B341

Labour Relations & Laws

Contents
Unit 1:Theoretical aspects of labour relations Unit 2:Environmental influences Unit 3:Main actors & ideologies in labour relations Unit 4:Common law, ILC & legal employment conditions Unit 5: Wage determination & industrial conflict Unit 6: Human rights in workplace & contemporary issues

Unit 2
Environmental Influences

Environmental Influences
The influences include:
The political background The technological influence The economic framework The socio-cultural framework

Summary of the political background (P6)

Power is an important element in the relationship among the three actors employers, employees & government Hong Kong, government and the employers remain the dominant rule-makers (England, 1989:20). Hong Kong is Chinas main window on the world. Hong Kong has been (and still is) a major services centre for China, and particularly for Guangdong.

The rate of Chinas investment in Hong Kong has increased rapidly since 1984.

The political background (before 1997) P8

Colonial system
Hong Kong is inevitably influenced by the colonial system as HK had been governed by Britain more than a century.

Characteristics of the colonial system (Self-test 2.1

P31)

HK is a society with little political organization HK has been run by a bureaucracy dominated by British expatriates (or a paternal civil service elite) The government has focused on economic development Political development was neglected until after the mid-80s The main channel of getting public feedbacks & opinions was the City & New Territories Administration & other administration boards & committees (e.g. )

The China factor and the effects of the 1967 riot (P9)

The Confrontation of 1967 between the leftist unions and the colonial government marked a turning point in the development of labour relations and social policies in Hong Kong.

From then on the colonial government began to intervene more in labour relations. One example is the strengthening of the Labour Department to deal with employer-employee issues and formulation of labour legislations.

Self-test 2.2 (P10)

Before 1968 Hong Kong had nothing that could really be called a minimum standard of employment protection. Discuss the above statement, indicating with reasons whether you agree or disagree. What factors provided the impetus for government intervention in labour relations after then?

Self-test 2.2 (P31)

The Confrontation of 1967 marks a major watershed in the development of labour relations. It made the colonial government recognized that labour exploitation was a source of grievance. The government introduced more employment protection through the Employment Ordinance (EO) which was enacted in 1968. The new terms of EO helped balance the power between employers & employees.

The political background (1997 & beyond) P10

Changes after the signing of Sino-British agreement: The gradual opening up of the political process More seats (in Legco) were released for public election The opening up affected the balance of power among the three actors (government, employers & employees) Some unions became more enthusiastically involved in HK affairs and expected to contribute more in HKs stability & prosperity

The technological influence (P13..) Summary of Impacts of Technological environment:

Shapes the operation pattern e.g. from labour-intensive to fully automatic or computerized Changes the management style e.g. from tightly monitoring by supervisors to monitoring by systems Changes the employment conditions e.g. more use of machines, requires higher education/skills

The industries (especially the SM&E) have not been too keen to invest in advanced technologies because of market fluctuations
Semi-skilled jobs were also lost due to relocation of factories to China Weakened the power of trade unions due to changes in work customs & practices More lower-skilled jobs disappeared due to transformation from manufacturing to service industry

The economic framework P16

The economy of Hong Kong has experienced many cycles of ups and downs in the past two decades. They include: the Asian Financial Crisis in 1997; the SARS crisis in 2003; the financial tsunami; the European sovereign debt problems in 2000 and 2011

The economic framework P16 1. Instability

As an open economy, a major salient feature of Hong Kongs economic environment is its instability.

Some characteristics of some local industries:

Fluctuations in production & employment due to: Changes of customers tastes and demands Restraints of imports by other countries Competition from newly industrialized countries (such as Thailand, Korea, Malaysia) their wages, production cost are lower

Fast-buck mentality The competitive pressures in such an open economy encourage people to make quick profits whenever possible. The majority of investors have a short time horizon of three years

The economic framework

Flexibility Hong Kong industrialists and businessmen in general strive to respond quickly and flexibly to opportunities or threats. e.g. goods will not be produced until orders have been received; stock levels are always kept low subcontracting became a popular trade practice.

2. Market Segmentation
To cope with uncertainties, the employment market in Hong Kong can be broken down into two sectors:
i) Primary sector relatively stable & steady markets such as the service industry (communication, education, transportation..) e.g. government, public utilities ii) Secondary sector those of low-pay, unstable, poorer working conditions, closely supervised, high turn-over jobs

The economic framework P18 3. Size of establishment

Most of the employment units in HK are fairly small (i.e. they are SME) Only 3% of employers employ more than 100 workers Smaller firms are more adaptive to changeable business environment Their management functions will be less specialized Opportunities for promotion will be fewer The impact of labour legislation will be reduced The likelihood of trade union organization will be rare

The economic framework Instability P19 4. Government intervention

HK government adopts the positive non-intervention approach government believes in laissez-faire economy relies on demand & Supply.

Intervention by government should be minimal in this system, The government only intervenes to ensure HK adjust itself to changing circumstances.
A motto of maximal support & minimal interference (Richard Wong)

The socio-cultural framework (P21.)

Chinese culture impacts on the employer-employee relationship. Impact of Chinese culture on employers & employees behaviour:

a) The cultural inheritance

Chinese are still influenced by Confucianism & Toaism Workers favour voluntary mobility & avoid direct confrontation with employers 3 main values: i) Conformity Accepts high power distance, collectivism & respects hierarchical relationship. Power distance unequal distribution of authority Collectivism individuals expect their relatives, clan, or other in-group to look after them in exchange for unquestioning loyalty

The socio-cultural framework (P22.)

ii) Ethics of harmony Believes in equilibrium & avoid to go extreme () iii) Face When two parties are in dispute, both parties are cautious to avoid choosing actions that would challenge each others face for fear of future retaliation or the ruin of their long-term relationships

The socio-cultural framework (P23)

b) The refugee mentality
A large proportion of immigrants to Hong Kong were refugees fleeing political turmoil in China. HK workers (especially in the past) were more short-termed. They preferred economic rewards to political activities. Workers reluctant to become involved in political activity or labour unions affiliated with political parties.

According to recent study, among all other compensation components, cash remains king in the Chinese society.
Changing society The new generation of Hong Kong are more educated and they now consider Hong Kong is their home. Traditional and cultural values are now sometimes questioned and political awareness has been aroused significantly.

The socio-cultural framework (P26)

c) The lifelong learning society
Keen competitions in the region or even worldwide have led to demands of higher service standards. Employers in Hong Kong need to implement innovative measures and render value-added services. Continuing education and training of employees will become the main theme in the future development of human resources.

The socio-cultural framework (P26)

d) Changing expectation among Hong Kongs employees
The effect of participation on job satisfaction is clearly relevant to labour relations.

More and more employees place greater concern on job security/stability, in favour of some form of social insurance and social welfare in work. A more recent study highlights a gap between what employees desire from their employers in terms of commitment and faith on management.

End