ENG-2012 — Page 149

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Employment

insurance. Labour inspectors also check employees' proof of identity and collaborate with the Police and the Immigration Department to combat illegal employment. During the year, 241 joint operations were carried out by the three departments.

Enforcement against Wage Offences

The Labour Department takes strict enforcement action against employers who fail to pay wages due to their employees and takes active steps to prevent wage defaults. The department secured 525 convictions for wage offences during the year. One employer was given a suspended sentence and two employers were ordered to perform community service as a result of wage defaults.

In addition, employers who wilfully and without reasonable excuse fail to pay wages or other entitlements awarded by the Labour Tribunal or Minor Employment Claims Adjudication Board, are liable to criminal prosecution under the Employment Ordinance. In 2012, the department secured 75 convictions for failures to pay awards made by the Labour Tribunal or Minor Employment Claims Adjudication Board. One employer was ordered to perform community service.

Protection of Wages on Insolvency Fund

The Protection of Wages on Insolvency Fund, with income mainly from an annual levy of $450 imposed on each business registration certificate, provides ex gratia payments to employees owed wages and other termination compensation by insolvent employers. The fund covers up to $36,000 for four months' arrears of wages, $22,500 for one month's wages in lieu of notice and $50,000 plus 50 per cent of any entitlement in excess for severance payment. With the commencement of the Protection of Wages on Insolvency (Amendment) Ordinance 2012 on 29 June 2012, the fund further covers pay for untaken annual leave not exceeding the last two leave years and pay for untaken statutory holidays not exceeding the last four months, up to $10,500. The maximum amount of ex gratia payment for each eligible worker is $289,000.

In 2012, the fund received 2,976 applications for ex gratia payment, paid out $64 million to 2,887 applicants, and recorded a surplus of $528 million.

Employees' Compensation

Hong Kong's employees' compensation regime follows the 'no-fault' principle, whereby compensation is payable regardless of whether the injury, occupational disease or death is due to the employee's fault. The Employees' Compensation Ordinance covers injuries or death caused by accidents arising from, and in the course of, employment or by specified occupational diseases. An employer must be in possession of a valid insurance policy to cover his liabilities both under the ordinance and the common law.

The Labour Department assists injured employees and the families of deceased employees to obtain compensation from their employers under the Employees' Compensation Ordinance. It also provides interest-free loans to workers injured in job-related accidents. During the year, the Labour Department delivered talks, distributed leaflets, and made announcements on TV, radio and public transport to help employers and employees better understand their rights and obligations under the ordinance. An 'Employees Compensation Assistance Scheme' helps

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