PROPOSALS
A. To repeal the Employment (Amendment) (No. 4)
Ordinance 1997
2. This Amendment Ordinance seeks to strengthen
the protection of employees against anti-union discrimination
and its major provisions are:
(a) To create a new right for employees to
make civil claims against acts of anti-union discrimination (including
dismissal, refusing offer of appointment and determining terms
of employment on the ground of anti-union discrimination, as well
as deterring employees from exercising rights to be a member of
trade unions, taking part in their activities and to associate
with other people for the purpose of forming a trade union), and
to place on the employer an evidential burden to adduce evidence
to show that the employee did not suffer any detriment on account
of his exercising any of the above rights.
(b) To confer upon the Labour Tribunal jurisdiction
to hear and determine civil claims relating to anti-union discrimination
under the Ordinance with wide powers to grant a range of remedies,
including reinstatement or re-employment, promotion, compensation
and punitive/exemplary damages.
3. The provisions of this Amendment Ordinance
are substantially similar to the provisions for employment protection
in respect of unlawful dismissal on the ground of anti-union discrimination
under the Employment (Amendment) (No. 3) Ordinance 1997 which
was proposed by the Government. This Ordinance, which aimed at
strengthening protection of employees against unreasonable termination
of employment, unreasonable variation of employment contract and
unlawful dismissals, came into effect on 27 June 1997. In respect
of dismissal on ground of union discrimination, the major differences
lie in the range of remedies. The No. 3 Ordinance provides for
re-instatement/re-engagement subject to prior mutual consent between
employers and employees, terminal payments and an award of compensation
up to a maximum of $150,000, while those provided under the Amendment
Ordinance include re-instatement, promotion and other staffing
arrangement without such mutual consent, as well as compensation
for damage without any maximum limit.
4. We propose that this Amendment Ordinance
be repealed, on the following grounds:
— There is no need to bring this Amendment
Ordinance into effect, as similar protection for employees against
dismissal on the ground of anti-union discrimination has already
been provided for under the Employment (Amendment) (No. 3) Ordinance
1997, which came into operation on 27 June 1997.
— Owing to the similarities between
the provisions of the Amendment Ordinance and those contained
in the Employment (Amendment) (No. 3) Ordinance 1997 relating
to anti-union discrimination, the concurrent operation of these
two ordinances will create unnecessary confusion amongst employers,
employees and the Labour Tribunal.
— This proposal was unanimously agreed
by all the employer and employee members of the Labour Advisory
Board (LAB) at its meeting on 15 August 1997. The LAB also agreed
that a review should be conducted on the provisions on re-instatement
under the Employment (Amendment) (No. 3) Ordinance 1997—the
major area of difference between the above two ordinances, after
the latter has come into effect for one year.
B. To repeal the Employee's Rights to Representation,
Consultation and Collective Bargaining Ordinance
5. This Ordinance seeks mainly to provide the
following new rights to individual employees:
(a) the right to be represented by a trade
union on employment matters;
(b) the right to be consulted by their employer
through a representative trade union on matters affecting their
interests provided that the employer has employed 20 or more employees
and more than 15 per cent of those employees are members of that
union;
(c) the right to be covered by a collective
agreement negotiated by a representative trade union with their
employer provided that the employer has employed 50 or more employees,
that more than 15 per cent of those employees are members of that
union and the union represents more than 50 per cent of those
employees; and
(d) the right to be paid normal wages for
time off taken by trade union representatives to carry out functions
related to the above new rights and when these representatives
undergo training endorsed by the trade union.
In a nutshell, its primary objective is to legislate
for collective bargaining in Hong Kong.
6. We propose to repeal this Ordinance
on the following grounds:
— There is no imminent need for Hong
Kong to introduce mandatory collective bargaining by legislation
because—
(a) the existing practice of voluntary and
direct negotiation between employer and employee(s) at enterprise
level, underpinned by the conciliation service rendered by the
Labour Department, has been working well; and
(b) Hong Kong enjoys harmonious labour relations.
With the current system of dispute resolution, the average number
of working days lost through labour disputes in the past three
years was 0.5 day per 1,000 wage earners and salaried employees—one
of the lowest in the world. There is no need to change this system.
— While the law may force the parties
concerned to go through the ritual of collective bargaining, there
is no guarantee that it can result in an agreement. Thus, compulsory
collective bargaining by statute, especially in the face of strong
opposition from employers, may result in a more confrontational
and legalistic system of labour relations which may not be beneficial
to Hong Kong.
— Compulsory collective bargaining
by law will inevitably reduce the role of market forces in the
existing wage setting process, especially during the downswing
of an economic cycle, causing distortions to the labour market
which will in turn undermine the responsiveness of the economy
to changes in the market. In the UK, for example, the difference
between union and non-union wages (1985-1987) has been estimated
to be 10 per cent, with its unemployment rate at 8.3 per cent
(10-year average from 1987 to 1996).
— To the extent that the increase in
rigidities in the labour market will weaken Hong Kong's attractiveness
to overseas investors, this ordinance will ironically be disadvantageous
to the employees' labour union representation. For example, in
Germany and Finland where works councils command extensive co-determination
rights in the setting of working conditions, the average unemployment
rate amounts to around 9 per cent and 10.7 per cent respectively
(10-year average from 1987-1996).
— When it is the trend in many other
economies in the world to reduce, and not to compound restrictions
and impediments in the labour market, it would be most unwise
for Hong Kong to move in the reverse direction.
— Whilst objecting to compulsory collective
bargaining, we are not rejecting all forms of collective bargaining.
We have applied in full the International Labour Convention No.
98 concerning the right to organise and collective bargaining
since 1975, and have fully complied with it by promoting voluntary
negotiation and good communication between employers and employees.
The Labour Department will be setting up
a special unit specifically tasked with the promotion of direct
and voluntary negotiation between employers and employees. Its
programme of activities will include stepping up the promotion
of effective communication and good management practices, conducting
regular surveys on the practices of voluntary negotiation in Hong
Kong, encouraging and assisting target establishments to set up
machinery for voluntary negotiation and effective communication,
drawing up codes of practices/guidebooks on the subject for reference
by employers and employees.
— This proposal was endorsed by a majority
of members of the LAB. (However, we note that this consensus was
reached with a rider that the LAB would continue to explore modes
of negotiation and collective bargaining best suited to Hong Kong.)
C. To amend the Trade Unions (Amendment) (NO.
2) Ordinance 1997
7. This Amendment Ordinance seeks to relax the
existing restrictions on trade unions under the Trade Unions Ordinance
(Cap. 332) (TUO) in certain contentious areas. The major provisions
of the Amendment Ordinance are to:
(a) relax the restriction of becoming officers
of a trade union;
(b) relax the procedure for changing the
name of a trade union from secret ballot to voting in general
meetings among members of the trade union;
(c) repeal the requirement of Chief Executive's
approval of a trade union to contribute or donate funds, other
than the welfare and political funds, to any other trade unions
or similar organisations established outside Hong Kong;
(d) remove the restrictions on the application
of trade union funds for political purpose;
(e) remove the restrictions on the use of
trade union funds for any purposes and the need to seek approval
of the Chief Executive;
(f) remove the requirement of the Chief Executive's
approval for a trade union to be a member of any kind of trade
union or other organisation established outside Hong Kong; and
(g) remove the prohibition of the formation
of a trade union federation with member unions coming from different
trades, industries or occupations.
8. We have conducted a comprehensive review
of the entire Trade Unions Ordinance including the provisions
of the above Amendment Ordinance. We proposed the following
amendments:
(a) To retain the following provisions under
the Amendment Ordinance:
(i) To lower the age requirement for
becoming a member of the executive committee of a union from 21
to 18 years of age.
To tie in with the statutory minimum
age for registration as a voter for the three-tier elections in
Hong Kong.
(ii) To lower the requirement in voting
for change of trade union name from two-thirds of all voting members
to a majority of voting members present at a general meeting.
Given the relatively less controversial
nature of a decision on merely the change of trade union name
and the genuine difficulty of trade unions in ensuring compliance
with the existing requirement of a two-thirds majority, the requirement
of a majority of voting members present is considered sufficient.
(iii) To remove the prohibition against
federation of trade unions belonging to different trades, industries
and occupations.
This brings Hong Kong's law on trade
unions into line with international practice, and leads to a better
utilisation of resources of small trade unions.
(iv) To repeal the requirement for officers
of a trade union federation to be engaged in the trade concerned.
With the removal of prohibition against
federation of trade unions belonging to different trades, industries
and occupations, it is no longer necessary to retain such requirements.
(b) To reinstate the original provisions
of the Trade Unions Ordinance which were amended by the Amendment
Ordinance (i.e., to repeal the corresponding provisions under
the Amendment Ordinance). They are:
— the requirement for officer of
a trade union to be engaged in the trade concerned;
— the requirement of the Chief
Executive's approval for a trade union to contribute or donate
funds to any trade union or similar organisation outside Hong
Kong;
— the restrictions on the use of
funds for any purpose and the need to seek approval of the Chief
Executive; and
— the restrictions on the application
of trade union funds for political purpose.
The restrictions on the occupational background
of trade union officials and use of trade union funds are necessary
safeguards to ensure the healthy development of trade unions in
Hong Kong and to ensure that the role of trade unions will be
strictly confined to the promotion and protection of welfare of
its members.
(c) To maintain the original age requirement
that a person under the age of 16 may be a member of a registered
union, but shall not be a voting member.
To prevent trade unions from taking
important decisions strictly on the basis of the votes cast by
premature members.
(d) To amend the previous provision
concerning the affiliation of local trade unions with organisations
outside Hong Kong under the Trade Unions Ordinance (before they
were deleted under the Amendment Ordinance) as follows:
(i) To allow a trade union to
be a member of related organisations (i.e., organisations of workers,
employers and relevant professional organisations) in foreign
countries and to pay the necessary membership fees without the
need for prior approval from the Government but to require it
to:
— notify the Registrar of Trade
Unions of the Labour Department within one month after becoming
a member of such organisations.
— seek approval of the majority
of its voting members present at a general meeting by secret ballot
before proceeding to become a member of the organisations.
It has been a common practice for trade
unions, local and overseas alike, to establish links or affiliate
with overseas trade unions, employers or professional organisations
with common interests. This is also in line with the relevant
provisions under International Labour Convention No. 87 relating
to the rights of trade unions.
(ii) To restore the previous requirement
to seek the Chief Executive's approval for affiliation with overseas
organisations other than those of workers, employers and relevant
professional organisations. (Such consent may be withdrawn at
the discretion of the Chief Executive.)
Some form of control is necessary to
prevent local trade unions from being unduly influenced or controlled
by unrelated overseas organisations including political organisations,
to the detriment of the interests of its members.
(e) To provide a new right of appeal
against refusal by the Registrar of Trade Unions to register the
amended, altered or new rules.
This is in line with similar provisions
of the Trade Unions Ordinance and serves to address the reasonable
complaints from local trade unions about the lack of an appeal
mechanism against such decisions by the Registrar.
9. This package of legislative proposals was
unanimously agreed by all the members of the LAB.
Education and Manpower Bureau
November 1997
