TNAG-0647-FCO40-795-Study-of-labour-relations-in-Hong-Kong-by-Professor-H-A-Turn-1977 — Page 104

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larger employers; the ultimate pay adjustment resulting is, however,

taken as a major factor in the annual pay decisions of many other firms.

Since these include some which are in the PIU survey, the process is

often criticised as a circular one; but there seems no doubt that the

government pay increase is a major factor in the pay decisions of a

considerable number of smaller firms.

-

G

But

46. It seems generally accepted by employers that there is a lower

limit to their pay-decisions: broadly speaking, wage-rates must not be

cut (even in the severe 1974 recession, there appear to have been few

instances of direct wage-reductions though earnings were often

reduced by work-sharing or short-time). On the other hand, we were

commonly told that it was advisable to "keep ahead" of potential worker

demands in effect, to pass on some benefit of evident prosperity.

firms also had some insurances against miscalculations in wage-policy:

the system of New Year bonuses which appear highly variable in many

firms (at least for white-collar staff) and the frequent turnover of

piece-rates which permitted upward or downward adjustment of actual

hourly wages in much of manufacturing, for instance. While some larger

concerns had mutual agreements to avoid "poaching" of labour in

situations of anticipated scarcity.

47.

In effect, then, one might say that wage-movements are primarily

determined in Hong Kong by a system of overlapping mutual understandings

between major employers, which at the same time permits the individual firm a good deal of flexibility (particularly in relation to its

specific combination of wage-rates, pay-systems and non-wage benefits)

to meet its particular labour market requirements. As Prof Hart remarks,

therefore, that part of our terms of reference relating to "

impediments to the development of effective

employers' organisa-

tions" is (from an industrial relations viewpoint, at least) redundant.

Employers have as much organisation as they need for labour market purposes, and the development of collective bargaining would impose

rigidities on them which they would naturally dislike.

48. But from the workers' point of view, the situation equally carries

considerable disadvantages. While real wages have undoubtedly risen in

the medium term, the system conveys no guarantee that they will rise

equitably with profits still less, that they will contribute to a

reduction of transparent overall income inequality. There are

significant possibilities of authentic "exploitation" - ie in the

/Marshallian