ensure that the statutory rights of employees under labour legislation were well protected.
6.14	In 2016, labour inspectors carried out 148 968 workplace inspections to establishments in different trades to enforce labour laws (Figure 6.2), of which 44 084 inspections were conducted to check compliance with MWO.
6.15	We conducted inspections and trade-targeted operations to enforce ECO’s compulsory requirement of taking out employees’ compensation insurance policy. In the year, a total of 86 063 inspections were conducted to enforce the statutory requirement. Employers failing to comply with the requirement were prosecuted.
6.16	In the year, we continued to work closely with government departments in monitoring their service contractors to ensure that non-skilled employees of the contractors enjoyed their statutory rights and benefits. A total of 687 inspections were conducted to the workplaces of such workers and 2 035 workers were interviewed to check contractors’ compliance with labour laws.
6.17	To ensure compliance with the conditions under SLS, we investigated 69 complaints and cases on suspected irregularities involving imported workers. Items investigated included payment of wages, arrangement of working hours, etc.
Processing Employees’ Compensation Cases and Improving Work Injury Protection for Employees
6.18	Under the current no-fault employees’ compensation system, compensation is payable to injured employees or family members of deceased employees for any work-related injuries or fatalities. Claims for compensation involving fatality are determined by the courts or, under the improved settlement mechanism introduced in August 2000, by the Commissioner for Labour.
6.19	In 2016, 51 554 employees’ compensation cases, including 15 134 minor cases which involved sick leave of not exceeding three days, were received. At year-end, among the 36 420 fatal cases or non-fatal cases involving sick leave exceeding three days, 22 156 cases were settled. The amount of employees’ compensation involved was $273 million. The remaining cases were pending expiry of sick leave, assessment of permanent incapacity or court judgment. (Figures 6.3 and 6.4)
6.20	The Loan Scheme for Employees Injured at Work and Dependants of Deceased Employees provides temporary relief to victims of work accidents. Under the scheme, an interest-free loan up to $15,000 in each case is made to eligible applicants.
6.21	The Task Force on Improving Work Injury Protection for Employees in High-risk Industries coordinated by LD furthered the discussions on employees’ compensation insurance, case processing and therapy/rehabilitation, conducted consultations and progressively implemented improvement measures.
Briefings and Promotional Campaigns
6.22	In 2016, we arranged two briefings for government departments and 63 briefings for imported workers to publicise the rights and obligations of the parties concerned.
6.23	Extensive publicity campaigns were launched to publicise our complaint telephone hotline (2815 2200) through press releases, advertisements on newspapers, tram body, inside MTR stations and compartments, etc. to encourage employees to report suspected breaches of employment rights.
6.24	In 2016, we organised various publicity activities to continue to promote MWO. These activities included: broadcasting television and radio Announcements in the Public Interest through different media; wide distribution and display of leaflets and posters; holding seminars and roving exhibitions; and placing advertisements in publications of major labour unions and trade associations as well as on Internet platforms and public transport, etc.
Talk on the Minimum Wage Ordinance
6.25	We continued to promote employers’ statutory obligation on timely reporting of work accidents and to take out employees’ compensation insurance policies through electronic media, leaflets, departmental homepage and seminars on ECO. In the year, we held 12 talks on ECO.
Seminar on the Employees' Compensation Ordinance
Partnership with Statutory Bodies
6.26	We maintained close partnership with various statutory bodies that were set up for implementing the different schemes for the protection of the rights and benefits of employees.
Protection of Wages on Insolvency Fund Board (PWIFB)
6.27	PWIFB is established under PWIO and is responsible for administering PWIF. Employees who are owed wages, wages in lieu of notice, severance payment, pay for untaken annual leave and pay for untaken statutory holidays by their insolvent employers may apply for ex gratia payment from PWIF in accordance with PWIO. PWIF is mainly financed by a levy on business registration certificates.
6.28	We provide administrative support to PWIFB, verify applications and approve ex gratia payment from PWIF. In 2016, we received 3 348 applications and processed 2 905 applications from employees who were owed wages and other statutory entitlements due to business cessation and sought relief from PWIF, with ex gratia payment of $80.2 million made. A breakdown of applications received by economic sector was shown in Figure 6.5. During the year, PWIF recorded a surplus of $228 million.
6.29	By providing a safety net for employees affected by business closures, PWIF plays an important role in maintaining harmonious labour relations and social stability. Both LD and PWIFB attach great importance to protecting PWIF from possible abuse. To this end, stringent vetting procedures are in place to process all applications. An inter-departmental task force has been formed by representatives of LD, Commercial Crime Bureau of the Police Force, Official Receiver’s Office and Legal Aid Department to take concerted actions against suspected fraudulent cases.
Pneumoconiosis Compensation Fund Board (PCFB)
6.30	PCFB is established under PMCO to provide compensation to persons suffering from pneumoconiosis and/or mesothelioma or family members of persons died of the diseases. PCFB is financed by a levy collected from the construction and quarrying industries. Under PMCO, LD is responsible for determining whether an applicant is entitled to compensation. As at the end of 2016, 1 543 eligible persons were receiving compensation in the form of monthly payments from PCFB. In the year, PCFB made a total compensation payment of $192 million.
Employees Compensation Assistance Fund Board (ECAFB)
6.31	ECAFB is set up under the Employees Compensation Assistance Ordinance (ECAO). ECAFB is responsible for administering the Employees Compensation Assistance Scheme which provides payment to injured employees or family members of deceased employees who are unable to receive their entitlements for work-related injuries or fatalities from their employers or insurers. In 2016, ECAFB approved 59 applications, leading to payment of $53.78 million. With effect from 1 April 2004, the Employees Compensation Insurer Insolvency Bureau established by the insurance industry took over from ECAFB the responsibility of meeting the liabilities arising from employees’ compensation insurance policies in the event of the insolvency of the relevant insurers.
Occupational Deafness Compensation Board (ODCB)
6.32	Established under ODCO, ODCB provides compensation for persons who suffer from noise-induced deafness by reason of employment in specified noisy occupations and financial assistance for their purchase, fitting, repair or maintenance of hearing assistive devices. ODCB also has an important role in launching educational and publicity programmes for the prevention of occupational deafness, and providing rehabilitation programmes for those suffering from occupational deafness. In 2016, ODCB approved 218 applications for compensation with a total compensation payout at $18.27 million and 577 applications for payment of expenses on hearing assistive devices with a total payout at $2.77 million. ODCB also provided 404 rehabilitation programmes for people with hearing impairment caused by their employment in specified noisy occupations.