Over the past 13 years, the DHL/SCMP Hong Kong Business Awards have recognised excellence under the categories: Business Person of the Year; Executive Award; Owner-Operator Award; Young Entrepreneur Award; International Award; and Enterprise Award. Ahead of the presentation for this year's winners on December 11, every Monday we will speak to one of last year's winners and see how each has fared in the past 12 months. Donald Hay finds it difficult being a good corporate citizen in the mainland. Not complying with World Trade Organisation-driven rules on employment would incur the wrath of his customers. So by opting to comply with the rules, he has to face the wrath of his staff. Along with China's WTO entry came a set of labour laws designed to create a level playing field on which foreign enterprises can compete equally against local ones. The laws have pushed up operating costs and restrictions on overtime have antagonised workers relying on the extra cash to make life more comfortable for relatives living in their home province. 'There are overtime bans and employees don't want that. They want 100 hours overtime a month. They tell us they can get more money at a factory down the street. We get this problem all the time,' said Mr Hay in his Causeway Bay office. Mr Hay is the third generation of an Australian household, industrial and hygiene brush ware-manufacturing dynasty that began life in the 1890s. With his son Christopher as vice-president, marketing, the multi-million-dollar company has added barbecue and garden tools and custom fabric products such as outdoor furniture covers and bags to its product portfolio. Margins are low in an industry that measures its output in millions of units. That is why the company is so sensitive to changes in material and labour costs. 'Costs of running a factory are about 16 per cent more if you comply with the new labour laws,' said Mr Hay, winner of the 2002 DHL/South China Morning Post Owner-Operator Award. 'We find that a lot of customers just don't care if you comply, so the guy next door who doesn't comply will have 16 per cent lower manufacturing costs.' Forcing Mr Hay's hand is his philosophy of doing the right thing by a country that has allowed his company in as a guest - albeit a guest of more than 20 years that employs about 4,500 staff making household cleaning products at a one million square foot facility in Shenzhen. Audits by his A-list of clients, including Rubbermaid, 3M, Wal-Mart and Procter & Gamble, also prevent the 60-year-old businessman from running a sweatshop. Not that he would ever consider doing so. 'I tell staff, if [current affairs programme] 60 Minutes was to visit our factory and it was a sweatshop, our orders would evaporate tomorrow. I work on the principle that you've got to treat your employees well because the wealth of the company is the employees. If you don't have them, you don't have anything.' What competitive edge Hayco lacks on price, it more than makes up for in material quality, design and innovation. Mr Hay has ruled out moving his production further into China's hinterland where overheads are less. However, it is something he is mindful of. 'We have lost business as people have got into this industry over the past few years because they know they can beat us in price. At the moment it's not a level playing field and that may force us to look [at relocating] that more seriously.' In the meantime, he concentrates on keeping his staff happy at the fully equipped Hayco Home, the staff dormitories adjacent to his mainland factory. With karaoke rooms, library, hairdressers, knitting classes, football pitch, badminton courts, gym and clubhouse, the facility has been certified by an international agency as meeting and exceeding all work safety standards. 'I'm very hands-on and that is a core value of Donald Hay that runs through all the staff.'