TO:  Chief Executive Donald Tsang Yam-Kuen

CC: Commerce and Economic Development Bureau, Labour and Welfare Bureau, Liaison Office of The Central People’s Government in The Hong Kong S.A.R.

Dear Mr. Tsang,

The International Trade Union Confederation, which represents 168 million unionised workers through its 311 national affiliated union centres in 155 countries and territories, including China’s Hong Kong Special Administrative Region (SAR), is writing to you in connection with recent moves by the Democratic Alliance for the Betterment of Hong Kong (DAB) and representatives of Hong Kong Small and Medium Enterprise associations urging you to push for the suspension of certain articles of the Labour Contract law of the People’s Republic of China (PRC).

We wish to make it clear that the ITUC regards such lobbying by political parties and industry associations to negatively affect and rescind important labour legislation across the border in mainland China as tantamount to asking the Chinese authorities to turn back the clock to allow businesses to continue to exploit working men and women. The two articles in question (Articles 14 and 47) concern the right of employees to obtain specified levels of compensation in the event that their contracts are terminated and the right of employees to obtain a contract without a fixed term under certain circumstances – namely if the employee has already worked for the employer for 10 consecutively full years or if the contract is to be renewed after two fixed-term employment contracts have been concluded consecutively. I am sure that your government is aware of the importance attached to requesting that the People’s Republic of China’s national authorities suspend a law enacted only recently after several years of debate and to widespread international support.

While we understand that many small and medium enterprises are fearful for their businesses in the current economic turmoil and while we have no objections to associations seeking financial measures (such as tax breaks and loans) to support them, we must raise two significant objections to the current lobbying over the labour contract law. Firstly, we remind the authorities that it is clear that the reason for some small and medium businesses facing difficulty is neither due to the new laws nor to the financial ‘tsunami’. In fact many small businesses operating at the lower end of the market with small profit margins and operating on a low cost, labour intensive and low profit model have been going out of business in the past 24 months, and at an increasing rate. The situation has not necessarily been exacerbated by the new labour contract law; many of these businesses have been negatively affected by mismanagement, a reliance on low wages and the almost universal circumvention of Chinese labour laws as well as the rising prices of oil, transport prices, factory rent, food prices and raw materials.  While it is clear that the extent of the recession is not yet known, labour intensive factories have been moving inland to cheaper provinces away from the Pearl River Delta and even before the start of 2008, many had left or gone bust. 

Indeed we note that the General Secretary of the Dongguan Municipal Party Committee was reported earlier this month as saying that “Some media have been overstating the impact of financial crisis” and that according to official data there were “627 enterprise closures in the past nine months this year in Dongguan, compared to last year when there were a total of 908 enterprise closures”.

Secondly, we must emphasise that the only way forward in developing the local economy and long term economic sustainability is not in the prolonged use of low cost, low profit enterprises which often provide minimum wages and few social benefits. If the Hong Kong government and its business sector are interested in promoting social harmony and economic well being for its citizens and those of the mainland, it should be remembered that jobs are not the best guarantee for social cohesion if the jobs that are created are second-tier positions – without decent wages and decent working conditions. Competitiveness is not served by creating an underclass of workers that is lacking skills, suffers from health-related problems and is unable to raise productivity or engage in innovation.

Instead of focusing on negative measures to tackle the situation through dismantling hard-won rights and working conditions for their compatriots over the border, we instead recommend that the DAB, SME associations and other business associations instead focus on improving research, branding and quality, rather than seeking extraordinary measures to continue operating what are in certain circumstances simply sweatshops.

We regret therefore the government authorised public statements from you which not only hint at industrial unrest but also give credence to an exaggerated assessment of the impact of the new labour contract law; “Mr Tsang said Hong Kong enterprises worry that in complying with the labour contract law labour costs will surge, flexibility in managing human resources will be undermined and labour disputes will arise”. This statement comes almost 12 months after the law was implemented – at a time when all companies regardless of their ownership should be full compliant with the law.  We hope that the government will desist from further pressure on the central government to ‘relax’ their labour related legislation.

We very much hope that the government will also not heed calls to halt the introduction of the minimum wage bill. Whilst regretting the authorities’ attempts to produce an overly restrictive bill, we further urge the Hong Kong SAR government to move ahead with its long delayed legislation on a minimum wage and ensure that it works not only to secure the interests of its business constituents but also its citizens and, in doing so, to address urgently income inequality and the increasing numbers of working poor.

Yours sincerely,

(中文版)

致: 香港特別行政區行政長官曾蔭權先生

尊敬的曾先生

國際工會聯合會代表著遍佈全球155國家及地區的311國家工會，至今有1.68億的工會會員。包括香港特別行政區在內。此來函將表示國際工會聯合會關注，近期香港民主建港聯盟（民建聯）和香港中小型企業商會代表敦促特區及中央政府要求暫緩實施中國勞動合同法的部份條文之事宜。

國際工會聯合會在此聲明對該事件的立場，香港政黨和行業代表跨地域聯手向中國政府之此等遊說行為將帶來相當負面的影響，且是令中國的勞工立法走向倒退作法。其要求暫緩勞動合同法中第14條和47條：涉及員工被終止勞動合同後所應得的賠償和權利，以及員工在同一企業內工作滿十年連續訂立兩次固定期限勞動合同後可續簽無固定期限勞動合同等。我亦相信香港特別行政區應當意識到，要求暫緩一則中國當局經過多年廣泛諮詢及討論以至落實的重要勞工法例的嚴重性。　

雖然我們理解，許多香港的中小型企業擔心他們的經營受到金融危機的影響。故此我們並不反對業界尋求政府在財政措施（如稅收減免和貸款）方面的協助，但我們仍必須提出關於遊說暫緩法規的意見。首先，我們希望提醒：當局可以清楚地看到那些中小企業所面臨的經營困難不是因為新的勞動法規，亦並非直接因為金融危機的沖擊。事實上，許多中小企業一直利用中國低廉的勞動力成本經營低增值產品，這類出口加工導向的企業已經處於低利潤狀態超過兩年。而業界卻將不利的經濟狀況歸咎於今年才實施的勞動合同法。同時，因為企業的管理不善同時面臨嚴峻地市場競爭，加上國際原油及原材料價格不斷上漲，運輸價格，工廠租金，人民幣匯率的調升，許多出口加工型企業已有相當明顯的衰退。

早在多年前，部份勞動力密集的行業已經出現倒閉，或開始轉移在珠三角地區的生產線到內陸成本較便宜的省份設廠。我們亦注意到，東莞市市委總書記曾在早些時候提過，“一些媒體把金融危機誇得過大，對東莞企業倒閉的數量，一貫以來都是誇大。根據外經貿的資料顯示，今年1到9月東莞關閉企業627家，去年全年東莞關閉的企業是908家，今年的情況和去年相比基本差不多。”

其次，我們必須強調的是，長期利用低勞動成本並非發展地方經濟和長期經濟的可持續性的唯一出路。那些低利潤的企業通常只提供最低的工資和一些基本福利，根本沒有意識到企業發展和社會承擔的重要。如果香港政府及商界有意促進公民社會的和諧及經濟發展。就請不要忘記，那些沒有體面工作條件及合理的工資次等工種及服務是不可能有好的就業保障。競爭優勢不應以牺牲眾多處於社會底層，患有職業病，甚至喪失勞動技能的工人為代價，這是無法真正地生產力提升及發展創新行業。

可見如此試圖摧毀國內同胞來之不易的權利和工作條件的所為是如此地低劣。因此我們建議民建聯，中小企業協會和其他行業協會應著眼於提高研究，質量及品牌，而不是尋求不合理的方法，以繼續其血汗工廠的運作模式。

我們對特區政府在實施中國勞動合同法近十二個月後的一則公開聲明感到遺憾。從中不僅暗示行業經營危機，亦誇大了對新勞動合同法影響的評估。“曾蔭權談及香港企業憂慮遵守中國勞動合同法所引致的勞動力成本將激增，且靈活地人力資源管理亦將受到破壞和而勞資糾紛將頻生”特別是在幾乎所有的公司並未意識其應完全遵守法規的時候。我們希望，香港政府停止進一步向中央施壓要求'放鬆'相關法規的規管。

我們非常希望，特區政府也不會因此而暫緩香港最低工資立法的相關進程，即使我們遺憾的是這是一份有過多局限的法案。我們進一步促請香港特區政府推動這拖延已久的最低工資立法，並確保其結果不是只在維護其商家的利益，而是更大限度的保障愈來愈多面臨收入不均甚至不合理的貧困市民。

此致！

附件：香港特別行政區商務及經濟發展局
香港特別行政區勞工及福利局
中央駐香港特別行政區聯絡辦公室