Enacting legislation on standard working hours - (2015/06/03)

President, as a free economy, Hong Kong certainly allows various trades and industries to set their own number of working hours according to their actual circumstances. On the other hand, some wage earners really face problems of long working hours and a lack of standard working hours. Therefore, they continue to call for enacting legislation on standard working hours. In fact, a number of countries and places such as Europe, South Korea and Japan, have implemented standard working hours when the conditions were ripe. In general, they have set overtime pay at 1.25 to 1.5 times of the normal wage rate.

There are a number of advantages in enacting legislation on standard working hours. It will allow employees to make suitable arrangements regarding their hours of rest and work and provide them with reasonable overtime pay. Thus, the proposal will surely win the support of the majority of the public. But, why is a decision still pending despite various studies conducted on enacting legislation on standard working hours? Many Members, particularly Members from the labour sector, have all along suspected that the Government has slackened off or the business sector has resisted the proposal. In fact, due to Hong Kong's actual circumstances, a number of problems have to be thoroughly discussed before a balance can be struck between the pros and cons of the proposal.

First, implementing standard working hours will significantly increase the operating costs and impede the economic vitality and competitiveness of society. When compared with countries which have implemented standard working hours, Hong Kong's situation is different with regard to the background, conditions and timing, and we have to be more cautious. At present, the unemployment rate of Hong Kong has maintained at about 3.3% for a long time, which is close to full employment. Many trades have to face the problem of labour shortage and have to be flexible in staff deployment, the case is particularly so for the service industry. Given that workers will not be imported, if the Government rashly enacts legislation on standard working hours, enterprises have to employ additional staff to resolve the labour shortage problem. When various trades and industries compete for manpower, the tight supply of the labour market would be aggravated, making recruitment more difficult, and as a result, the standard of services provided by enterprises will certainly be greatly lowered and Hong Kong's competitiveness undermined.

Small and medium enterprises (SMEs) make up 98% of all enterprises in Hong Kong and they employ nearly 1.18 million employees. As wages account for 35% of the total operating costs, any significant increase in labour costs will undoubtedly exert a heavy burden on SMEs. Therefore, in promoting the enactment of legislation on standard working hours, we have to fully consider the capacity of enterprises, particularly SMEs, and assess whether their competitiveness will be undermined, resulting indirectly in the monopolization of consortia.

Second, implementing standard working hours will push up commodity prices and induce inflation. After the implementation of standard working hours, enterprises will have to employ more staff members and increase the rate of overtime pay in order to maintain their current scale of operation. The operating costs will surge and operators of various trades and industries will have to increase their prices to solve the problem. Inflation will certainly follow. Employees may have a pay rise as a result of inflation which will enable them to meet their basic daily needs, but the lives of the unemployed and the retirees will be greatly affected. With an ageing population in Hong Kong, there will be an increasing number of elderly people without income. If these people have to bear the burden of a soaring inflation rate and an ever increasing cost for daily necessities over a long period of time, the standard of their living will inevitably decline and the wealth gap will widen even further.

Third, implementing standard working hours will impose pressure on employees with long years of service. In order to reduce costs, some enterprises may consider reducing the number of overtime hours undertaken by employees with long years of service and whose salaries are relatively higher; they may even replace those staff with new recruits or part-time staff. In Japan, Korea, Australia and the United Kingdom, after the implementation of standard working hours, there is an apparent increase in the number job types being converted into part-time jobs so as to reduce the expenses on staff costs. For example, in Japan, the percentage of part-time staff has increased from 11.9% in 1993 to 16.6% in 2010.

Fourth, the inflexibility of standard working hours makes it difficult to implement in the tourism industry. As Members would know, the tourism industry provides a relatively wide scope of service and the working hours are more flexible than the service industry in general. For example, tour escorts or tourist guides may have to provide service 24 hours a day during an outbound tour and they may have to handle emergencies anytime. The escort has to be on call even in the small hours to meet the different needs of customers; he cannot say that "I am now taking rest" and ignore the customer's need. Employees working in the back office of a travel agent also have to be on call round the clock. Should an accident happen during the tour, or if a tour member has encountered problems such as failing to get on board, change of air ticket, change of itinerary, and so on, he may call the back office for help. Owing to the time difference, the employee may receive a request for help in the small hours, and he has to provide assistance immediately. Similarly, in providing services to customers, coach drivers may not be able to get off duty as scheduled owing to some unexpected incidents. For example, he is caught in a traffic jam or the tour group has run behind schedule for various reasons. It is inevitable that drivers have to work overtime.

People may say that exemptions can be given to the abovementioned jobs because of their special nature. However, in 2009, in the case of doctors in public hospitals claiming for overtime compensation, the Court of Final Appeal ruled that doctors on non-resident calls who had not been called upon to work at the hospitals could not be regarded as having taken a rest day or a statutory holiday. The Hospital Authority had to pay compensation leave or overtime allowance to the doctors and could not only pay nominal damages on the ground that they had not actually worked. Applying the same principle, if we have enacted legislation on standard working hours, when employees of a travel agent are on call outside office hours, will the employer have to pay for these hours during which no specific work has been assigned to the employees? I believe that Members will be hesitant to give an answer in the negative immediately. If the principle applies, travel agents will not be able to bear the great burden of paying overtime allowances. At present, the average profit margin of travel agents is lower than 10% and many may have to close down as a result. Therefore, if we implement standard working hours rashly, it will be disastrous for the tourism industry.

President, there is no free lunch in the world and everything has its pros and cons. While the labour sector is actively striving for the implementation of standard working hours, the Government has to listen to the views of the business sector. Just now, I have considered problems from the perspective of the tourism industry. I guess other trades similar to the tourism industry will face the same problems which are difficult to resolve. Certainly, I perfectly understand that as the society progresses, there will be gradual improvement in the salaries and benefits of employees. But, implementing standard working hours will have an extensive impact. Since the nature of various trades and industries differs greatly, there is no need to set a limit for all trades and jobs across the board. In fact, reference can be taken on the successful and unsuccessful experiences of countries which have implemented standard working hours for many years. In assessing whether the conditions of Hong Kong are suitable for implementing standard working hours, the Government should consider the unemployment rate of Hong Kong, the affordability of various trades and industries and the competitiveness of Hong Kong. There is no need for the Government to push the proposal forward with full knowledge of its many disadvantages. Therefore, in my amendment, I have proposed that in enacting legislation to set the number of standard working hours, the Government should fully consult various trades and industries, so as to avoid creating negative impact on society and the economy as a result of hasty enactment of legislation.

President, I so submit.