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Employment (Amendment)(No 2) and (No 3) Bill 1995

Following is the speech by the Secretary for Education and Manpower, Mr Michael Leung, at the resumption of second reading debate for Employment (Amendment)(No 2) Bill 1995 and the Employment (Amendment)(No 3) Bill 1995 in the Legislative Council today (Wednesday):

Mr President,

May I first of all begin by thanking Members who have given credit to the Administration in trying to reach a consensus on these two proposals. I fully appreciate these comments and hope this will set a pattern for future co-operation between us on labour issues and other issues.

I would like to speak on both bills in definition. On the No. 2 Bill, the Long Service Payment scheme was introduced in 1986 to provide financial protection to long-serving and elderly employees who were dismissed. Since it came to operation, the Scheme had been amended six times to take into account the changing needs of the labour market and developments of our economy. As Members recall, the last major amendment exercise was done in January this year, when a comprehensive and forward-looking package to increase both the length of reckonable service and the absolute payment ceiling within a definite timetable was devised and agreed. This was then followed by the increase in the monthly wage ceiling for calculating LSP through a resolution of this Council in June. These and all previous amendments were invariably made in accordance with the broad consensus between representatives of employers and employees in the Labour Advisory Board (LAB) a long established and well-tested forum for discussions of labour matters affecting both employers and employees. We are very pleased to see that in this case, this Council has supported the approach to consult the LAB first before coming back to this Council.

During the past three months, we have thoroughly consulted the LAB on the proposals in the Bill and the Board subsequently agreed a consensus on each of them.

First, on the qualifying years of service for eligibility for LSP on grounds of old age, the LAB has proposed to reduce the qualifying years of service from 10 to 5 while maintaining the retirement age at 65, as it would improve the financial protection for the elderly employees without adversely affecting labour supply by inducing pre-mature retirement.

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