May, 2007

LABOUR RIGHTS
Free Market and Lack of Democracy Leave Workers Vulnerable

Elizabeth Tang

(The author is the chief executive of the Hong Kong Confederation of Trade Unions [HKCTU].)

Less Pay, Longer Hours
Ten years since the handover of Hong Kong to China working conditions for many grassroots workers in Hong Kong have gone from bad to worse. According to a study by the Hong Kong Confederation of Trade Unions (HKCTU) on the change of workers' wages in Hong Kong in the past 10 years, all workers below supervisory grade have had their wages drop by 5 percent to 16.7 percent. Among them, more than 330,000, or close to 10 percent of the working population, earn less than HK$5,000 (US$639) per month today.

At the same time, working hours have lengthened. About 1.3 million workers work more than 50 hours per week. Furthermore, 77.4 percent of them do not receive any compensation for overtime. According to a report of the International Labour Organisation (ILO), Hong Kong workers work 2,287 hours per year on average, compared to 1,807 hours in Japan and 1,446 hours in Germany.

In addition, the workplace is not safer with more than 200 cases of accidents per day compared to the figure 10 years ago, and women continue to face discrimination at work due to their age, pregnancies or family responsibilities. Moreover, a wage cut of HK$400 (US$51) per month was imposed on the 200,000-strong migrant domestic workers in the community in 2003. Until today, the government shows no intention to raise it back to the original level of four years ago despite an economic recovery for two consecutive years.

All these indicators point to the fact that the grassroots and vulnerable workers are facing increasing hardship, resulting in a deterioration of their livelihood and that of their families. The basic problem is that workers in Hong Kong have very few rights as reflected in laws. Even today, there is no legal protection regarding a minimum wage and working hours. Traditionally, working conditions have been products of the free market. Any proposal, or even discussion, on improving labour protection is frequently attacked as interference in the free market.

Consequently, social inequalities are growing with the gap between the rich and poor widening, so much so that it has become the highest in Asia as shown by the Gini Coefficient Index. Compared to 1997, the lowest income group's earnings in 2003 had fallen by 14 percent while that of the highest income group had risen by 12.5 percent over the same period. Low pay and long working hours are twin problems faced by the "working poor." They work several jobs but still do not earn enough to resolve the problems created by their low income. Currently, it is estimated that 15.6 percent of the total working population, or 600,000 people in Hong Kong, can be categorised as the "working poor."

New Economic Environment Changes Structure of Labour
Since 1997, Hong Kong's people have experienced the Asian financial crisis, SARS and the eventual economic recovery. It was also the period of development of a globalised market economy at full force. Against a backdrop of rapid progress and the spread of information and communication technologies, the high-speed and free flow of financial capital and the emergence of China as the "world's factory," Hong Kong has evolved into a service-based economy. While the financial and property market continues to generate high-income jobs for skilled and professional workers, what is available to the majority of people is a wide range of low-end service jobs, such as cleaning, sales, restaurant servicing and catering and so on, offering very low pay and few benefits.

Affected by the present form of economic globalisation, businesses face increased competition and a lower investment horizon. To the business community, the Asian financial crisis from 1998 to 2000 was a wake-up call to this reality. Confronted with a "win-or-lose" proposition, businesses have begun to organise themselves on a more flexible basis. Workplace organisation has thus displayed great variations in working hours, wages and the size of the work force. All of these aspects of production are to be adjusted at different stages of the production cycle.

Consequently, there has been a rapid growth of causal employment, leading to the growth of irregular workers, disguised workers and self-employed workers. They include many workers, ranging from the more traditional workers-drivers, construction workers and sales assistants-to modern ones-product promoters, beauticians and massagers. The income of these workers is piece-rated, and they may or may not have employers and hence have little or no other benefits. In addition, domestic helpers belong to a significant new form of atypical workers in the last decade-female and highly flexible with working hours ranging from three hours to 48 hours per week.

Irrelevant Labour Laws
Moreover, because of their status or working hour arrangement, many workers fall outside the protective legal framework. The Labour Ordinance only provides legal protection to workers who satisfy the 4.18 requirement, referring to continuous employment of four weeks with minimum working hours of 18 per week. This stipulation illustrates the growing irrelevance of the existing legal framework to protect workers today in Hong Kong.

The force of the globalised market economy and the obsolescent legal framework strip workers of their rights and welfare. This experience is shared with many workers in other parts of the world. However, in Hong Kong, workers are vulnerable because they have lost their weapons to defend themselves and to identify solutions collectively.

Shortly after the handover in 1997, the then-Provisional Legislative Council abolished the new-born legislation on the recognition of unions and collective bargaining. Trade unions are workers' organisations though. Their counterparts in many countries of the world belong to trade unions; and through them, they defend and improve their rights and benefits collectively. Similarly, in Hong Kong, had there been a collective bargaining mechanism in place, during bad times, such as the Asian financial crisis and the outbreak of SARS, and the good times of economic recovery, workers could have made use of it to negotiate with their respective employers over their wages, working hours and other benefits. However, on the contrary, many workers who joined trade unions and took part in their activities have faced discrimination and even dismissal.

In spite of this less than ideal environment, many trade unions in the last 10 years have been registered, however. Within the HKCTU, the number of affiliated trade unions has grown from 42 to 85. This increase represents the unrelenting attitude of workers to seek ways and means to improve their livelihood. The lack of legal provisions on trade union rights and workers' rights weaken their organisations, however.

Political System Contributes to Workers' Marginalisation
The abolition of the legislation on union recognition and collective bargaining has been a violation of labour rights and trade union rights in its crudest form. The fundamental problem in Hong Kong is the lack of a democratic political structure and the government's decision-making process. After the handover, Hong Kong's mini-constitution-the Basic Law-prescribes how Hong Kong is to be ruled: executive-led and with no date on universal suffrage. As a result, only half of the Legislative Council (Legco) seats today are directly elected. With restrictions on the introduction of private members' bills and the bicameral voting arrangement on all bills, the decision-making process is firmly within the control of the government. It is therefore not surprising to find that the HKCTU, even though its president and general secretary have been members of Legco during the last 10 years, has not been able to revive the legislation on union rights nor even to initiate any bills to improve conditions for workers and thus better their lives.

Over the years, the labour movement has been dominated by the struggle between two forces-the HKCTU, the independent centre, and the Federation of Trade Unions (FTU), the pro-Beijing centre. The struggle therefore is also between building and mobilising workers' collective power to defend and improve their rights, on one hand, and, on the other, containing labour to ensure social harmony and peace.

The FTU, established in 1949 by the Chinese Communist Party (CCP), has traditionally subjected itself to the dictates of the party. The founding of the Hong Kong Special Administrative Region (HKSAR) in 1997 gave it a renewed role and function, i.e., to represent the working class in Hong Kong. Its chairman, Cheng Yiu-tong, sits on the Executive Council, or cabinet, of Chief Executive Donald Tsang Yam-kuen. He is also a member of the National People's Congress (NPC). Moreover, the FTU occupies two of the three labour functional constituency seats. Even the Labour Advisory Board, a tripartite consultative structure on labour laws and policies, has rules for selecting labour representatives that have been designed in such a way that only FTU and FTU-sanctioned members are allowed. Needless to say, they are also found on all other bodies related to labour issues. Being part of the government and the CCP, there is an inherent contradiction for it to act as a voice and representative of workers. For example, its representatives in the Provisional Legislative Council voted in favour of abolishing the legislation on union recognition and collective bargaining in 1997.

Meanwhile, the HKCTU continues to be marginalised and is viewed as an anti-government element. In spite of obstacles, its constant increase in membership, its demonstration of strength in mobilising workers for public collective actions, securing two seats in Legco through direct election and its capacity to provide training for workers have together signified the popular support HKCTU enjoys.

The "one country, two systems" design for the rule of the HKSAR has resulted in a economic and political system with the worst of two worlds-the capitalist world and the world of one-party rule. In Hong Kong, Big Business or corporate powers and the executive-led HKSAR government have found each other to be a perfect match in pursuit of profit and their own vested interests. Without democratic structures and procedures, large businesses are free to employ whatever measures they deem efficient and convenient to ensure the largest returns to capital. In return, they support the government to maintain the system as it is and even use their influence to thwart any attempt to initiate change. This relationship and operation is so open and apparent that it is commonly termed "government and business collusion." Consequently, workers have fallen prey to this very collusion between free market exploitation and an undemocratic system of government.

Despite the general decline in workers' rights and welfare, there are signs of hope and possibilities for change. The fact that the HKCTU membership has continued to grow points to the fact that workers are not content with how they are being treated and have taken steps to bring about change. Many workers who form or join unions have said that they feel they have been pushed into a corner and left with no choice. Indeed, those who have been through successive waves of wage cuts and other benefit cuts belong to this group of workers.

For HKCTU, its objectives and goals can be summed up in one word: democracy-political democracy and workplace democracy. The absence of either one leaves workers' rights unprotected.