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LCQ12: Statutory minimum wage

     Following is a question by the Hon Leung Kwok-hung and a written reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, in the Legislative Council today (April 6):

Question :

     On March 22 this year, the Employers' Federation of Hong Kong (EFHK) placed an advertisement in the press, providing an example to illustrate that after the implementation of statutory minimum wage legislation, the salary of an employee who works nine hours per day for 23 days in a month and is currently paid $5,796 monthly will reach $8,456 per month, if rest days and meal breaks are included in the calculation of monthly wages.  As a result, the employer has to increase that employee's monthly salary by $2,660.  EFHK suggested that employers should, before May 1 this year, examine and revise the employment contracts of their monthly paid employees, and it might be necessary to state that meal breaks and rest days "should not be treated as if they are paid".  Quite a number of members of the public have relayed to me their worries that employers will, by "exploiting loopholes in the law", revise contracts to deduct employees' wages in respect of meal breaks and rest days.  In this connection, will the Government inform this Council:

(a) whether it has assessed if the deduction of employees' wages in respect of meal breaks and rest days is the legislative intent of the Minimum Wage Ordinance (Cap. 608); if it is, of the Government's stance on paid meal breaks and paid rest days; if not, whether the Government will publicly reprimand EFHK so as to safeguard the interests of employees in Hong Kong;

(b) whether it has assessed if the content of the aforesaid advertisement has violated the reference guidelines on statutory minimum wage made by the Government; if it has violated those guidelines, how the Government will follow up this; if not, whether the Government has assessed if there are inadequacies in the Minimum Wage Ordinance;

(c) whether it has assessed if EFHK's advertisement has abetted employers to revise employment contracts, so that they will not violate the Minimum Wage Ordinance even if employees' meal breaks and rest days are excluded from the computation of statutory minimum wage;

(d) whether there is any effective legislation to impose severe punishment on such employers who are "unscrupulous" and deliberately deduct employees' wages in respect of meal breaks and rest days; if so, of the legislation and the penalty concerned, and which government departments are responsible for enforcing the legislation; if not, whether the Government will enact emergency legislation to safeguard the interests of the employees in Hong Kong; and

(e) before the enactment of the Minimum Wage Ordinance, whether the Government has consulted Members of various political parties/groupings or independent Members of the Legislative Council on whether the deduction of employees' wages in respect of meal breaks and rest days is reasonable; if it has, which political parties/groupings or independent Members have concurred with such practice; if not, whether the Government will promptly "bring order out of chaos" with regard to EFHK's suggestion?



(a) - (c) The Minimum Wage Ordinance (MWO) establishes a statutory minimum wage (SMW) regime to set a wage floor, with the aim of striking an appropriate balance between forestalling excessively low wages and minimising the loss of low-paid jobs while sustaining Hong Kong's economic growth and competitiveness.

     Neither the MWO nor the Employment Ordinance (EO) prescribes that meal breaks and rest days are with pay or not.  These matters have all along been subject to the agreement between employers and employees.  If existing employment terms in these respects need to be clarified because they are unclear or employers have genuine problems in shouldering the financial burden, there should be thorough staff consultation with a view to gaining mutual understanding and reaching consensus on lawful, sensible and reasonable grounds through labour-management communication and negotiation.  According to the EO, employers should not unilaterally vary the employment terms and conditions of employees.  The Labour Department stands ready to assist employers and employees to resolve their problems and reach consensus.  If employees suspect that their employment rights have been undermined, they could seek help from the Labour Department.

     SMW is new to Hong Kong and it will take time for the community, especially employers and employees, to adjust to it.  We have prepared the Statutory Minimum Wage: Reference Guidelines for Employers and Employees to illustrate the provisions and application of the MWO.

     Employees are an enterprise's valuable asset.  We appeal to employers to treat their employees well so as to maintain harmonious labour relations and avoid affecting staff morale.  Employers should carefully assess the impact both on themselves and on the employees in contemplating any change to the employment terms.  Employers should not reduce employees' existing remuneration upon the implementation of SMW, and should not give employees a monthly pay lower than what they get before the implementation of the legislation.  Sufficient communication between employers and employees is necessary during SMW implementation.  

(d) All along, employers and employees may, depending on the circumstances of individual enterprise or personal needs, agree on their employment terms, including whether meal breaks and rest days are paid or not.  While the EO has no provision in these respects, if meal breaks or rest days are paid in accordance with their employment contracts or agreement, employers should not unilaterally vary the employment terms.  Otherwise, the employees may file claim against their employers in accordance with the EO.  The Labour Department will actively follow up the cases of employees who find their employment rights undermined.

(e) In the last legislative session, the Bills Committee of the Legislative Council deliberated the policy and content of the Minimum Wage Bill thoroughly, including the proposal of excluding the time that is not hours worked and the payment for such time from the computation of minimum wage.  The MWO as ultimately enacted has stipulated the relevant provisions.

Ends/Wednesday, April 6, 2011
Issued at HKT 14:07


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