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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 reaches of the statutory provisions and prosecution of offenders;
Processing employees' compensation claims;
Processing applications for 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 ECO and at 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 2015
Key Indicators of Work
6.9 We stepped up our efforts to safeguard the rights and benefits of employees through various activities in 2015. Some key indicators of work of this programme area were shown in Figure 6.1.
 
Amendments to ECO, PMCO and the Occupational Deafness (Compensation) Ordinance (ODCO)
6.10 In 2015, 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. The revised levels of compensation have taken effect since March 5, 2015.
 
Amendment to MWO
6.11 MWO was amended to increase the SMW rate by 8.3% from $30 per hour to $32.5 effective from May 1, 2015.
 
Proactive Efforts to Combat Wage Defaults
6.12 In 2015, 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.
 
6.13 In 2015, LD continued to step up prosecution against employers and responsible persons 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 persons whenever sufficient evidence was available.
 
6.14 In 2015, 696 summonses were heard in respect of wage offences. The number of convicted summonses was 521. Besides, LD secured convictions for 103 summonses relating to default of awards made by the Labour Tribunal (LT) or the Minor Employment Claims Adjudication Board (MECAB). During the year, one employer convicted of wage offences was sentenced to immediate imprisonment. Another employer and two company directors convicted of wage offences and offences of defaulting awards made by LT were sentenced to perform community service. In addition, a company was fined a total of $1,070,000, the highest fine ever recorded, for defaulting to pay its employees' wages for a prolonged period. These sentences disseminate a strong message to employers and company responsible persons on the seriousness of defaults of wages and awards made by LT or MECAB.
 
Vigorous Enforcement to Protect Employees' Rights and Benefits
6.15 We continued our vigorous enforcement efforts to ensure that the statutory rights of employees under labour legislation were well protected.
 
6.16 In 2015, labour inspectors carried out 143 037 workplace inspections to establishments in different trades to enforce labour laws (Figure 6.2), of which 38 601 inspections were conducted to check compliance with MWO.
 
6.17 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 75 616 inspections were conducted to enforce the statutory requirement. Employers failing to comply with the requirement were prosecuted.
 
6.18 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 694 inspections were conducted to the workplaces of such workers and 2 568 workers were interviewed to check contractors' compliance with labour laws.
 
6.19 To ensure compliance with the conditions under SLS, we investigated 62 complaints and cases on suspected irregularities involving imported workers. Items investigated included payment of wages, arrangement of working hours, etc.
 
Processing Employees' Compensation Cases
6.20 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.
 
6.21 In 2015, 51 917 employees' compensation cases, including 14 994 minor cases which involved sick leave of not exceeding three days, were received. At year-end, among the 36 923 fatal cases or non-fatal cases involving sick leave exceeding three days, 22 538 cases were settled. The amount of employees' compensation involved was $271 million. The remaining cases were pending expiry of sick leave, assessment of permanent incapacity or court judgment. (Figures 6.3 and 6.4)
 
6.22 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.
 
Briefings and Promotional Campaigns
6.23 In 2015, we arranged two briefings for government departments and 48 briefings for imported workers to publicise the rights and obligations of the parties concerned.
 
6.24 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.
 
6.25 During the year, we organised various publicity activities to promote the revised SMW rate and SMW legislation. These activities included: broadcasting television and radio Announcements in the Public Interest through different media; wide distribution and display of new leaflets and posters; inserting promotional message in electricity bills; publicising through different channels such as public transport, publications of target organisations, newspapers and internet platforms; and holding seminars and roving exhibitions, etc.
 
External wall banner to publicise the revised SMW rate and SMW legislation
External wall banner to publicise the
revised SMW rate and SMW legislation
 
Bus body advertisement to publicise the revised SMW rate and SMW legislation
Bus body advertisement to publicise the
revised SMW rate and SMW legislation
 
6.26 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 eight talks on ECO.
 
A seminar on the Employees' Compensation Ordinance
A seminar on the Employees' Compensation Ordinance
 
Partnership with Statutory Bodies
6.27 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)
6.28 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 to PWIF for ex gratia payment in accordance with PWIO. It is financed by a levy on the business registration certificates.
 
6.29 We provide administrative support to PWIFB, verify applications and approve payment from the fund. In 2015, PWIF recorded a rise in the number of employees who were owed wages and other statutory compensation owing to business cessation and who sought relief from PWIF. During the year, we received 3 486 applications and processed 3 227 applications, leading to payment of $61.6 million. A breakdown of applications received by economic sector was shown in Figure 6.5. During the year, PWIF recorded an annual surplus of $335 million.
 
6.30 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)
6.31 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 2015, 1 600 eligible persons were receiving compensation in the form of monthly payments from PCFB. In the year, PCFB made a total compensation payment of $188 million.
 
Launching Ceremony of PCFB's Conference on Understanding of Asbestos Containing Materials Cum 
Guidebook
Launching Ceremony of PCFB's Conference on Understanding
of Asbestos Containing Materials Cum Guidebook
 
Employees Compensation Assistance Fund Board (ECAFB)
6.32 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 2015, ECAFB approved 67 applications, leading to payment of $64.74 million. With effect from April 1, 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)
6.33 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 2015, ODCB approved 171 applications for compensation with a total compensation payout at $16.26 million and 572 applications for payment of expenses on hearing assistive devices with a total payout at $2.35 million. ODCB also provided 412 rehabilitation programmes for people with hearing impairment caused by their employment in specified noisy occupations.
 
Opening Ceremony of ODCB Roving Exhibitions 2015/16
Opening Ceremony of ODCB Roving Exhibitions 2015/16