TNAG-0872-FCO40-1082-Legislation-for-employment-in-Hong-Kong-1979 — Page 63

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XCR(79)52

with the proviso that the latter figure should be reviewed from time to time and revised in the light of increasing wages. However, most of the major employers' organisations subsequently disagreed with their representatives, objected to the proposed removal of the wage ceiling for non-manual workers and urged that it should be maintained at a level which would represent the cost of living change at that time, i. e. $2, 600 per month.

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In view of the employers' change of position, the Com- missioner for Labour considered it advisable to take the unusual step of again consulting the LAB even though they had previously arrived at a consensus. At the meeting in March 1978 it transpired that the employers' change of heart was basically caused by fears that strict application and enforcement of the Ordinance at the managerial level might have unpredictable effects. One member felt that paid managerial staff should not be forced to accept the kind of protection that was provided by the Ordinance. After considerable discussion the Commissioner for Labour proposed, as an interim measure, that the wage ceiling for non-manual workers should be raised to $5,000 per month (which is the same as the wage ceiling in the Workmen's Compensation Ordinance (Chapter 282)) but that the maximum monthly wages which might be taken into account for calculating severance payments should be set at $3,000. The employees' representatives asked for time to consider the proposal and replied two months later that they held to their previous view that the wage ceiling for non-manual workers should be abolished.

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It is clear that each side has taken a definite stand, and it is unlikely that they will shift from their positions. The Commissioner for Labour is not necessarily bound to accept the LAB's advice and after careful consideration, he has recommended that the law should be amended as proposed in paragraph 5 above. He has taken this view on the grounds that probably very few employees earning $5,000 per month or more are left seriously unprotected, and probably with additional research and time it may be possible to allay the fears of employers. It could well take a considerable period to devise a formula that would enable the wage ceiling for non-manual workers to be abolished with safeguards which would remove employers' fears. The need however to do something about the existing wage ceiling is urgent. But the long term aim will be to abolish the wage ceiling unless insuperable problems are discovered.

G.S. 84

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