In considering any extension of paid sick leave benefits under the Employment Ordinance it is felt that the current rate of payment at 2/3 wages must not be reduced, particularly as it now conforms with international labour standards prescribed in International Labour Convention No. 130. Other conditions proposed for consideration are:

(a)

(b)

a qualifying period of one month of continuous employment, as at present;

during the first three months, the employee should be entitled to two days' sick leave with pay per month of continuous employment;

(c)

(d)

(e)

(f)

starting from the fourth month, an employee should be entitled to four days' sick leave with pay per month of continuous employment;

sick leave could be accumulated up to a maximum of 120 days;

sick leave of less than four consecutive days should not be paid, as at present; and

termination of employment during paid sick leave should be prohibited.

Death Benefit

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Although the opinion survey did not indicate a strong demand for death benefits, it is obvious that families could be hard hit by the untimely death of a wage earner. It is considered desirable as a matter of social policy to accord this benefit a higher priority than indicated in the opinion survey. The death benefit scheme mooted by the Joint Associations described in paragraph 2 above would only be viable if it was covered by compulsory insurance. Since compulsory insurance for employees' compensation (which might be extended to cover death benefits) has not yet been implemented, an alternative arrangement would be necessary.

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Accordingly, it is proposed to include a provision under the Employment Ordinance requiring employers to provide the dependant survivors with a death grant at a flat rate of $3,000 in the case of the death of an employee during employment, provided that the deceased employee had satisfied a qualifying period of one year of continuous employment. The one-year qualifying period is proposed so that an employer will only be required to provide a death grant for an employee who has worked with him for a reasonably long period of time. The sum of $3,000 would be revised as and when the sum (currently also $3,000) payable by the employer for burial expenses or expenses of medical attendance on the deceased employee who has no dependants under Section 6(5) of the Employees' Compensation Ordinance is reviewed or adjusted. However, the employer would be absolved of his liabilities if he has paid compensation to dependant survivors of an

CONFIDENTIAL

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