CHAPTER 1
HIGHLIGHTS OF THE YEAR 2005

1.1

Along with globalisation, Hong Kong is facing the challenges brought about by economic restructuring. Despite continued improvement in the employment market, with the unemployment rate coming down from 8.6 per cent in mid-2003 to 5.3 per cent at the end of 2005, employment continues to be a subject of public concern. With a proactive and pragmatic approach and given united efforts, the Labour Department has achieved notable results in various programme areas.

   

Employment Services

Enhanced Employment Services

1.2

We continue to adopt a proactive, innovative, flexible and cost-effective approach in further strengthening our employment service to help the unemployed re-enter the labour market and meet the recruitment needs of employers. Twelve large-scale job bazaars and 46 district-based job fairs were held in the year to assist job-seekers in finding jobs and employers in recruiting staff. A record high of 113 090 placements were secured through the Labour Department in 2005. The number of vacancies solicited from the private and public sectors, at 432 314, also broke past records. The Interactive Employment Services (iES) website (http://www.jobs.gov.hk) recorded a historic high of 869 million page views in 2005. This is not only the Government's most popular website, but has also won the Champion of 2005 Civil Service Outstanding Service Award Scheme — e-Service Team Award.

 
The Labour Department's recruitment forum is well-received by job-seekers. The Labour Department's recruitment forum is well-received by job-seekers.
   

Work Trial Scheme

1.3 This scheme was launched in June 2005 to enhance the employability of job-seekers who have special difficulties in finding jobs. The Labour Department and the participating bodies will offer allowance to participants upon their completion of the one-month work trial.
   
Youth Self-employment Support Scheme (YSSS)
1.4

With a funding of $30 million, the YSSS was launched on a trial basis in May 2004 to train and assist 1 500 young people aged 18 to 24 to become self-employed in areas with business prospects, such as information technology and multimedia applications, personal care and public performances. As at the end of September 2005, the trainees had conducted 10 443 business transactions with gross profits of more than $5.1 million.

   
Youth Work Experience and Training Scheme (YWETS)
1.5 To cater for the employment needs of youths (in particular those living in remote areas), the YWETS office staged a series of four job fairs in March and April 2005 at Kwai Fong, Yuen Long and Tin Shui Wai in cooperation with nine non governmental organisations (NGOs) with local service centres in North-West New Territories. Some 5 300 job-seekers attended the job fairs.
 
Many employers and representatives of NGOs take part in the job fair held by the Labour Department for youths in remote areas. Many employers and representatives of NGOs take part in the job fair held by the Labour Department for youths in remote areas.
   
Youth Pre-employment Training Programme (YPTP)
1.6 To promote public understanding of the YPTP, we engaged TVB in producing a 30-minute programme for broadcast in August 2005. Among others, the programme highlighted the prize presentation ceremony of this year's "Most Improved Trainees" of the YPTP, which is a major annual event for awarding trainees who made significant improvements in self-development, leadership, social and community services. The programme featured the success stories of our winners, thus projecting a positive image of the YPTP.
 
Group photo of the ten 'Most Improved Trainees' of the YPTP at the Prize Presentation Ceremony. Group photo of the ten "Most Improved Trainees" of the YPTP at the Prize Presentation Ceremony.
   
The "I Can Make It" Show
1.7 The YPTP and YWETS co-organised the "I Can Make It" show in October 2005 to encourage trainees to realise their potentials to "fly high" and to set goals for their life and career. The Chief Executive was the officiating guest at the event. He gave encouragement and lent support to youths enrolled in the two schemes. Trainees who were engaged in different industries took part in the "Youth Employment Parade" to reinforce the "can do" spirit and to bring home the message of "I Can Make It". The event was highly praised by training bodies, employers and trainees.
 
Chief Executive Mr Donald Tsang Yam-kuen at the 'I Can Make It' Show. Chief Executive Mr Donald Tsang Yam-kuen at the "I Can Make It" Show.
   
Outstanding Disabled Employees Award and Enlightened Employers Award
1.8 These awards are to commend employees with disabilities for their outstanding performance at work and employers for their efforts in providing employment opportunities for people with disabilities. In 2005, twelve disabled employees and ten employers won the awards.
 
Member of the Executive Council Mr Bernard Chan (seventh from left) presents the 'Outstanding Disabled Employees Award' to 12 winners. Member of the Executive Council Mr Bernard Chan (seventh from left) presents the "Outstanding Disabled Employees Award" to 12 winners.
 
Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung (fifth from left) presents the 'Enlightened Employers Award' to winners. Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung (fifth from left) presents the "Enlightened Employers Award" to winners.
   

Labour Relations

Record High Settlement Rate

1.9 The number of working days lost as a result of labour disputes in Hong Kong is among the lowest in the world. Of the 237 labour disputes and 25 952 claims handled in the year, 69.8 per cent were resolved by our conciliation efforts, a record high since 1994. The waiting time for conciliation meetings was 2.4 weeks, shortened by almost one week when compared with 3.3 weeks in 2004.
   
Stepping Up Enforcement Against Wage Offences
1.10

In 2005, the Labour Department sustained its all-out efforts to combat wage offences. Territory-wide inspection campaigns targeted at offence-prone trades were launched. We set up an early warning system in collaboration with trade unions and launched a pilot exercise codenamed Operation COMBAT to tackle wage default problems in the catering industry.

The department initiated amendments to the Employment Ordinance in December 2005 to raise the maximum penalty for wage offences to a fine of $350,000 and imprisonment for three years. The new penalty will take effect from March 30, 2006. The Employment Claims Investigation Division continued to conduct in-depth investigation into suspected wage offences. Former veteran police officers were also recruited to strengthen the investigative work and collection of intelligence in order to take out speedy prosecution. The department adjusted its enforcement strategy such that prosecution would also be taken out against company directors who willfully delayed payment of wages.

The department also stepped up its educational and promotional efforts to remind employers of their statutory obligation to pay wages on time and to encourage employees to lodge claims promptly and come forward as prosecution witnesses.

With rigorous enforcement efforts, a total of 587 convicted summonses on wage offences were secured in 2005; an all-time high and up 16.5 per cent over the figure of 504 summonses in 2004. A company director and two other employers were given jail sentences for defaulting wage payments. This was the first time employers and a company director were imprisoned for wage offences. In addition, two employers who committed wage offences were also sentenced to jail after they failed to pay the court as ordered. The highest fine recorded in a case involving wage offences in 2005 was $120,000.

   

Promotion of Good People Management

1.11 To sustain the momentum of Good People Management Award 2004 and to continue promulgating good people management practices, the Labour Department and the Labour Advisory Board jointly organised a large-scale seminar in June, 2005. Award-winning establishments were invited to share their enlightened practices with other employers, human resources professionals and trade unions. The seminar featured such popular topics as labour-management communication, staff retention and corporate social responsibility.
 
Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung (middle) and members of the Labour Advisory Board co-officiate at the Seminar on Good People Management. Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung (middle) and members of the Labour Advisory Board co-officiate at the Seminar on Good People Management.
   

Employee Rights and Benefits

Vigorous Enforcement against Illegal Employment

1.12 In 2005, the Labour Department mounted more intelligence-led operations with the Police and the Immigration Department to clamp down on illegal employment activities. The number of such operations reached 176, up 69 per cent as compared to 104 in 2004. A total of 237 employers suspected of employing illegal workers were arrested in the joint operations, an increase of 21 per cent over the corresponding figure in 2004. The number of suspected illegal workers arrested stood at 538.

In the year, we intensified our educational efforts to warn against illegal employment through newspaper advertisements, press releases, posters, leaflets and bus advertisements. We also widely publicised the complaint hotline (2815 2200) to encourage reporting of illegal employment activities.
 
Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung (second from right) presents plaques to three security guards, commending them for helping the Government combat illegal employment. Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung (second from right) presents plaques to three security guards, commending them for helping the Government combat illegal employment.
   
Safeguarding the Rights of Employees of Government Service Contractors
1.13 We have stepped up inspections to workplaces of non-skilled workers employed by government service contractors in order to protect their statutory rights and benefits under labour laws. The number of inspections conducted in 2005 was 786, up 30 per cent over 604 in 2004. We took out resolute prosecution against contractors who breached the laws. A total of 11 contractors were convicted on 73 summonses, a 17-fold increase as compared to four convicted summonses (involving three contractors) in 2004.

In the year, we implemented a standard employment contract (SEC) for government service contractors to sign with their non-skilled employees. The SEC, which sets out clearly the employment terms, helps safeguard the rights and benefits of these workers.
   
Improvements to the Employees' Compensation Insurance System
1.14

The Labour Department reviewed the employees' compensation insurance system in Hong Kong and consulted the Labour Advisory Board in 2005 on ways to improve the system. As a result, the insurance industry undertook to implement a number of improvement measures, including the setting up of a residual scheme to provide employees' compensation insurance cover to employers who cannot obtain such cover from the market; facilitating the rehabilitation of injured workers; and assisting in the promotion of occupational safety and health.

   
Protection of Wages on Insolvency Fund
1.15 The Labour Department adopted a proactive approach to clamp down at source on employers evading their wage liabilities, thus preventing wage defaults from developing into claims on the Protection of Wages on Insolvency Fund. Coupled with continual improvement in the economy, the number of applications for the Fund decreased from 13 631 in 2004 to 9 967 in 2005, a record low since 1997. The Fund registered a surplus of $259 million for 2005, the second year that the Fund recorded a surplus since the Asian financial crisis in 1997.
   

Safety and Health at Work

Legislative Improvements to Protect Health Care and Poultry Workers

1.16 In February 2005, two notifiable occupational diseases, namely Severe Acute Respiratory Syndrome (SARS) and Avian Influenza A, were added to Schedule 2 to the Occupational Safety and Health Ordinance to protect workers including health care and poultry workers.
   

Safety of Renovation and Maintenance Works

1.17 To follow up on the findings of a study on the trend of industrial accidents in 2005, the Labour Department has intensified enforcement actions on minor renovation and maintenance works. Occupational safety officers stepped up point-to-point inspections on normal working days, at night and during holidays to clamp down on offending contractors. The Labour Department has also enhanced liaison with the Hong Kong Association of Property Management Companies by setting up a reporting system on the renovation and maintenance works of buildings under their management. In 2005, a total of 421 enquiries/complaints/referral cases were received through the system. As a result of follow-up inspections by occupational safety officers on these cases, 102 suspension/improvement notices were issued and 88 prosecutions were taken out.
   

Safety Award Schemes

1.18 Two safety award schemes were organised in the catering and construction industries to inculcate a safety culture and to enhance the safety awareness of employers, employees and their families. The schemes featured a variety of activities, including safety performance competitions, safety and health seminars, roving exhibitions, site visits, radio programmes, stickers, computer CD-ROM, broadcast of promotional films on "RoadShow" and award presentation ceremonies cum fun days.
 
Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung officiates at the Award Presentation Ceremony of the Catering Industry Safety Award Scheme. Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung officiates at the Award Presentation Ceremony of the Catering Industry Safety Award Scheme.
 
Officiating guests tour around the game booths on the fun day of the Construction Industry Safety Award Scheme. Officiating guests tour around the game booths on the fun day of the Construction Industry Safety Award Scheme.
   

Strengthening Local and International Partnerships

Labour Day Reception

1.19 On 29 April 2005, the Secretary for Economic Development and Labour hosted a cocktail reception at Government House to celebrate Labour Day and to pay tribute to the workforce. Acting Chief Executive Mr Donald Tsang Yam-kuen officiated at the reception, with guests from trade unions, employer associations and other organisations.
 
Acting Chief Executive Mr Donald Tsang Yam-kuen officiates at the Labour Day Reception. Acting Chief Executive Mr Donald Tsang Yam-kuen officiates at the Labour Day Reception.
   
Contacts with Other Labour Administrations
1.20 We maintain active liaison and interflow with other labour administrations through visits and participation in relevant activities. In March 2005, Vice Minister of the Ministry of Labour and Social Security of the State Council Mr Wang Dongjing visited Hong Kong to exchange views and experience on labour issues with the Labour Department.
 
Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung (fourth from right) meets with Vice Minister Wang Dongjing (centre) and his delegates. Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung (fourth from right) meets with Vice Minister Wang Dongjing (centre) and his delegates.
   
1.21 In June 2005, Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung led a tripartite team comprising government, employer and employee representatives to attend the 93rd Session of the International Labour Conference in Geneva as advisers to the delegation of China. The opportunity enabled the representatives to keep abreast of the latest development of international labour matters, and to liaise with officials of the International Labour Organization as well as their counterparts in the employer and employee sectors.
 
Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung (front row, centre) and members of the tripartite team attend the 93rd Session of the International Labour Conference in Geneva, Switzerland. Permanent Secretary for Economic Development and Labour (Labour) Mr Matthew Cheung Kin-chung (front row, centre) and members of the tripartite team attend the 93rd Session of the International Labour Conference in Geneva, Switzerland.