CONFIDENTIAL
Equally important is the probable effect of reducing the present high rate of labour turnover, since workers will be more reluctant to change jobs if they would thereby lose an entitle- ment to severance pay. High labour turnover is a source of anxiety and expense to many employers and it is significant that a number of textile manufacturers have entered into long service gratuity schemes which entitle any worker who has completed two years service to a gratuity of HK$500. (A specimen agreement has oeen left with the Commissioner of Labour.) It has to be recognised that under Hong Kong conditions the smaller employers may have difficulties in meeting this kind of obligation and consideration could accordingly be given to excluding, say, employers with less than five employees.
Labour Courts
11. It is unfortunate for Britain that when Mr Lloyd George and Mr Winston Churchill were laying the foundations of the welfare state in the period 1909-1913 and copying much of the existing German system of old age pensions; sickness insurance, and labour exchanges, etc, they did not take over also the concept of the Labour Court. Many of the United Kingdom's industrial relations difficulties since might thereby have been avoided. The Industrial Court and the Industrial Tribunals set up under the Industrial Relations Act 1971 will go some way to filling the gap. In Hong Kong a more modest but very worthwhile proposal is in process of implementation - a simple form of machinery outside the usual courts to determine claims as of right under contracts of employment or statute. Problems of nomenclature have yet to be resolved. Summary Civil
Courts has been suggested as a title but hardly describes what the Government has in mind. The Cantonese expression used is perhaps more important than the Fnglish and the Commissioner of Labour will be consulting with his colleagues to find a suitable title more closely consonant with the expression "Labour' Court". With luck, a final draft of the Bill should be ready early in 1972. But, as was pointed out by the Solicitor-General at a meeting on 10 December 1971, there are a large number of administrative matters to be settled if the "Labour Courts" are to function during 1972, eg premises, staff and financial provision.
12. As already mentioned, about 25% of all disputes dealt with by the Labour Relations Service of the Department of Labour concern payments due to workers on termination of employment, and it is this type of case which it is hoped will be quickly and informally disposed of when the "Labour Courts" are established. It is impossible to guarantee in advance that these Courts will be much used; but their mere existence should help the Department of Labour to secure more equitable settlements by conciliation.
Hours of Work and Overtime for Women and Young Persons
13.
The following quotation from the 1950 Annual Report of the Labour Department was referred to by me in 1965 when
5
CONFIDENTIAL
Page 15Page 16