For law on working hours, the devil is in the details

Bernard Chan says an inflexible approach could do more harm than good

PUBLISHED : Friday, 08 March, 2013, 12:00am
UPDATED : Wednesday, 28 September, 2016, 8:46am

The debate on standard working hours will soon be under way, with a committee being formed to examine the possibility of legislation. Many people will see it as a natural step following the introduction of a minimum wage. But it is significantly more complicated; the potential to accidentally damage Hong Kong's competitiveness may also be greater.

If we look around the world, we see there is no agreement on what laws regulating working hours are actually designed to achieve. In Japan and Europe, the main aim is to ensure workers' health and safety. In Australia, work-life balance is also a factor. In the US, the cap on hours is simply the point at which higher hourly overtime wages must be paid. In Korea, during the Asian financial crisis, hours were reduced partly in the hope that it would ease unemployment by sharing work out.

In Hong Kong, many labour activists see this essentially as a working-class issue. They say some less-skilled workers in certain sectors are being forced to work long hours - in other words, are being exploited. A cap to ensure overtime is paid and hours are not unreasonable would therefore have a similar aim to the minimum wage: to protect poorer workers from unscrupulous employers.

We do have vulnerable workers; we know that hours are especially long in retail, catering, logistics, security, cleaning and elderly care. Surveys suggest that maybe as many as half of workers in Hong Kong who do overtime are not properly compensated.

When employers in low-value industries claim that standard working hours will cost them so many billions of dollars a year, they might be arguing against themselves. Could that sum of money be the amount they are currently saving by getting employees to work without overtime?

I believe we should also see this as a middle-class issue. Many workers would say that the average full-time working week in Hong Kong of 49 hours is too long. For some white-collar workers, however, the situation is more complex. Standard working hours legislation would need to allow exemptions.

Accountants, for example, have to work long hours at times of the year when companies prepare their accounts. Maybe it would make sense to set a cap on hours over several months rather than by the week. Investment bankers often work late into the night. But they get massive bonuses; do we need to care about their hours? A chief executive in a big company on a big package has to be on call whenever he is needed. He cannot clock in and out.

Some people might want to work long hours for a while, just as some younger people at times hold down two jobs to make money. So, should a standard hours law make exceptions for particular professions, for people with particular responsibilities at work, or for people who are happy to voluntarily opt out?

Then there is the question of definition. Do "working hours" include meal breaks and rest periods?

Last, but not least, we have to consider economic impact. The minimum wage was never going to be a major financial burden to most employers in Hong Kong because those firms are in high-value industries and need to attract skilled staff. However, the minimum wage did affect a lot of companies at least a bit because of unforeseen administrative and record-keeping requirements.

Standard working hours could financially hurt a far wider range of employers and employees, if the law is not carefully designed. And, as is always the case with regulation, there is the additional danger that administrative burdens alone will affect Hong Kong's competitiveness. I believe a law on working hours is good in theory, but we must be careful about the details.

Bernard Chan is a member of the Executive Council