TNAG-0966-FCO40-1185-Legislation-for-employment-in-Hong-Kong-1980 — Page 3

XCR (80)305

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(b) impose unduly heavy financial constraints upon smaller employers who needed a certain amount of flexibility in their employment practices which, although not strictly conforming with specific legislative provisions, never- theless provided a fair and equitable overall package for higher paid employees.

The Hong Kong Institute of Personnel Management further advised that a more cautious approach of progressively raising the wage ceiling should be adopted so that smaller employers could have time to adjust to the change.

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The four main employers' associations were also consulted. Only the Chinese Manufacturers' Association of Hong Kong was in favour of the complete removal of the wage ceiling. The Employers' Federation of Hong Kong recommended that the wage ceiling should be set at between $5,000 and $6,000 per month to cover the top level of clerical and secretarial grades, while the General Chamber of Commerce and the Federation of Hong Kong Industries considered that the level should be raised to correspond with the increase in the cost of living. All four employers' associations, however, proposed that the maximum level of monthly wages for severance pay under section 31G(2) of the Employment Ordinance should remain at $3,500 per month.

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Whilst it is Government's long term objective to remove the wage ceiling for non-manual employees in the Employment Ordinance so that all employees, whether manual or non-manual, will be brought under the protection of the Ordinance (as is now the position under the Employees' Compensation Ordinance), in view of the objections outlined in paragraphs 3 and 4 above, the Commissioner for Labour proposed as immediate measures -

(a) to raise the wage ceiling for non-manual employees in

the Employment Ordinance to $6,000 per month to keep it in line with the increase in the cost of living (Between September 1968, when the Employment Ordinance was first enacted, and March 1980, the percentage increase in the index of average daily wages for workers in industry was 378.6%. As the wage ceiling was $1,500 per month in 1968, it should therefore now be raised to $5,680, say $6,000);

(b) to review the wage ceiling for non-manual employees

biennially; and

(c) not to introduce a separate maximum level of monthly wages for the calculation of severance payments.

G.S. 84

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