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Monday 1 December 2008
HK factories want labour rules eased in Guangdong
The Federation of Hong Kong Industries is due to meet Guangdong governor Huang Huahua and senior provincial officials today in its latest effort to lobby on labour issues, as the financial crisis continues to bite.
The Federation of Hong Kong Industries is due to meet Guangdong governor Huang Huahua and senior provincial officials today in its latest effort to lobby on labour issues, as the financial crisis continues to bite.
A delegation led by the trade body’s chairman, Clement Chen Cheng-jen, is expected to call for revision of parts of the new labour legislation. Manufacturers blame it for tying their hands when they want to trim headcounts, according to a federation representative.
It will also call for investment incentives to help tens of thousands of Hong Kong enterprises across the border to stay in business.
However, some analysts said the new labour-contract law would be too hot to handle, as state leaders aim at keeping jobs.
The federation’s deputy chairman, Stanley Lau Chin-ho, said the delegation wanted to work out some terms of the new labour-contract law, which had provoked strings of legal disputes since it took effect on January 1.
“We hope the authorities concerned will have some grey areas of the law removed; we need incentives to keep our operations running,” Mr. Lau said. “The grey areas are fuelling labour frictions, and a time bomb is ticking between employers and employees.”
On Wednesday the federation will join Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong in talks with the head of the provincial branch of monetary regulator People’s Bank of China.
These meetings follow a round table among Hong Kong trade organisations and Guangdong’s Communist Party chief Wang Yang last week about the province’s promise to allocate more than 40 billion yuan (HK$45 billion) within four years to rescue its manufacturing sector.
About 20,000 out of about 65,000 Hong Kong factory owners in Guangdong were expected to have collapsed by the end of this year, their woes exacerbated by the global economic slump, according to some trade organisations.
Mr. Lau said many manufacturers lacked the flexibility to trim their workforces, as a term of the new labour legislation allows the dismissed to claim economic compensation by tracing their time with a company, which can be dated back before the implementation of the new labour contract. New employment contracts were signed at the beginning of this year, as the new regime required, he said.
“The so-called ‘trace back’ right deals a blow to labour-intensive manufacturers,” Mr. Lau said. “Many factories have to tighten their belts, but have no flexibility in making redundancies because of this term.”
He pointed out that the potential economic compensation of a worker is so much that it can cause a factory to collapse. Toymaker Kader Holdings did not renew contracts for 600 workers last week, prompting unrest and a standoff at its Shenzhen plant. Sacked workers accused the company of unfair compensation. It said it followed the new rules.
To ease credit shortages, the federation would call on the central bank in Guangdong to open access to financing for Hong Kong companies on the mainland, Mr. Lau said. “The central bank cut interest rates aggressively recently; however, few Hong Kong companies can enjoy the benefit of lower borrowing costs because of restrictions on yuan borrowings.”
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HK factories want labour rules eased in Guangdong
Denise Tsang
1 December 2008
The Federation of Hong Kong Industries is due to meet Guangdong governor Huang Huahua and senior provincial officials today in its latest effort to lobby on labour issues, as the financial crisis continues to bite.
A delegation led by the trade body’s chairman, Clement Chen Cheng-jen, is expected to call for revision of parts of the new labour legislation. Manufacturers blame it for tying their hands when they want to trim headcounts, according to a federation representative.
It will also call for investment incentives to help tens of thousands of Hong Kong enterprises across the border to stay in business.
However, some analysts said the new labour-contract law would be too hot to handle, as state leaders aim at keeping jobs.
The federation’s deputy chairman, Stanley Lau Chin-ho, said the delegation wanted to work out some terms of the new labour-contract law, which had provoked strings of legal disputes since it took effect on January 1.
“We hope the authorities concerned will have some grey areas of the law removed; we need incentives to keep our operations running,” Mr. Lau said. “The grey areas are fuelling labour frictions, and a time bomb is ticking between employers and employees.”
On Wednesday the federation will join Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong in talks with the head of the provincial branch of monetary regulator People’s Bank of China.
These meetings follow a round table among Hong Kong trade organisations and Guangdong’s Communist Party chief Wang Yang last week about the province’s promise to allocate more than 40 billion yuan (HK$45 billion) within four years to rescue its manufacturing sector.
About 20,000 out of about 65,000 Hong Kong factory owners in Guangdong were expected to have collapsed by the end of this year, their woes exacerbated by the global economic slump, according to some trade organisations.
Mr. Lau said many manufacturers lacked the flexibility to trim their workforces, as a term of the new labour legislation allows the dismissed to claim economic compensation by tracing their time with a company, which can be dated back before the implementation of the new labour contract. New employment contracts were signed at the beginning of this year, as the new regime required, he said.
“The so-called ‘trace back’ right deals a blow to labour-intensive manufacturers,” Mr. Lau said. “Many factories have to tighten their belts, but have no flexibility in making redundancies because of this term.”
He pointed out that the potential economic compensation of a worker is so much that it can cause a factory to collapse. Toymaker Kader Holdings did not renew contracts for 600 workers last week, prompting unrest and a standoff at its Shenzhen plant. Sacked workers accused the company of unfair compensation. It said it followed the new rules.
To ease credit shortages, the federation would call on the central bank in Guangdong to open access to financing for Hong Kong companies on the mainland, Mr. Lau said. “The central bank cut interest rates aggressively recently; however, few Hong Kong companies can enjoy the benefit of lower borrowing costs because of restrictions on yuan borrowings.”
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