ENG-2005 — Page 178

144 | Employment

Trade Unions

The Registry of Trade Unions administers the Trade Unions Ordinance and promotes sound and responsible trade union administration. Once registered, a trade union becomes a body corporate and enjoys immunity from certain civil suits.

In 2005, 28 new unions were registered, bringing the number of registered trade unions to 729 (comprising 686 employee unions, 21 employers' associations), and 22 mixed organisations of employees and employers). There were also three registered trade union federations. In the past five years, the declared membership of employee unions has stayed at around. 670 000 with the trade union participation rate at about 22 per cent.

About half of the employee unions are affiliated to four major labour organisations registered under the Societies Ordinance: the Hong Kong Federation of Trade Unions (158 unions), the Hong Kong and Kowloon Trades Union Council (36 unions), the Hong Kong Confederation of Trade Unions (68 unions), and the Federation of Hong Kong and Kowloon Labour Unions (55 unions).

Protection of Wages on Insolvency Fund

The Protection of Wages on Insolvency Fund provides ex gratia payment to employees who are owed wages and other termination benefits by insolvent employers. It is financed by an annual levy of $600 imposed on each business registration certificate. The fund covers arrears of wages not exceeding $36,000 accrued during a period of four months preceding the applicant's last day of service; wages in lieu of notice for termination of employment up to $22,500 or one month's wages, whichever is less; and severance payment up to $50,000 plus 50 per cent of any entitlement in excess of $50,000.

As Hong Kong's economy further improved, the number of applications for the fund continued to drop. During the year, the Labour Department launched proactive measures to clamp down at source on employers evading their wage liabilities, thus preventing wage defaults from developing into claims on the fund. The number of applications decreased from 13 631 in 2004 to 9 967 in 2005, a substantial drop of 27 per cent. The financial position of the fund also improved - a surplus of $259 million was recorded in 2005. During the year, the fund disbursed a total of $205 million to 10 444 eligible applicants.

Employees' Rights and Benefits

The Employment Ordinance provides for various employment-related benefits and entitlements for employees. On top of the statutory requirements, employers and employees are free to negotiate on the terms and conditions of their employment.

Since December 2000, all employers have to enrol their employees in Mandatory Provident Fund schemes in accordance with the Mandatory Provident Fund Schemes. legislation. The participation rate of the relevant employers in the schemes, which are regulated by the Mandatory Provident Fund Schemes Authority, reached 98.2 per cent by year-end.