Vishal Melwani, Partner, and Hannah Swift, Registered Foreign Lawyer, Eversheds
Working hours hit the news recently following the tragic death of a 21-year-old intern who had allegedly worked 72 hours straight. One bank’s response was to announce a “no work” rule for interns between 12–7 am. Whilst the description of this as “benevolent” seems tongue in cheek, it raises a pertinent topic for Hong Kong employers. The Government here announced a review of standard working hours (“SWH”) as far back as 2011. In May 2015, the SWH Committee announced its recommendation for legislation on SWH. But, what exactly has happened since 2011 and is Hong Kong any closer to legislation?
SWH in Context
Regulation on SWH would impact business operations in all sectors. Currently, SWH in Hong Kong are unregulated. The only exceptions relate to children, young persons in industrial undertakings, statutory holidays and rest days.
Regulation could be in the form of daily or weekly limits. Some regimes also have exceptions, such as averaging hours over a “reference period” and in the case of the UK, an employee may “opt out” of the maximum working week limit. For a region with a mature and developed economy – Hong Kong’s lack of regulation is unusual (see below).
* exceptions/flexibility may exist
The Road to Regulation
In 2012, the Labour Department published its “Report of the Policy Study on Standard Working Hours” (“Report”). The Report assessed SWH regimes globally, reviewed SWH in Hong Kong and the potential socio-economic impact of SWH regulation. The Report posed more questions than it answered, and outlined six areas for further consideration:
- Objectives of a SHW policy;
- Labour flexibility/competitiveness;
- Proliferation of part-time/casual workers;
- Impact on business including SMEs;
- Modus operandi of different industries; and
- Whether legislation is the best way forward.
In April 2013, the SWH Committee was formed for a three-year term, chaired by Dr.Leong Che-hung, GBM, GBS, JP. The SWH Committee has the aims of enhancing public understanding, collecting information, conducting an evidenced-based assessment and engaging with the community. The SWH Committee established a website (http://www.swhc.org.hk), created TV advertisements (broadcast in 2014) and set up two working groups.
A consultation commenced in January 2014 and a survey of 10,000+ employees and employers was commissioned. The survey confirmed:
- median weekly hours ranged from 40-54;
- 7 percent of employees had undertaken paid overtime with 18 percent undertaking unpaid overtime (median being 5 hours each);
- 61 percent of employees’ contracts were silent on overtime compensation;
- the most common overtime pay rate was 1:1 (75 percent);
- 92 percent of employees “agreed” working hours should be agreed between the employer and employee;
- 67 percent of employees “agreed” SWH should be set; and
- < 45 percent of employers “agreed” that maximum working hours limits were appropriate.
The SWH Committee’s Recommendation
In May 2015, Dr. Leong Che-hung confirmed that a legislative approach was recommended, to include a requirement for written employment contracts to specify working hours arrangements (the “big-frame” approach). Consideration is still being given to other suitable measure(s) to protect grassroots employees (“small frame”). A final report is likely in Q1 2016.
Unfortunately, there is currently no further information on what the “big-frame” or “small-frame” approaches might look like or how they will be applied in practice. Legislation is likely to be “light touch” compared with other jurisdictions; given the working culture in Hong Kong, it would be a brave move to regulate too heavily. Most employers in professional/financial services will be in no hurry for legislation; but if you are an employer waiting for clarity, patience is a virtue.