CHAPTER
7
OCCUPATIONAL
BENEFITS
7.1
One of the features of employment in recent years has been the growth of occupational benefits, the main types of which have been noted in Chapter 3. Some benefits have developed because of legislative compulsion, others for different reasons, such as the need to attract and retain staff and to compete with the benefits provided by overseas companies operating in Hong Kong. This growth raises the question of the role which such benefits should play in the development of social security, whether on a compulsory or a voluntary basis. The relevant benefits are those relating to sickness, injury, unemployment, death in service and retirement.
The role of occupational benefits in general
7.2
The role of occupational benefits, especially retirement benefits, within the social security structure varies from country to country. In most European countries, the emphasis has been on the provision of social security benefits by the Government; occupational benefits have tended to be a bonus enjoyed by a minority of employees, often white collar workers or those employed by the Government or by quasi Governmental bodies. But in North America, Japan, Scandinavian countries, West Germany, Switzerland, Holland, Ireland and particularly the United Kingdom occupational benefits have played a more important role. In the United Kingdom and Japan, there are arrangements to permit employers with good retirement benefit schemes to contract-out of part of the state pension scheme.
7.3
The characteristic feature of occupational benefits is that they are provided on a voluntary basis. It is true that some forms of social security are commonly required by law particularly in relation to injury at work, redundancy and absence from work through sickness. Hong Kong has examples of this, since the provision of workmen's compensation, severance payments and sick pay are statutory requirements. But there is no precedent, in any country, for requiring employers to provide a full range of benefit without any state run alternative.
7.4
While there may be advantage in enabling established occupational benefit schemes to enter into a partnership with a state scheme, if the employers concerned so wish, this does not mean that it would be desirable to make the provision of occupational benefits compulsory. Where there is already a well established scheme of sick pay or retirement benefits which is valued by its members, it is sensible to permit this to be an alternative to a state run scheme, especially if the alternative were to dismantle it. But such arrange- ments are exceptional, since employers are not normally in a position to offer the same assurance about future benefits as are Governments; this applies with particular force to maintaining the real value of benefits during an inflationary period. Accordingly, before any permanent role were assigned to occupational benefits in the development
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