Chapter 6 Employees' Rights and Benefits

The Programme of Employees' Rights and Benefits

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

6.1The 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 takes into account 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 of 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);
• administering the Reimbursement of Maternity Leave Pay (RMLP) Scheme;
• 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.

6.2The principal legislation administered by this programme area includes the Employees' Compensation Ordinance (ECO), the Pneumoconiosis and Mesothelioma (Compensation) Ordinance (PMCO), the Occupational Deafness (Compensation) Ordinance (ODCO), the Employees Compensation Assistance Ordinance (ECAO), 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.

6.3The ECO establishes a no-fault, non-contributory employees' compensation system so that individual employers are liable to pay compensation for work-related injuries and fatalities. It requires all employers to possess valid insurance policies to cover their liabilities under the laws (including the common law).

6.4The PMCO provides for compensation payable to persons who suffer from pneumoconiosis and/or mesothelioma and family members of persons who die of these diseases. Compensation is paid from the Pneumoconiosis Compensation Fund, which is administered by the Pneumoconiosis Compensation Fund Board.

6.5The ODCO provides for compensation payable to persons who suffer from noise-induced deafness by reason of employment in specified noisy occupations. Compensation is paid from the Occupational Deafness Compensation Fund, which is administered by the Occupational Deafness Compensation Board.

6.6The ECAO establishes the Employees Compensation Assistance Fund to provide assistance payment to injured employees and family members of deceased employees who are unable to receive their entitlements for work-related injuries and fatalities from employers and insurers. The fund is administered by the Employees Compensation Assistance Fund Board.

6.7The EO is the main piece of legislation governing conditions of employment. The Employment of Children Regulations made under the 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.

6.8The MWO establishes a Statutory Minimum Wage (SMW) regime 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 the SMW amounts to a breach of the wage provisions under the EO.

6.9The PWIO establishes the PWIF to provide timely relief in the form of ex gratia payment to employees affected by their insolvent employers.

6.10The Labour Department (LD) also administers Part IVB of the Immigration Ordinance to assist in combatting illegal employment in order to protect the employment opportunities of local workers.

Our Work and Achievements in 2023

Key Indicators of Work

6.11We sustained our efforts to safeguard the rights and benefits of employees through various activities in 2023. Some key indicators of work of this programme area are shown in Appendix 6.1.

Improvement to Employees' Benefits

6.12With effect from 13 April 2023, the ECO, PMCO and ODCO were amended to increase the amounts of a total of 18 compensation items payable in cases involving work accidents or prescribed occupational diseases.

6.13The SMW rate under the MWO was increased by 6.7% from $37.5 to $40 per hour with effect from 1 May 2023.

Proactive Efforts to Combat Wage Defaults

6.14In 2023, the LD continued to adopt a proactive strategy to tackle the problem of non-payment of wages at source through enhancing publicity and promotion, taking enforcement and prosecution actions, 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 wage default at an early stage and intervening early to tackle the problem.

6.15We continued to take enforcement and prosecution actions against employers and responsible individuals of companies for wage offences. We conducted territory-wide inspections of workplaces to detect wage offences. Labour inspectors actively interviewed employees during inspections and conducted investigation speedily into the suspected offences. Prosecutions were taken out whenever sufficient evidence was available.

6.16During the year, the LD secured 819 convicted summonses for wage offences and 204 convicted summonses for defaults of awards made by the Labour Tribunal (LT) or the Minor Employment Claims Adjudication Board (MECAB). One company director was sentenced to imprisonment for these offences, and another nine company directors and one secretary were ordered to perform community service. These sentences disseminated a strong message to employers and company responsible individuals on the seriousness of defaults of wages and awards made by the LT or the MECAB.

Vigorous Enforcement to Protect Employees' Rights and Benefits

6.17The LD continued vigorous enforcement efforts to ensure that the statutory rights of employees under labour legislation were well protected.

6.18In 2023, Labour Inspectors carried out 150 172 workplace inspections of establishments in various trades to enforce labour laws (Appendix 6.2). A total of 1 067 complaints were handled in the year.

6.19To safeguard employees' entitlement to the SMW, we also conducted proactive workplace inspections of various establishments and mounted targeted enforcement campaigns for low-paying sectors. In the year, 63 465 inspections were conducted to check compliance with the MWO.

6.20We conducted inspections and trade-targeted operations to enforce the ECO's compulsory requirement of taking out employees' compensation insurance policy. In the year, a total of 112 134 inspections were conducted to enforce the statutory requirement.

6.21We continued to work closely with government departments in monitoring their service contractors to ensure that non-skilled employees of the contractors enjoyed their rights and benefits. A total of 1 103 inspections were conducted to the workplaces of such workers and 3 850 workers were interviewed to check contractors' compliance with labour laws.

6.22To ensure compliance with the conditions under the Supplementary Labour Scheme (SLS)/ Enhanced Supplementary Labour Scheme (ESLS), we investigated 119 complaints and cases on suspected irregularities involving imported workers. Items investigated included wages and working hours arrangement.

Processing Employees' Compensation Cases and Improving Work Injury Protection for Employees

6.23Under 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 by the Commissioner for Labour under the improved settlement mechanism introduced in August 2000.

6.24In 2023, 41 758 employees' compensation cases, including 11 442 minor cases which involved sick leave of not exceeding three days, were received. At year-end, among the 30 316 fatal cases or non-fatal cases involving sick leave exceeding three days, 18 107 cases were settled. The amount of employees' compensation involved was $276 million. The remaining cases were pending expiry of employees' sick leave, assessment of permanent incapacity or court judgment (Appendices 6.3 and 6.4).

6.25The LD enhanced the Claims Support Services through dedicated follow-up, early intervention and proactive contact to facilitate timely resolution of differences between employers and employees in employees' compensation cases.

6.26The Task Force on Improving Work Injury Protection for Employees in High-risk Industries (Task Force) coordinated by the LD continued to implement improvement measures including stepping up the publicity and promotion of taking out adequate employees' compensation insurance coverage by employers, enhancing the case processing of employees' compensation claims, shortening the waiting time of injured employees for work injury assessments and strengthening training on occupational medicine. The Task Force will continue to discuss and implement other improvement measures.

Briefings and Promotional Campaigns

6.27In 2023, the LD arranged 29 and 122 briefings for employers and imported workers respectively under the SLS/ESLS to publicise the rights and obligations of the parties concerned.

6.28Extensive publicity campaigns were launched to publicise our complaint telephone hotline (2815 2200) through public transportation network, advertisements inside MTR stations and compartments, newspaper articles, etc. to encourage employees to report suspected breaches of employment rights.

6.29We organised a wide range of publicity activities to promote the revised SMW rate and the MWO during the year. These activities included broadcasting TV and Radio APIs, distributing and displaying leaflets and posters, holding seminars and exhibitions, publishing feature articles in newspapers, providing online interactive games on the LD's website, and placing advertisements through various channels such as newspapers, mobile applications, Internet platforms and public transport.

6.30We continued to promote employers' statutory obligations on timely reporting of work accidents and taking out employees' compensation insurance policies through broadcasting APIs, placing advertisements through various channels (such as newspapers, journals of workers' unions and trade associations, mobile applications and public transport), distributing and displaying leaflets and posters, as well as holding seminars on the ECO.

RMLP Scheme

6.31In tandem with the extension of the statutory maternity leave from 10 weeks to 14 weeks since end-2020, the LD rolled out the RMLP Scheme to fully reimburse employers for the additional statutory maternity leave pay, subject to a cap of $80,000 per employee.

6.32The RMLP Scheme runs a one-stop online portal "Reimbursement Easy Portal" (www.rmlps.gov.hk). Employers, after completing account registration, will gain access to a wide range of services, including online submission of applications, checking application progress, making enquiries and receiving latest information on the RMLP Scheme. In 2023, the RMLP Scheme received 7 367 applications and approved 6 820 applications with reimbursement of $167 million.

Partnership with Statutory Bodies

6.33We maintain close partnership with various statutory bodies that have been 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)

6.34The PWIFB established under the PWIO is responsible for administering the 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 the PWIF in accordance with the PWIO. The PWIF is mainly financed by a levy on business registration.

6.35The LD provides administrative support to the PWIFB, verifies applications and approves ex gratia payment from the PWIF. In 2023, we received 3 293 applications and processed 3 904 applications from employees who were owed wages and other statutory entitlements due to business cessation and sought relief from the PWIF, with ex gratia payment of $155 million made. A breakdown of applications received by economic sector is shown in Appendix 6.5.

6.36By providing a safety net for employees affected by business closures, the PWIF plays an important role in maintaining good labour relations and social stability. Both the LD and the PWIFB attach great importance to protecting the 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 the LD, the Commercial Crime Bureau of the Hong Kong Police Force, the Official Receiver's Office and the Legal Aid Department to take concerted actions against suspected fraudulent cases.

Pneumoconiosis Compensation Fund Board (PCFB)

6.37The PCFB is established under the PMCO to provide compensation to persons suffering from pneumoconiosis and/or mesothelioma and family members of persons who die of these diseases. The PCFB is financed by a levy collected from the construction and quarrying industries. Under the PMCO, the LD is responsible for determining whether an applicant is entitled to compensation. As at end-2023, 1 379 eligible persons were receiving compensation in the form of monthly payments from the PCFB. In the year, the PCFB made a total compensation payment of $221 million.

Occupational Deafness Compensation Board (ODCB)

6.38Established under the ODCO, the 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. The ODCB also launches educational and publicity programmes for the prevention of occupational deafness, and provides rehabilitation programmes for those suffering from occupational deafness. In 2023, the ODCB approved 289 applications for compensation with a total compensation payout at $29.06 million and 939 applications for payment of expenses on hearing assistive devices with a total payout at $8.53 million. The ODCB also provided 610 rehabilitation programmes for people with hearing impairment caused by their employment in specified noisy occupations.

Employees Compensation Assistance Fund Board (ECAFB)

6.39Set up under the ECAO, the ECAFB is responsible for administering the Employees Compensation Assistance Fund which provides assistance payment to eligible injured employees and family members of deceased employees who are unable to receive their entitlements for work-related injuries and fatalities from employers and insurers after exhausting all legal and financially viable means of recovery. In 2023, the ECAFB approved 50 applications, leading to payment of $64.62 million.

Abolition of the MPF Offsetting Arrangement

6.40The Government pressed ahead with the preparatory work and carried out extensive publicity work to help employers and employees understand the abolition arrangement, including conducting briefings for employer associations, trade unions and human resources practitioners, publishing posts on social media, placing feature articles and advertorials in major newspapers and news applications, enhancing the content of the thematic website and producing video clips. The thematic website also provided an online calculating tool to facilitate employers and employees to calculate severance payment/long service payment after the abolition, government subsidies that employers might receive and the total benefits of employees.