22 November 2012
The Hon. Matthew Cheung Kin-chung
Secretary for Labour & Welfare
Government of the Hong Kong Special Administrative Region
Dear Mr Cheung,
The Legislative Council has rejected the motion on “Legislating for the Regulation of Working Hours.” Legislators feel more time is needed to thoroughly discuss and understand its implications before making any decision on whether Hong Kong should proceed down this path or not. We, the industrial and business sectors, totally agree with their decision. One of the key reasons why Hong Kong has earned itself the title as the world’s freest economy is because of the flexibility and efficiency of its labour force. The far-reaching implications of regulating standard working hours have the potential to rock the fundamentals which have underlined Hong Kong’s success.
Experience in other countries/regions shows that one of the fundamental purposes of establishing standard working hours is to create more jobs and reduce unemployment, and hence limits are placed on the total hours employees work within a given period of time. The business community sees Hong Kong as a service economy with a highly liberal economic system in an environment quite different from that of overseas countries or regions. Should a standard working hours system be established, it would be detrimental to the steady and robust growth of Hong Kong’s economy.
While we agree that the long working hours prevailing in the labour market needs to be addressed, any proposed solution must take into account Hong Kong’s competitiveness, manpower supply, business productivity, flexibility and many other pertinent factors.
One Size Cannot Fit All
It is general knowledge that most countries introduced standard working hours during the heyday of theirindustrial development. Hong Kong is, however, one of the most service-orientedeconomiesin the world. This means other countries or regions’ experienceswith standard working hours might not work for us. Regulating standard working hours broadly refers to setting the standard number of working hours per day/week/month/quarter/year, which are definitely not the maximum. The business community considers this definition somewhat misleading and narrow. Realistically, it is simply too difficult to set “standard” working hours for different industries in a free economy. Additionally,with today’s technological advances, employees (especially in the service sector) may work beyond office hours at home or in vehicles, adding to the difficulty of calculating the actual number of working hours.
As the world’s freest economy, Hong Kong should allow employers and employees to negotiate the provisions of their employment contracts, with working hours included, and then fulfil their contractual obligations. After the enactment of the Minimum Wage Ordinance, legislating to cap working hours would compromise businesses’ flexibility, and the liberal economic system which has long appealed to investors would be harmed as well.
Dilemma For SMEs
Hong Kong’s success stems from the efforts of our SMEs, which serve as the backbone of our economy. The Statutory Minimum Wage (SMW), which came into effect last year, has had a limitedimpact on businesses’ operations. However, introducing Standard Working Hours (SWH) will impact the entire economy and severely limit our flexibility and adaptability, which are traditionally Hong Kong’s greatest strengths. This year, Hong Kong’s economy has had to face many internal and external economic challenges. SMEs already have difficulties managing the rising pressure of increasing operating costs. Whether it is resources or capabilityconstraints, SMEs are struggling to cope with the extra labour costs. Moreover, they simply do not have big corporations’ resources and scale to manage more labour regulations.
Employees Will Suffer As Well
Supporters of the SWH argue that it would increase employment and relieve staff from having to work excessive hours. However, we believe that since the implementation of the minimum wage, companies have already reduced working hours by introducing technology, which has also reduced their headcount and overall operating costs. The SWH would exacerbate this trend, and companies may be forced to hire temporary or part-time workers to ensure they do not have to manage excessive overtime pay claims. Finally, older workers and less educated workers, in particular, will suffer. We urge the Government not to underestimate the major implications of SWH that will unintentionally harm our economy, and grassroots workers.
AddressingThe Long Working Hours Issue
The long working hours in the labour market is a phenomenon in Hong Kong that has existed since its birth, and its causes are complex. For instance, there is insufficient manpower in certain industries. Limiting employee’s working hours across the board may end up exacerbating manpower shortagesin these industries. In view of this, we urge the Government to collect and analyze relevant data on the impact and problems of excessive working hours encountered by specific industry sectors and job categories; and to work with industry sectors to come up with feasible solutions.
We also suggest introducing measures that boost efficiency – through investment in training and life-long education – to increase productivity. Through training and life-long education, we can improve the efficiency of young and low-skilled employees, although improving the efficiency of older workerswill be more difficult.
Matching job requirements with the right talent, introducing flexible working hours, promoting a culture of work-life balance, as well as improving talent cultivation and talent admission schemes should all be considered. By understanding and respecting each other, and taking into consideration circumstances of different trades, employers would support work-life balance policies. Employers and employees should join hands to develop family-friendly measures that meet the aspirations and needs of both parties.
Co-signed (In no particular order):
Hong Kong General Chamber of Commerce
Federation of Hong Kong Industries
The Chinese Manufacturers’ Association of Hong Kong
The Chinese General Chamber of Commerce
The Real Estate Developers Association of Hong Kong
The Hong Kong Retail Management Association
Employers’ Federation of Hong Kong
Sign up for the latest news & offers.