Huge tax on foreign domestic workers

Despite a rally of 12,000 domestic workers on 23 February, the government went ahead with a controversial scheme to effectively tax one of Hong Kong’s poorest labour sectors – foreign migrant domestic workers.
The scheme is not straightforward - employers pay the government a levy of HK$9,600 (US$1 = HK$7.8) at the beginning of each two-year contract period, while the workers’ pay is reduced by the same amount, equivalent to HK400 per month.

The levy is paid on all contracts issued to foreign (not local) domestic workers issued after 1 April.
HK$400 represents more than 11 percent of these migrants’ minimum wage (many women do not even receive the ‘minimum’), which, before the reduction, was HK$3,670.

The scheme is riddled with anomalies, for example domestic workers on the minimum wage do not even earn the amount that is tax free to all other earners (including the richest) in Hong Kong (around HK$9,000 per month).
Time will undoubtedly show the impracticality of this unjust wage reduction – for example the government has not explained how an employer will reclaim any portion of the levy when workers leave service before the end of the contract for which the employer has already paid the government. In a situation where migrant women are routinely cheated out of wages by employers underpaying the workers, the worry is that employers will illegally deduct this portion from the maid’s final wage settlement.

Migrant support groups in Hong Kong have vowed to demand the reversal of this unjust wage imposition, and have reported the case to the International Labour Organisation.

Civil service staff axed

Over the next few years, 700 civil service posts in the Social and Welfare Department will disappear as twenty or so service centres disappear or are contracted out in line with government privatisation plans.

Legal setback in busting pilots’ union

Legal changes in UK labour laws in 2001 have allowed five pilots sacked by Cathay Pacific to have their case judged in London where they are employed by Cathay’s daughter company, Veta.
The five pilots were among 49 that Cathay Pacific sacked in July 2001 during a dispute over management’s unilaterally imposed changes to rostering. (See ALUs passim).
Six other pilots among the 49 were denied a labour tribunal hearing in London as they were directly employed in Hong Kong, but others employed by Veta may well be encouraged to try to have their cases heard in London. Eight pilots in Australia are waiting to see if Australian courts will hear their cases.

A spokesman said the company is, “surprised the UK employment tribunal should feel it is appropriate to hear a case concerning a dispute located on the other side of the world.”

However Cathay has no reason to be taken aback by a country seeking to protect its nationals as such action is commonplace, for example it is one of the duties of overseas diplomatic missions. There are already precedents set in the UK for extraterritorial jurisdiction in occupational safety and health cases won in the UK against companies operating in southern Africa.

Part of the problem lies with Hong Kong’s feeble labour protection laws that provide for unlawful dismissal but not for unfair dismissal, as pointed out by the lawyers acting for the London-based pilots. The unlawful dismissal legislation is pathetic in any case as it does not allow for reinstatement when plaintiffs win their cases.
The pilots’ union, the Hong Kong Aircrew Officers’ Association, is funding the London case.
One of the pilots, John Warham, said, “It has far-reaching implications for companies who use overseas contracts to get round British employment laws.”

Hong Kong Confederation of Trade Unions’ General Secretary Lee Cheuk-yan said that some British Council teachers in Hong Kong may be encouraged to act on the UK decision as bonuses are being used to pay Mandatory Provident Fund contributions.

South China Morning Post, 12/13 March 2003