Labour Wars: Unions rising

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War is hell. —William Tecumseh Sherman

High growth, low unemployment and rising salaries should be the causes for a Great Labour Peace to break out. Clearly that hasn’t happened. A raft of issues are driving labour wars in Hong Kong. No one is happy and conflict is rising.

Construction Crunch
Get ready for a construction crunch. While manpower shortages are bedevilling employers across Hong Kong, it is the construction industry where the mismatch between supply and demand could derail a whole industry facing delays and increased costs. Looking forward, the Construction Industry Council (CIC) has calculated there will be a shortage of 10,000 construction workers
in the field every year. More than 40% of the registered construction workers are aged 50 or above and will be exiting the industry. Fresh recruits are not on the horizon.

The Government seems sanguine and made this statement in LegCo in February: “with the onset of major infrastructure projects and other construction projects entering the construction stage, the construction output will be maintained at a high level in the next few years […] the Administration projected that the industry [construction industry] will need over 30,000 additional construction workers, including over 20,000 skilled workers, in the years to come.” This was before MTRC announced the construction delay of the Express Railway project last month. The nine-month delay will hinder the release of additional workforce into the market, further aggravating the problem.

But it isn’t just construction. The latest unemployment figure for Hong Kong stands at 3.1% (the lowest in 16 years according to the Government) and underemployment is 1.4%; both statistics outperform almost all OECD nations. This spring, Secretary for Labour and Welfare Mr Matthew Cheung (張建宗) even claimed “full employment” in the job market. While this may seem to be ‘mission accomplished’ for any government, it raises the question of how a shrinking workforce can support a growing dependent class when there is no one left to put into the workforce. Construction can’t even take them from other industries where there is likewise no slack (unless recent fears about
Chinese rule changes do produce an army of unemployable young accountants – not likely candidates for switching to construction).

Labour import, the déjà vu
We’ve been here before. In the run up to the handover, the government embarked on a major building binge and Hong Kong experienced a labour shortage. Large scale labour import were enacted in the 1990s when the Government implemented the Special Labour Importation Scheme for the New Airport and Related Projects. Then, unemployment rate was at 2%. In 1990, the import ceiling of the Scheme was 2,000. The ceiling rose to 5,500 in 1993 and to 17,000 in 1994. In 1995,
23% of the total workforce in the airport and related projects were imported labour.

Now, importing foreign labour is taboo to trade unions. They disagree a shortage even exists in the first place. They lay the blame on the Government and the Construction Industry Council (CIC) for failing to provide proper training. Some graduates from CIC, trained using taxpayer money, are put to work on elementary tasks and do not receive further on-site training to become skilled workers. This is a waste of time and money. Authorities are aware of the phenomenon and explain that skilled workers might not have time to train the newbies while facing tight schedules on construction projects.

“Business associations are not trustworthy and there are too many of them. It is difficult to find one with broad representation of the business communities,” said Lee Cheuk-yan (李卓人).

Speaking to HT, Federation of Trade Unions (FTU) lawmaker Mr Wong Kwok-hing (王國興, GC- Hong Kong Island) stands against labour importation. He claims the current Supplementary Labour Scheme is adequate to balance the need for more workforce against protecting the local workers.
The tough stance of this pro-Government group may explain why we have seen only a single modest adjustment of the Scheme in March to shorten the application process of 26 construction-related jobs from the current processing time – ranging from 7 months to over a year – to 6 months.

Mr Lee Cheuk-yan (李卓人, GC- New Territories West), lawmaker from Confederation of Trade Unions (CTU) and Chairman of the Labour Party, believes once there is large scale labour importation, the Government and employers will have no incentive to improve salaries or the working conditions of the workers. “The so-called labour shortage has created an advantage for workers to push for improvement on their working conditions but honestly, we are not yet successful
in doing that.” He fears labour importation will further lower their stakes in negotiation. However, he is open to negotiate on labour importation – but only if the Government legislates to enshrine collective bargaining.

No Standard Working Hours
Labour importation is not the only row between employers and workers. Standard working hours (SWH) is another front in the labour wars and has been studied by a Government committee for almost 2 years now. Employers and business communities are dubious about the benefit of the policy and oppose it strongly.

“We’re from the old school. We believe the less influence, the less legislation there is, the better it is. The market will fix matters”, says the CEO of Employers’ Federation of Hong Kong (EFHK) Mr Louis Pong (龐維仁).

He fears SWH will be another “bad” policy following the minimum wage. “I can’t see the benefit of it [minimum wage law]. Though the negative impact is yet to be seen as the policy is still new, the future is unknown and there are many possibilities […] I am worried about it even today. In my
view, it will weaken the economic development in Hong Kong and at the same time, unable to help many people, not even the poor.” Around 30% of the population living in public rental housing. Mr Pong cites anecdotal evidence that many tenants quit their full-time jobs and work on a part-time
basis lest their income be too high, causing their subsidies to be reduced or even disqualifying them for subsidised housing.

Let’s make a deal – not
The polarised opinions of employers and employees have dragged both sides into a gridlock. Business associations like EFHK lobby for labour imports and oppose SWH; labour unions push for the contrary. The development of Hong Kong and social harmony are at risk when we don’t have enough workers for construction and at the same time, an ongoing conflict between employers and employees for better working conditions.

However, chances that an agreement to exchange for labour import with SWH are slim.

For one, trade unions will not back off on labour importation. EFHK too, is talking tough on both SWH and the possibility to make a deal. “There are policies that we know, once in place, we will be going downhill. And SWH is one of them, so I don’t think we can trade”, Mr Pong says. Their ground is solid: “Our position is clear – no legislation [on SWH] at all. We have minimum wage and that’s good enough.”

Second, labour groups don’t trust the business associations. Mr Lee bluntly states that “business associations are not trustworthy and there are too many of them. It is difficult to find one with broad representation of the business communities.” It is difficult to find one with broad representation
of the business communities.”

“Victory will belong to the labour unions”
Surveying the field, HT wanted to know who held the high ground. HT columnist and political strategist Mr Simon Lee (李兆富) predicts the labour unions, particularly FTU and CTU, will be successful in getting what they want.

The bar bender strike in 2007 and the dock worker strike last year were the longest strikes in Hong Kong history. Both were led by the CTU.

FTU has 6 seats in LegCo and has long been working within the Government to effect change. The conciliatory approach of FTU is the characteristic of it. “FTU is fighting for what they can get”, says Mr Simon Lee. FTU tends to know the bottom line of their opponents and negotiates in that direction. He identifies FTU as a classic union which emphasises balancing power rather than adopting a confrontational approach in contrast to the CTU, which seeks revolutionary change of the current system.

The CTU works outside the Government using traditional Western labour movement tactics and strikes. The bar bender strike in 2007 and the dock worker strike last year were the longest strikes in Hong Kong history and both were led by CTU. The ability of CTU to mobilise workers has granted them success in “agenda setting”, which means getting their voices and demands heard.

Rather than confrontations, silence is often the cause of a labour conflict. Mr Lee Cheuk-yan claims that the CTU and himself are “very eager to negotiate and make a deal” but are often forced to take more radical actions because employers are reluctant to talk and threaten the workers who dare to go on strike. “The reason we have difficulty in bargaining with employers is because they don’t see the need to bargain with us.” He thinks that the reluctance and indifference persists even after employers experienced numerous strikes in recent years.

No end to this war
When asked, Mr Pong from EFHK struggled to think of the last victory employers had. He had to dig deep into his mental archives to come up with the Special Labour Importation Scheme for the New Airport and Related Projects roughly 24 years ago. It was the distant past and a record that is hardly impressive given trade unions’ numerous victories: establishing  minimum wage, paternity leave,
training funds, and with standard working hours at hand and the MPF-Long Term payment offsets about to come back into play.

FTU and CTU will stick to their current tactics which have served them well and to continue to win them territory in the labour wars. But look for no resolution to this conflict any time soon.