ENG-2006 — Page 169

Employment ❘ 137

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 2006, 32 new unions were registered, bringing the number of registered trade unions to 757 (comprising 715 employee unions, 21 employers' associations and 21 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 and the trade union participation rate have averaged around 660 000 and about 21 per cent respectively.

About half of the employee unions are affiliated to four major labour organisations registered under the Societies Ordinance. They are the Hong Kong Federation of Trade Unions (174 unions), the Hong Kong and Kowloon Trades Union Council (33 unions), the Hong Kong Confederation of Trade Unions (73 unions), and the Federation of Hong Kong and Kowloon Labour Unions (57 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.

During the year, the Labour Department continued its all-out efforts to prevent employers from evading their wage liabilities, stopping wage defaults from developing into claims on the fund. The number of applications for the fund decreased from 9 967 in 2005 to 7 532 in 2006, a record low since 1996. The financial position of the fund also improved - a surplus of $345 million was recorded in 2006. During the year, the fund disbursed a total of $143 million to 6 686 eligible applicants.

Employees' Rights and Benefits

The EO provides for various employment-related benefits and entitlements for employees. Apart from statutory requirements, employers and employees are free to negotiate the terms and conditions of their employment.

Starting from December 2000, all employers have to enrol their employees in Mandatory Provident Fund schemes in accordance with the Mandatory Provident Fund Schemes legislation. The rate of employers' participation in the schemes, which are regulated by the Mandatory Provident Fund Schemes Authority, stood at 98.5 per cent at the end of the year.