Motion on “Conducting a Comprehensive Review of Labour Legislation to Improve Labour Rights and Interests” (2018.03.22)

MR CHAN KIN-POR (in Cantonese): In today’s debate on labour legislation, Members have expressed many different views. A few of them were extremely controversial, while some others were useful suggestions on which I remain open-minded. As a matter of fact, I consider some recommendations worthy of expeditious implementation, such as reviewing the work procedures and necessary safety measures for work-at-height. This type of fatal industrial accidents occurs from time to time in Hong Kong. I understand that the Government attaches great importance to industrial safety, but human lives are of paramount importance. It should adopt more stringent measures to prevent the recurrence of such tragedies.

I always believe that the relationship between employers and employees is one of partnership and coexistence instead of rivalry as the latter will only lead to losses to both sides. As long as employers and employees can develop mutual trust and understanding, many problems can be dealt with more effectively. The many suggestions made by Members today, some being disputable while some others being proactively feasible, can be implemented only when a consensus is reached. Employers and employees should sit down and hold discussions as unilateral proposals will not help the cause. In fact, an effective framework, that is the Labour Advisory Board (“LAB”), is in place in Hong Kong. In the past, labour policies were put forward only after LAB had reached a consensus on them. Although discussions did take time, achievements could actually be made. Through discussions, employers can understand the needs of employees, while employees can have a better idea of employers’ affordability. In this way, mutual understanding can be achieved to resolve conflicts. For this reason, I hope the prevailing labour issues can continue to be discussed in LAB and we should create a favourable environment which facilitates smooth discussions between employers and employees.

Insofar as the offsetting mechanism under the Mandatory Provident Fund (“MPF”) System is concerned, we must return to the negotiation table as the proposal put forward by the last-term Government was not acceptable to all. As I said earlier on, discussions on such a major labour issue should be held by employers and employees with the assistance of the Government. As I have said repeatedly, the offsetting mechanism has great impact on the grass roots. However, the abolition of the mechanism will deal a serious blow to small and medium enterprises. Besides, the Government has undertaken to include the offsetting mechanism when introducing MPF in exchange for the support of the business sector, and thus the view of the business sector on the abolition of the offsetting mechanism is not groundless. Therefore, employers and employees should make holistic considerations so as to find a win-win solution and refrain from acting impulsively.

In addition, some Members have proposed to establish a central occupational insurance compensation fund under which they believe both employed and self-employed persons can be fully compensated in the event of injury or death on duty or occupational disease. In fact, studies on a central employees’ compensation fund were conducted by the Government back in 2004. Subsequently, the Government adopted the Employees’ Compensation Insurance Residual Scheme advocated by the insurance sector to provide a last resort to employers engaged in high-risk trades to ensure that they would be able to take out insurance in the private market. The Government did not adopt the central employees’ compensation scheme in the end as it was fraught with shortcomings. Not only was it unable to address the prevailing problems, it would even jeopardize the rights and interests of employers and employees.

The most fundamental problem is losses. Due to cases of fraud by unruly elements for insurance compensation in recent years, insurance companies have been operating employees’ compensation insurance at a loss. A loss of $2.3 billion in total has been recorded in the past six years, around $380 million per annum on average. The insurance sector deals with the loss by, subject to regulation, investing the premium and using the revenue from other types of profitable insurance to cross-subsidize employees’ compensation insurance in order to obviate the need of substantially raising the premium at once. Comparatively speaking, a central compensation scheme lacks market flexibility, and thus a substantial increase in premium is required in the event of losses, which will exert immense pressure on both employers and employees. Subsidies from the public purse may be required eventually. Meanwhile, public organizations offer higher salaries than the private sector but their efficiency is actually lower. Therefore, setting up a central employees’ compensation insurance scheme will not bring about a drop in premium. Quite the contrary, it will cause the entire system to become bureaucratic, which will do enormous harm to employees and employers.

Currently, employers in Hong Kong pay a relatively low premium for employees’ compensation insurance, yet employees can enjoy one of the most comprehensive protection and benefits in the world. According to the study back then, although Hong Kong employees have unrestricted access to claims for damages, the premium paid by Hong Kong employers amounts to 1% of the payroll on average, which is lower than the premium rate in areas which operate central employees’ compensation insurance schemes. Therefore, I do not agree with the proposal for establishment of a central compensation scheme.

In fact, available resources should be first invested in work-injury rehabilitation. Studies have shown that workers suffering from work injuries can recover and resume work most expeditiously if they can seize the golden period for treatment through occupational therapy and physiotherapy coordinated by doctors and discuss work resumption arrangement with employers through the assistance of social workers. The Hong Kong Federation of Insurers launched a work injury rehabilitation programme in 2012 in collaboration with the Department of Orthopedics and Traumatology of The Chinese University of Hong Kong. The programme, named Multidisciplinary Orthopedics Rehabilitation Empowerment (“MORE”), has 390 participating workers with back injuries. Results have shown that participating workers required 8.5 months of treatment on average before resuming work, while those who did not participate in the programme required 16 months before resuming work. It can then be seen that workers who had participated in the programme could resume work almost six months earlier. The merits of the programme are, therefore, evident. Some analyses stated that the policy on work injury in Hong Kong emphasizes compensation but fails to take into account employees’ needs and willingness to resume work. Therefore, although the programme requires enormous resources, it should be examined in depth by the Government and employers.

I so submit.

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