Against Great Odds: The Evolving Role of Unions in Hong Kong How the constraints of government policies, employer attitudes, and political alliances have led to a weak but adaptive labor union structure with an important role in the march to further workers’ rights.
Nicholas Steele Civic Exchange Intern
September 2005 1
Table of Contents Page Abstract
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Introduction
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I: A History of Control
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From Voluntarism to Legalism Trade Union Rights Employment Ordinance Labour Relations Ordinance Labour Advisory Board Adoption of ILO Conventions A Growing Dependence
II: Weak Roots
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Outside interference and Colonial insecurity The HKCTU Pluralism and the Left-Right Divide Employer Organizations The Failures of Joint Consultation
III: Supply and Demand of Unionism – A Competition
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Inter-Industry Comparison Unionization Rates, Unemployment Rates, Stoppages, and Work Days Lost Labor Surplus
IV: Civil Service Unionism
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Standing Commission on Civil Service Salaries and Conditions Landmark Civil Service Disputes Post 1997 Wage Debate
V: Re-Politicization and Community Involvement
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The Voice of the People A New Militancy In the Neighborhood Recruitment A New Party?
Conclusion
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Abstract Organized labor in Hong Kong has historically been weak. Hostility from employers and the government combined with an overt political focus led unions to traditionally focus on welfare services rather than advocacy in the workplace. Although union leaders have found a new role in the legislature, they are still widely outnumbered by employers. To compound this, the political fission of union federations has continued into the current century, causing the ground that organized labor has gained to remain divided. Though the membership of unaffiliated unions has grown dramatically, they have had little influence in uniting to act politically or increasing labor’s influence in the private sector workplace. Once the political ambiguities of Hong Kong’s future become resolved, a more cohesive labor movement may be possible. However, if the legal rights of unions are not increased, their weakness in the workplace is likely to remain.
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INTRODUCTION In any capitalist society, there is a struggle between the policies of employers and the welfare of their employees. Hong Kong has a reputation as a bastion of laissez-faire, with low governmental control of business and little threat of industrial action from workers. By combining the strict regulation of unions with a voluntary approach to workers rights and collective bargaining, the pre-1997 colonial government was able to keep the labor market flexible and labor unions generally docile and apathetic. Keeping the rights of workers to strike and protest very weak, the government in Hong Kong was able to quell all major uprisings and potentially disruptive political movements.1 Hong Kong thus exhibited a mix of British labor law with tighter restrictions meant to restrain the organizing capacity of a population foreign to the ruling power.2 The political affiliations of most unions before the 1970s caused the colonial government to fear and restrict their activities. This caused a vacuum of worker representation in policies of employment. It was only through subsequent uprisings and civil disturbances that the controlling business interests were convinced of the need for minimalist protection for labor in order to quell and prevent further challenges. These protections were then passed as legislation to be included in individual employment contracts, avoiding any additional legality for collective bargaining or other union rights. The 1970s witnessed the beginning of rapid growth in white collar unions, particularly those in the Civil Service. Government policy towards unions began to change and consultation with Civil Service unions became formalized. Private sector employer attitudes towards unions did not improve and unions in the private sector remained quite weak. Union membership dropped in the early 1980s as private sector unions struggled to find their place in the changing society. Industrial shifts in employment also caused changes in unionization rates between industries. Upon the ratification of the Sino-British Joint Declaration in 1985, organized labor was given a small but permanent place in the government through the system of Functional Constituencies (FC). Representation in the LegCo changed the nature of labor advocacy by leaders in top unions and federations. Bypassing the traditional Labour Advisory Board (LAB), elected leaders of large labor unions and federations were able to speak out and attempt to pass legislation in a manner that was not possible before. Though the increased representation of labor in the legislature has increased the publicity of labor concerns, it has also further harmed the relations between organized labor and employers, especially in policies over migrant workers.3 1
The various uprisings and how the government either took action themselves or allowed employers to do the same can be found in England, Joe. Industrial Relations and Law in Hong Kong. Oxford University Press, Hong Kong, 1989. 2 The British labor law roots to Hong Kong labor law are detailed in Ng Sek Hong. Industrial relations and voluntarism: The Hong Kong dilemma. International Labour Review, Vol. 121, No. 6, NovemberDecember 1982. Pg 747-759. 3 The clash over migrant workers is noted in Ng Sek Hong. Reversion to China: implications for Labour in Hong Kong. The International Journal of Resource Management 8:5 October 1997. Pg 667-668
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A new political division emerged in the 1990s with the founding of a more westernized and aggressive union federation. This perpetuated the fragmentation of the union movement in Hong Kong and has led to few gains for labor politically. The restricted and pluralist nature of the labor movement has led unions to find other means to support workers and gain membership, mostly focusing on the community rather than the workplace. In order to better represent the needs of common workers, labor unions must agree on a more cohesive platform and curtail internally divisive competition. A cooperative and communicative structure between labor, employers, and the government would lead to a better functioning society. This paper will discuss the barriers to a more cohesive structure of labor organization and how unions have adapted to the constantly changing and often hostile political and industrial environment in Hong Kong to retain an important though limited role as the voice of the common worker.
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I: A History of Control The historically weak state of unions in Hong Kong cannot be understood without first explaining the effect of the changing government policies upon them. The legal framework of industrial relations has slowly transitioned from one of almost total voluntarism to one of increased legalism.4 This transition can be largely attributed to the lack of advocacy by unions in creating minimum working standards as a part of the employment contract through collective bargaining with employers.5 Likewise, the lack of advocacy by unions in the workplace is symptomatic of the government policies and actions regulating them. Voluntarism to legalism Following in the British tradition, the colonial government implemented a labor relations policy of voluntarism based upon the ideology of laissez-faire until the end of the 1960s when mass protest sparked a flurry of labor legislation. Voluntarism has been summarized as the legal abstention of the judiciary from industrial relations, collective laissez faire allowing free negotiation between employers and unions in the work place, and the prominence of collective bargaining above legal requirements imposed by the government.6 Under this framework, labor in Britain was well organized and able to force concessions from employers through collective bargaining within the voluntary governmental framework. In contrast, labor in Hong Kong was fragmented and rarely able to force concessions from employers or set up collective bargaining agreements. Labor unions were basically unregulated until the labor unrest resulting in the Hong Kong Canton Boycott Strike of 1925 and 1926, led by seamen as Hong Kong was primarily a trade depot at the time. This in turn led to the Illegal Strikes and Lockouts Ordinance (ILSO) in 1927. The ILSO made it illegal to organize a strike that was anything but a furtherance of a trade dispute such as one political in nature, involving more than one industry, or considered coercive towards the government such as a strike in the public utilities sector.7 It also made the use of union funds for political purposes outside the territory illegal. The main objectives of the legislation after the strike was to foster responsible trade unionism, contain popular upheavals over working conditions, and to eliminate the ability of Triads and other criminals to hide behind labor organizations.8 This legislation was justifiable at the time because the labor unions of the period were mostly used as spokesmen for the anti-western labor movements in Southern China and for criminal activities. 9 However, the prerogative of the government to 4
Ng Sek Hong 1982 op. cit. Ng Sek Hong. Labor Relations and Current Conditions in Hong Kong. The MacMillan Press Ltd., London. 1989. pg 54-55. 6 Ng Sek Hong 1982 op. cit. Pg 748 7 Chow, Kwok-keung, Ng, Sek-hong “Trade unions, collective bargaining and associated rights : the case of Hong Kong� in Chao,Kenneth and Betsy Lai. Labour Relations and Law: Thoeries, Cases and Labourmanagement Issues in Hong Kong. Open Learning Institute Press, Hong Kong, 1997 Pg 205-237 8 England, Joe 1989 op. cit. Pg 105-106 9 See England, Joe 1989 op. cit. Pg 97-117 for the detailed activities of historical activities of trade unions and large protests. 5
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interfere with protests and strikes has remained a debilitating force against organized labor ever since. This has proved effective in keeping unions docile even during periods of government permissiveness simply because of the threat of legal action against them. In addition, the Public Order Ordinance (POO) requires a license to be obtained in order to hold a public protest of over 30 people. The license must be applied for at least 7 days before the protest through the Commissioner of Police, though the POO was revised in 1980 to make registration of protests with the Commissioner of Police easier. 10 The license can be denied if for any reason the protest is expected to disturb public order, giving the police and the government great room for interpretation of illegal protests. Without a license or if the protest or strike is declared disruptive, the organizers can be declared in violation of the law and arrested. These two ordinances have been used by the government and police to disrupt and discourage any major challenges of protest or industrial action by unions. A policy for increasing the right of workers to organize did not emerge until the 1939 Butters Report, which recommended mimicking the rights given to British Unions, granting limited negative immunities from prosecution. 11 The report set the guidelines for the establishment of a Labour Department and of the Trade Unions and Trade Disputes Ordinance, the first legislation to ensure rights to labor unions. These recommendations were not heeded until the establishment of the Labour Department in 1947, coinciding with the end of WWII and in response to the intense flow of immigrants from the Mainland. The Trade Union Rights The Trade Union Ordinance (TUO) is the major body of legislation that governs trade unions. The ordinance was originally established under the name of the Trade Unions and Trade Disputes Ordinance (TDO) in 1948 based on the British Model Trade Union Ordinance (BMTUO) of 1941.12 The British ordinance instructed all colonies to draft an ordinance on trade union rights using it as a model, though Hong Kong did not comply until the increased union activity after the war made it necessary. Borrowed from the British ordinance are negative immunities for union members from prosecution such as the right to peaceful picketing and the removal of liability for charges such as restraint of trade, conspiracy, or breach of contract due to union activities. Also from British law is the lack of positive rights for workers to suspend their employment during a strike, legally enforce collective bargaining agreements, or forcefully gain union recognition from the employer. Guaranteed to registered unions under the current TUO is the right of corporation, which includes the ability to own property, enter into contracts, to sue and be sued. Amalgamation or federation of unions was originally limited to unions within the same 10
Ng Sek Hong 1989 op. cit. Pg 103-104 H.R. Butters, Report by the Labour Officer on labour and labour conditions in Hong Kong, Hong Kong, Government Printer, 1939 12 The similarities of TDO with the BMTUO is found in Ng Sek Hong 1982, op. cit. pg 749
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industry in order to continue to limit the ability of labor to organize mass protests.13 Now amalgamations are allowed across industries, but not federations. For this reason, the umbrella federations are not actually registered under the TUO, though the unions that comprise them are. At the same time that the ordinance on trade unions was enacted, the Societies Ordinance (SO) was revised so that all official social groups had to register under the SO except trade unions. Thus, multi-industry federations are registered under the SO and do not officially hold the same rights as unions. This further limits the power of collective labor movements and is part of the historical reason for the weakness of a unified labor movement in Hong Kong though the government has practiced a general permissiveness towards the federations acting like unions.14 The major difference from British trade union regulation was the compulsory registration of trade unions, the forbiddance of using funds politically, and the restriction of international association. In 1948, Hong Kong was experiencing the most active period of union protests, most of which were political in nature.15 This explains some of the additional regulations created to control the disruptive powers of trade unions and limit political and criminal activities. The inability of unions to use funds politically was meant to limit their power and also the ability of Beijing and Taipei to influence domestic Hong Kong politics through their respective puppet union federations. Under the Trade Union Registration Ordinance (TRO) of 1961 regulation was increased and the new Registry of Trade Unions was given the power of regulating and enforcing unions’ creation and dissolution, annual financial reports, statutory rights provided to members, amalgamation with other unions, and non-interference from employers. Prosecution and regulation of Trade Unions was tight from 1950-1970 and many unions were dissolved by the Registrar.16 No major changes then occurred in labor legislation until the next major labor disturbances, stirred in part by the civil unrest on the Mainland created during the Cultural Revolution and in part by general worker unrest. In response to the Star Ferry Riot of 1966 and the Civil Disturbance of 1967, and under pressure from British labor unions, the Employment Ordinance was enacted in 1968. The large scale riots indicated the need for more workers rights to be explicitly guaranteed by the government. The riots also exposed the inefficacy of highly restricted organized labor to ensure sufficient rights for workers in Hong Kong. Though the riots were encouraged by left-wing unions under communist ideology, their swiftness and mass appeal has been attributed to the general discontent of workers at the time. In reaction to the riots, the transition from voluntarism to legalism in industrial relations was accelerated and establishment of the Employment Ordinance was the launching pad. Had unions been more representative of workers in the workplace, the general worker discontent might have been much less, and the labor legislation would have been unnecessary and would not have gotten the support of 13
Ng Sek Hong, Sally Stewart, Wan Fun-Ting. Current Issues of Work Place Relations and Management. Hong Kong: Centre of Asian Studies, University of Hong Kong, 1997, Pg 178 14 ibid Pg 179 15 England, Joe 1989. op. cit. Pg 111 16 Fosh, Patricia et al “Government supervision of trade unions in Hong Kong: colonial powers, patterns of enforcement and prospects for change� in Fosh, Patricia et al. Hong Kong Management and Labour: Change and continuity. Routeledge, London. 1999 Pg 243-245
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employers who influenced government policy. In partial acknowledgement of this, a change in the policy of the government in prosecuting trade unions from one of aggression to one of relative benevolence began in the 1970s.17 The Employment Ordinance Created in 1968, the Employment Ordinance (EO) remains the backbone of employment policy in Hong Kong. The ordinance covers a wide range of employment issues including: the regulation of contracts of employment, the protection of wages, paid maternity leave, rest days, hours of work, sickness allowance, statutory holidays with pay, severance payment on redundancy, long service payment, protection against antiunion discrimination, paid annual leave, and the control of employment agencies. 18 The EO does not include universal requirements for maximum working hours, minimum wage, pension requirements or rights to collective bargaining. Part IVA of the EO gives individuals the right to become a member or an officer of a union or start their own union through the Registrar and forbids employers from preventing union formation or membership or discriminating against members or officers. However, there has never been a successful case against an employer for discrimination towards an employee based on union affiliation.19 For example, in 1984 a strike was by the Mass Transit Railway Union over recognition that was not being granted by the Mass Transit Railway Corporation.20 The Mass Transit Railway Corporation fired all of the strikers and rehired all but 13. Included in the 13 were the union chairman, vice-chairman, and secretary. Discrimination charges were never proved and the sacking of union leaders continues to this day. Following the Employment Ordinance, labor legislation increased dramatically. The average annual quantity of labor legislation doubled in the years 1969 to 1977 compared to the years before 1968.21 The increased legislation was caused by the urgent need to ensure stability in the colony and to force employers to provide workers with adequate compensation to quell discontent. The legislation also came as a result of determination from the British government to ensure labor rights in Hong Kong as a result of the 1967 riots.22 However, the inadequacies of employee-employer consultation in the workplace were not solved by the EO and it soon became clear that the weakness of unions in this area made it necessary to legislate a solution. The legislation passed in 1973 and 1975 with the creation of the Labour Tribunal Ordinance and the Labour Relations Ordinance. The Labour Relations Ordinance The Labour Relations Ordinance (LRO) is another major step in the transformation from voluntarism to legalism. In order to compensate for the vacuum left by weak unions in 17
Ibid Pg 245 Ng Sek Hong 1989 op. cit. Pg 46 19 Chow, Kwok-keung, Ng, Sek-hong 1997 op. cit. 20 England, Joe 1989 op. cit. Pg 228 21 Turner et. Al. The Last Colony, but Whose? Cambridge University Press, Cambridge. 1980 Pg 105 22 Fosh, Patricia et. al. 1999 op. cit. Pg 245 18
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industrial relations, the Labour Relations Service (LRS) was created to manage collective labor-management relations and trade disputes. The LRS includes administration and conciliation in regards to the EO and the LRO.23 The LRO was necessary due to the immaturity of unions in dealing with employers on behalf of employees. However, many unions and federations in Hong Kong find the protections offered by the Labor Relations Department to be insufficient still. Maybe the most important component of the LRO relating to trade unions is that it repealed the ISLO. To compensate for this, an official “cooling off period” is included in the LRO that can be ordered by the Governor or Chief Executive to force the suspension of a labor dispute for 30-60 days.24 Thus the power of the government to restrict and discourage industrial action remained mostly intact. Though the government policy became one of increased benevolence towards the unions in the 1970s, the creation of the LRO challenged the need for unions and a large drop in union membership occurred in the private sector. Labor unions had primarily offered welfare services up until then. After the passage of the LRO, private sector unions had to redefine themselves in order to survive. Maturing little in the workplace, unions have developed their influence and membership in the political arena since the 1980s, though they are still grossly outnumbered by representatives from business. The roots of labor’s representation in the government stem from the Labour Advisory Board, which proved inadequate in representing the interests and the views of labor to the government. Labour Advisory Board From the development of the Labour Advisory Board (LAB), the intended influence of labor can be seen to grow over time but remain limited in its influence on government policy. Originally created in 1927, the LAB consisted of only business elite and was meant to advise the Governor on labor issues. 25 It represented the first official recognition of the importance of labor issues in the territory and eventually played a part in the incorporation of labor into the LegCo constituencies. In 1946, it became a wholly appointed tri-partite body, with three representatives from European employers, three from Chinese employers, and three from employees. The LAB then reported to the newly created Commissioner of Labor, who was the official chairmen of the board, instead of the Governor. In 1950, it was reconstituted with four members representing employers and four representing employees. Of each four, two were elected by their respective unions, and two were appointed by the government. This was the first introduction of elections into the LAB and represented labor union’s first opportunity to play the role of elector.
23
Ng Sek Hong 1989 op. cit. Pg 48 Labor Relations Ordinance Section 35, 36. 25 The progression of changes in the seats on the board is detailed in the Labor Advisory Board Report 2001-2002. http://www.labour.gov.hk/public/dd/lab/report/2001-2/index.htm 24
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In 1977, the board was reformed again to consist of six employer representatives with four elected by employer unions and six employee representatives with only three elected by employee unions. One of the appointed employee representatives was then replaced by an elected one in 1985 to make membership even between employers and employees. Both employers and employees then got to elect an additional representative in 1989, with the total still equaling twelve. One representative for each group is still appointed by the government. Thus the reluctance of the government to give labor organizations even a small level of political influence becomes clear by the slow incorporation of labor representatives into the LAB and the one representative still appointed by the government. The intention of the LAB since 1946 has been to recommend policy based on consensus between employee and employer representatives. The board was basically ineffective and apathetic until the pro-China labor organization, the Hong Kong Federation of Trade Unions (FTU), ended its boycott in 1980 to support the new opening up policy in the PRC, finally making the board somewhat representative. 26 Even then, the board’s influence has been quite limited being only an advisory body to the government with no power to directly propose or pass legislation. Before labor was given any representation in the LegCo, the LAB was the only official way for unions to affect government policy besides protests. To supplement its limitations, the LAB has the ability to create committees as it sees fit to help it research the diverse areas for which it must advise. The first committees were created in the 1970s to help steer the dramatic increase of labor legislation. Currently, there are five committees including: the Committee on Employees' Compensation, the Committee on Employment Services, the Committee on the Implementation of International Labour Standards, the Committee on Labour Relations, and the Committee on Occupational Safety and Health. The Committee on International Labour Standards is responsible for encouraging the adoption of International Labor Organization (ILO) Conventions. It also keeps a record of every convention that Hong Kong already satisfies. ILO Conventions Pressure to adopt International Labor Organization (ILO) conventions has been another driving force in Hong Kong’s labor legislation development. 27 Since the United Kingdom was the official signatory for adoption of ILO conventions in Hong Kong, it put a great deal of pressure on the often reluctant colonial government to adopt conventions after the riots in 1967.28 In 1978, Hong Kong adopted International Labor Convention (ILC) No. 144, created in 1976 by the ILO. The convention pertained to creating tripartite consultations on ILC’s and their implementation domestically. In order to adopt 26
The LAB is discussed at length in Miners, Norman. “The Representation and Participation of Trade Unions in the Hong Kong Government.” In Jao, Y.C. et. Al. Labour Movement in a Changing Society: The Experience of Hong Kong. Centre of Asian Studies, University of Hong Kong. 1988 Pg 40-47 27 Ng Sek Hong et. al. 1997 op. cit. Pg 174 28 Ng Sek Hong 1989 op. cit. Pg 43
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this convention, the Committee on the Implementation of International Labor Standards was created under the LAB. Through the creation of this committee, Hong Kong was given a governmental body to act as an advocate of international labor standards. Hong Kong has now implemented more than 41 ILC’s, with about two-thirds of them being left completely unaltered.29 The enforcement of so many ILC’s shows Hong Kong’s current approach of well established legalism for certain labor rights. The ILO has continued to recognize Hong Kong after its reincorporation with China and continues to encourage the further adoption of its conventions.30 However, Hong Kong has still not adopted many ILC’s such as legal enforcement of collective bargaining, minimum wages, and maximum working hours. A Growing Dependence Due to the past structure of employment, with small and medium sized enterprises (SME) making up 30%-40% of total employment, many firms used the increased government regulations of employment starting in the late 1960s as a guide against the uncertainties of the free market.31 The increased legislation and regulation led to a populous that increasingly became dependent on the government to provide them with employment protection and rights and to set minimum working standards.32 This caused government legislation to become a standardized maximum benefit and wage package that could be obtained by many employees, with little or no chance of a better deal. 33 The development of such labor legislation in Hong Kong did not come at the insistence of a unified labor union movement. The colonial government never intended for unions to be strong, fearing the will of the mobilized masses. Instead a partnership was created early on between business and government that excluded labor. The considerable power that the government has to regulate unions under the TUO and to quell protests as provisions of the LRO and POO have contributed to cautious and apathetic unions even when in practice the government has been lenient.34 In the British tradition, unions were given negative rights in the various ordinances, but never positive rights such as a requirement of recognition from employers or the ability to enforce collective bargaining agreements. Instead of increasing workers rights to collective action, legislation was introduced after the late 1960s to ensure certain basic rights and allow voluntary consultation through the government. Thus unions, employers, and workers alike, have had little incentive to put their time and resources into workplace consultation or collective bargaining agreements. The inability of unions to unite and force legislation to increase such rights as collective bargaining is characteristic not only of the laws regulating unions, but of the structure and history of the unions themselves.
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http://www.labour.gov.hk/eng/rbo/content3.htm http://www.ilo.org/public/english/region/asro/beijing/hongkong.htm 31 Turner et. Al. The Last Colony, but Whose? Cambridge University Press, Cambridge. 1980. Pg. 81 32 Ng Sek Hong 1982 op. cit. Pg 749-751 33 Ng Sek Hong. Industrial relations and society: The Hong Kong Case. Industrial Relations Journal, Autumn 1984, Vol. 15 Issue 3. Pg 69-70 34 Fosh, Patricia et. al. 1999 op. cit. Pg 239 30
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II: The History of Labor Unions: Weak Roots The structure of organized labor in Hong Kong is a cyclical one in which the members, objectives, and political orientations have changed periodically, but the pluralistic and unfocused nature has remained. Unions have faced many obstacles in recruiting membership that have limited their strength. These weaknesses have been well documented in established literature which I will now summarize. Other than sporadic periods of mass protest such as the 1926 and 1967 disturbances, the labor movement in Hong Kong has been unable to unite towards common goals. 35 Primarily, they have almost never been able to mobilize as a single entity due to the persistent left-right divide.36 Although there was a brief period of cooperation in the 1980s between the left and right wing unions, it was overshadowed in the 1990s by the rise of a new more militant confederation of trade unions. 37 Instead of focusing on economic issues, the largest union federations have historically focused on political issues and gathering popular support for their respective ideologies. The political nature of unions has historically been unappealing to the refugee population who mostly came to Hong Kong to escape the social unrest and political movements on the mainland such as the Civil War and the Cultural Revolution.38 The largest union federations have a legacy of self-enforced policies to keep a low profile so as not to receive too much negative attention from the colonial government or to stir disapproval from the PRC. Other than short lived periods of mass protest, unions have not generally encouraged strikes, but instead have come in after a spontaneous strike has arisen in a conciliatory role. There have been periods of labor unrest stirred by the unions and federations, but they have generally expired upon harsh governmental reactions to extended stoppages such as the frequent deportation of union leaders in the 1950s.39 Besides the political leanings, it is often cited that Chinese culture has a distaste for confrontation.40 Compounding this, most employers have been unwilling to recognize unions, considerably weakening the ability of unions to recruit members and represent workers in the workplace.41 Combined with the support of the individual contract by the government and employers, this led to little union organization outside of the political federations until the growth of white collar unions starting in the 1970s primarily in the
35
Ng Sek Hong. Are Trade Unions Obsolete in Hong Kong? Industrial Relations Journal, 1982, Vol. 13 Issue 3. Pg 64. 36 Turner et. Al. Between Two Societies: Hong Kong Labour in Transition. Center of Asian Studies, University of Hong Kong. 1991. Pg 98 37 Ng Sek Hong, Olivia Ip. Phenomenon of Union Exhaustion: Is there a ‘Third Way’ for Trade Unionism in Hong Kong? Journal of Industrial Relations, Sep2003, Vol. 45 Issue 3, p378, 17p 38 Ng Sek Hong 1984 op. cit. Pg 69 39 England, Joe 1989 op. cit. Pg 115 40 Ng Sek Hong 1989 op. cit. Pg 89 41 Ng Sek Hong et. al. 1997 op. cit Pg 183
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Civil Service.42 However, these white collar unions have failed to coordinate amongst themselves and tend to be internally focused, thus not contributing to a cohesive labor movement either. Outside Interference and Colonial Insecurity Up until the 1980s, the union movement was characterized by divisive allegiances to Beijing and Taipei. The Communist-Nationalist divide was a substantial rift in the union movement. Currently the largest of trade union federations, the Hong Kong Federation of Trade Unions (FTU) has been explicitly pro-China since its official registration in 1949. On the other side of the divide was the Hong Kong Trade Union Congress (TUC), also registered in 1949, which was supported by and explicitly pro-Taiwan. These union federations were able to affiliate with international powers because of their registration as societies instead of official unions. Except for some staff, all federation members are also members of an affiliated union, thus they still have the rights accorded to union members. Though cut off from many of the realities of common life in Hong Kong, the colonial government was aware of the political affiliations of the union movement. Because both sides of the FTU-TUC divide represented mobilizing ideologies of powers more familiar to the majority of the population than the occupying British, the unions were a legitimate threat to colonial rule. The colonial government was thus not keen to increase the power or political influence of the union movement. Unions were kept out of the political process as much as possible with the one exception being the LAB, which could only make policy recommendations and was boycotted by the FTU until 1980. More recently, the Communist-Nationalist divide has become less significant in Hong Kong and the TUC has lost its place as the dominant opposing force to the FTU. Once the largest federation, the TUC now has 39 unions and 19,971 members as of 2004 compared to the FTU’s 154 unions with 285,403 members. 43 Unwilling to recognize Beijing to this day, the TUC’s membership has dwindled since the signing of the Joint Agreement. Though they cannot be as openly supportive of Taiwan anymore, they do still organize small protests and try to spread awareness of workers rights violations through newspaper coverage. Their resources have become extremely limited now, only being able to collect .1% of members salaries as dues, and no longer receiving international support. 44 Taking the role of the TUC starting in the 1990s as the ideological rival of the FTU is a pro-democracy union known as the Hong Kong Confederation of Trade Unions (CTU) which claims independence from outside influence other than some international labor organizations such as the International Confederation of Free Trade Unions (ICFTU). 42
Leung, Hon-Hoi “The growth of White Collar Unionism in Hong Kong” Pg. 385 in Chen, Edward K.Y., Russell Lansbury, Ng Sek-Hong, and Sally Stewart. Labour-Management Relations in the Asia-Pacific Region. Centre of Asian Studies, The University of Hong Kong. 1992. 43 Trade Union Annual Statistical Report 2004. Registry of Trade Unions, Labor Department. http://www.labour.gov.hk/eng/labour/content3.htm. 44 Based on my conversation with Lee Kwok Keung, Chairman of the TUC.
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The HKCTU Founded by the Hong Kong Christian Industrial Committee (CIC) in response to the Tiananmen Square incident of 1989, the CTU was formed as a coalition of unions willing to take a more militant stance. 45 The CTU was meant to be a new chapter in labor unionism in Hong Kong, focusing on labor law consultation, labor disputes, union organization and founding, and vocational training for the unemployed.46 Although the CTU does not have an explicit international benefactor, it has arisen to take the place of the TUC in aggressively opposing the FTU. The CTU has grown very quickly in the last fifteen years and now rivals the FTU with a current membership of 51 unions and 113,324 members in 2004.47 The recession caused by the Asian Financial Crisis led to a period of accelerated expansion based on the CTU’s reputation as an aggressive advocate of workers rights. However, the rapid growth of the CTU and the unwillingness of the CTU and FTU to work together has led to the re-polarization of organized labor since the 1990s. Whether it is the TUC or the CTU that is polarizing the movement, it has had a similar result upon the labor movement. The focus is shifted away from economic aspects, such as collective bargaining and advocacy of employees rights in regards to employment, to a competition for members and spreading a particular political ideology. Even though the CTU has focused more on economic factors, it has placed its push for democracy as its most prominent and vocal goal while the FTU supports the system of FC. These federations not only compete for members in the same industry, but also within the same enterprises. This increases the difficulty for employers to recognize a union and causes divisions in the labor movement at the most basic level. Employer Organizations There are also well established employer unions in Hong Kong that have representation in the legislature and the Labour Department. The five organizations with current representation on the LAB are the Chinese General Chamber of Commerce, the Employers' Federation of Hong Kong, the Hong Kong General Chamber of Commerce, the Chinese Manufacturers' Association of Hong Kong, the Federation of Hong Kong Industries. These organizations haven’t needed to be very strong because they have never faced a strong, aggressive, militant, and cohesive employee union movement in the workplace. 48 Private sector employers in Hong Kong are extremely reluctant to recognize unions in large part because they are not legally required too. The unwillingness of employers to engage and recognize unions also stems from the pluralistic representation of workers within enterprises and from a historical legacy of apathy towards the political ideologies 45
Snape, Ed and Andy W. Chan “Hong Kong trade unions: in search of a role.” in Fosh, Patricia et al. Hong Kong Management and Labour: Change and continuity. Routeledge, London. 1999 Pg 264 46 Based on my conversation with Vincent Sung, Organizing Secretary of the CTU 47 See note 43 48 Ng Sek Hong 1989 op. cit. Pg 81
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represented by unions. 49 Even if employers were legally required to recognize and bargain with unions, enterprises with multiple unions would have difficulty choosing which union to recognize. In response to this problem, the Labour Department has tried to create programs that attempt to foster communication and agreements between employees and employers independent of unions. The failures of Joint Consultation In 1967 the government adopted a policy of encouraging formal joint consultation in the workplace. This was an attempt to circumvent the weakness of unions in developing workplace consultation. However, no more power was given to agreements reached under state sponsored joint consultation than those reached under collective bargaining between unions and employers. Thus joint consultation proved ineffective and failed to become popular due to lack of support by employers and apathy by employees. This failure was also attributable to the large number of small firms who would not benefit from such a formal structure of employment contract.50 The inefficacy of the Labour Department program of joint consultation supports the complaints put forth by the CTU that the Labour Department programs are often not effective or timely enough to sufficiently protect workers from employer abuse.
49 50
Ibid Pg. 89 Ibid Pg 111-115
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III: Supply and Demand of Unionism – A competition The competition created by the left-right divide in unionism has important economic implications. Union activity can be related to the demand for union membership and the supply of union services in a simple supply and demand graph.51 Analyzing unions and union federations in Hong Kong under this framework can help explain their actions and the low overall unionization rate. If P represents the equilibrium price of membership and U represents the equilibrium percent of the workforce unionized, then supply and demand shifts will cause changes in both of these variables. In this graph, the demand curve, D, represents the demand for union membership. The factors that affect demand for membership include the net benefits of membership, such as any services or wage raises, and individuals taste preferences, such as political ideologies. A union has incentives to attempt to increase the demand for their services, which would shift the demand curve right and increase the revenue they can raise, thus enabling them to shift the supply curve to the right to offer more services and attract more members. Price of Membership
S
P
D U
% of Workforce Unionized
Since the Hong Kong trade union movement has had unpopular political ideologies and limited workplace services provided for members in the past, it is not surprising that demand for membership has been low. What is surprising is that unions have not tried to raise the net benefits of membership in the workplace more. Instead, they have historically focused on appealing to individuals’ ideological tastes and providing limited welfare services while maintaining a low profile with the employer. Legal limitations52 and the Communist/Nationalist divide provide an explanation for this. 53 After the government increased its welfare services in the 1970s, it caused a further decrease in demand for union membership. 54 Even after the political representation of unions 51
Graph and justification for the subsequent analysis was taken from Ehrenberg, Ronald G and Robert S. Smith. Modern Labor Economics: Theory and Public Policy. Addison Wesley, Boston, 2003. Pg 437-443 52 Turner et. al. 1991 Pg 158-162 53 Ng Sek Hong 1989 op. cit. Pg 78 54 England, Joe 1989 op. cit Pg 130
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increased in the 1980s and 1990s, workers have had little incentive to join a union rather than free riding any general employment benefits that the federations can acquire for workers through legislation. The determinants of union supply S include union costs, legislation, and employer willingness to bargain. As discussed earlier, legislation has not been particularly helpful to unions, offering some negative rights and high government control. Unions have had little incentive to unite to pass needed protective legislation, furthering the dependence of workers on the government instead of unions. Costs of union activities have been relatively high due to competition between rival factions. Worst of all, is the unwillingness of Hong Kong employers to recognize unions and bargain with them. It was estimated around 1980 that only 5 % of workers were employed under collective bargaining agreements, a statistic that shows the low recognition of unions by employers. 55 There have been no indicators that this statistic has risen much since then. These factors should lead to a short supply of union services, higher fees for membership and a lower percentage of unionization. In practice, membership fees have not gone up in Hong Kong. Instead, supply of union services has been curtailed, subscription levels have been very low and income has been supplemented by business ventures and vocational training.56 Other factors of demand and supply also point towards continued weak unionization in Hong Kong. Demographic factors such as the increase of women in the work force and decrease in expected tenure are both factors that decrease demand for unions since both decrease expected employee tenure, decreasing the expected benefits from membership.57 As employment shifts between sectors, it can change the supply and demand for unionization. The shift to manufacturing in Hong Kong and the subsequent shift to tertiary services could be another cause of historically low unionization.58 Inter-Industry Comparison Despite the various explanations for weak unions in Hong Kong, certain industries have been well unionized traditionally. The first strong unions, which overlapped into China, were based on shipping and include the Hong Kong Seamen’s Union of the 1920s riots, which has a current membership of 18,989 and association with the FTU. 59 The transportation industry is the second most unionized sector in Hong Kong and has many very old unions, many of which have affiliated with the FTU or more recently the CTU. In 1981, the transportation and communications sector was by far the most unionized with a 58 % unionization rate. Overall in 2004, the Transportation, Storage, and 55
Turner et. al. 1980 op. cit. Pg 33 Snape, Ed and Andy W. Chan 1999 op. cit. Pg 255-270 57 These two demographic changes are noted in Ng Sek Hong 1989 op. cit. Pg 79 58 Turner et. al. 1991 op. cit. Pg. 55-68 59 All figures in this section taken from annual reports created by the Registrar of Trade Unions and from the Census and Statistics Bureau. The 2004 Trade Union Annual Report can be found at http://www.labour.gov.hk/eng/labour/content3.htm 56
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Communications Sector had 107 unions with 107,665 members and a 29 % unionization rate.3 Thus the unionization rate has been cut in half from 25 years ago. However, the number of employees in the sector has doubled, with the number of union members remaining constant. This is a common trend, with union membership being slow to adapt to the quickly changing trends in the labor market in Hong Kong.60 The most unionized industry now is the Community, Social and Personal Services. This sector includes Public Administration with 152 unions and 193,895 members and the Educational, Medical, Dental and Health Services, and Welfare Services with 138 unions and 140,198 in 2004. Overall the Community, Social, and Personal Services accounted for 360 unions with 353,805 members and a unionization rate of 43 % in 2004. This was over half of the unions and union members for all of Hong Kong and accounted for about 10 % of the entire work force. The increase in unionization from that of 32 % in 1981 is consistent with the rise in white collar unionism after the 1970s. Business services also has two of the largest unions in 2004 the Hong Kong Union of Chinese Workers in Western Style Employment with 24,015 members and the Clerical and Professional Employees Association with 16,973 members, both affiliated with the FTU. This too is reflective of the growth of white collar unions. In contrast, industries such as manufacturing, public utilities, construction, import/export, wholesale, retail, financing, and insurance, are much less unionized. This does not mean that these industries are not unionized, and in fact many of them are currently experiencing increased industrial action such as the construction industry and increased rates of unionization such as manufacturing. Manufacturing was 35 % unionized in 2004 compared to 7 % in 1981. However, this figure seems less dramatic when the total employment in manufacturing is considered. There were more union members in manufacturing in 1981 than in 2004. The apparent rise in unionization rate has occurred because there are now only 1/6 as many workers in the industry. Part of the reason for traditional discrepancies in unionization rates between industries stems from the FTU and the TUC organizing politically strategic sectors that have remained more organized even after the fade of the ideological divide. 61 The other explanation has to do with the quickly changing industrial employment in Hong Kong. When manufacturing grew quickly after WWII, unions were slow to raise the rates of unionization. Likewise, with the growth of the tertiary sector and decline of manufacturing, unions have been slow to develop in comparison to the employment growth in the tertiary industries.62 Unionization Rates, Strikes and Work Days Lost If one were to just look at the unionization rate in Hong Kong, it would not show the true weakness of unions in the workplace. The trade union participation rate has been around 60
Turner et. al. 1991 op. cit. Pg. 57 ibid 62 Ibid Pg 55 61
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22% the last five years, with a small drop in 2004 to 21 %.63 This number is lower than average among developed countries, but is not the lowest by far, the United States and France for example have lower rates.64 The unionization rate peaked at 24% in 1975, dipping to 16% in 1985, and returning to 20 % in 1995 where it has basically remained. The dip can be attributed to the decline in membership in the FTU and TUC as Mao was disgraced and as the return to China became eminent.65 However, Hong Kong’s almost non-existent percentage of workers covered by collective bargaining is much lower than almost all industrial countries. Maybe more important than the unionization rates are the number of work days lost and strikes per year. Since most unions have rarely been militant and supportive of strikes, Hong Kong has gained a reputation with investors worldwide for its lack of strikes and work days lost.66 The appeal of this statistic to investors is an argument often used against increasing workers rights to strike. According to the Labour Department, there were only two strikes involving 143 employees in 2004.67 However, not all strikes are recorded and there is evidence to suggest that the labor department statistics of strikes underrepresented the actual number of times industrial action is taken.68 For example, the CTU claims that they organized 34 strikes and protests involving almost 1000 workers in 2004.69 Although not all of theses gatherings might have qualified as a strike under the Labour Department’s definition, the magnitude of discrepancy suggests that strikes are underreported. This argument becomes even stronger when one considers that the FTU also organizes industrial action on behalf of workers70, though with much less frequency than the CTU and only as a last resort. Work days lost is measured per 1000 salaried employees and wage earners. High rates of working days lost generally come from better protected unions who are able to sustain a strike longer. The lack of positive rights to strike contributes to the low number of work days lost in Hong Kong even when many workers are involved such as in the year 2003, when there was one recorded strike involving 300 employees, but a very low rate of .05 work days lost. 71 If the right to strike was enhanced, such as a legal suspension of employment, then the number of work days lost per worker per year would be expected to rise. Employers argue that increased ability to strike will make the Hong Kong economy less competitive globally. This may explain why the right to strike has never been strengthened by law.
63
See note 43 Ehrenberg, Ronald G and Robert S. Smith 2003 op. cit. Pg. 425 65 England, Joe 1989 op. cit. Pg 125 66 Fosh, Patricia et al “Hong Kong at the end of the twentieth century: management and labour trends.” in Fosh, Patricia et al. Hong Kong Management and Labour: Change and continuity. Routeledge, London. 1999 Pg. 18 67 Figures showing disputes, strikes and working days lost for 2000-2004 can be found at: http://www.labour.gov.hk/eng/public/iprd/2004/home/fig3_2to3_7.html 68 England, Joe 1989 op. cit. Pg 222 69 Information given to me by the CTU through email 70 Snape, Ed and Andy W. Chan 1999 op. cit. Pg 265 71 See note 67 64
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Labor Surplus Since the 1960s, Hong Kong has had very low unemployment rates typically around 2-3 percent. Unemployment rose considerably for the first time in the recession caused by the Asian Financial Crisis in 1997. The seasonably adjusted unemployment rates for the last ten years are as follows: 72 1995 1996 1997 1998 1999
3.2 2.8 2.2 4.7 6.2
2000 2001 2002 2003 2004
4.9 5.1 7.3 7.9 6.8
2005
Jan 6.4 Feb 6.1 Mar 6.1 Apr 5.9 May 5.7 (provisional)
The economic arguments against collective bargaining and a universal minimum wage become stronger in periods of labor surplus. This makes the adoption of these policies in the near future unlikely, especially with the inability of unions to agree on a specific proposal.73 However, the Hong Kong economy is now in a period of recovery and the unemployment rate has been steadily dropping since its peak at 7.9% in 2003. Much of the recent growth in the union federations came from the discontent caused by the recession. Proposing and supporting the legal enforcement of wages paid upon insolvency and offering re-training courses for the unemployed became important roles for unions. When workers are not being paid, such as in the construction industry, they may not have time to wait for the Labour Department to hear their claims. 74 Instead they may need to take industrial action and look to the CTU for help. The CTU benefited in membership greatly from the recent recession. Its growth rate has slowed now that the climate for employment is improving. The proliferation of the CTU based on workers’ desire for industrial action is evidence of the need for better consultative means in the private sector. In contrast, the public sector has developed a more formal structure of consultation between the government and Civil Service unions.
72
From the Hong Kong Economy website: http://www.info.gov.hk/hkecon/labour/index.htm 73 Based on my conversations with Ng Sek Hong at Hong Kong University 74 See note 46
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IV: Civil Service Unionism The proliferation of unions in the Civil Service since the 1970s shows the powerful affect that a benevolent employer attitude towards unions can have on unionization rates and workplace consultation. As of June 2005, the Civil Service included 164,600 employees making the government of Hong Kong the largest single employer.75 Likewise, the Civil Service is by far the most unionized sector in Hong Kong. It has had more favorable conditions for larger and more aggressive union action than the private sector, including a single employer, more formalized consultation, an important role in the overall stability of the city, the encouragement of unionization in the 1970s and the ability to find discrepancies between pay scales and salaries. 76 It also has many well educated, white collar, professionally trained, and articulate employees.77 Most of the largest Civil Service unions are unaffiliated with the union federations, with notable exceptions of the Government Employees Association, founded in 1986 with current membership of 26,845 and affiliation with the FTU and the Hong Kong Professional Teachers Union, founded in 1973 with current membership of 76,887 and affiliation with the CTU.78 The largest Civil Service union, with members in all different services and pay scales, is the Chinese Civil Servants Association. It is one of the oldest unions registered under the TUO in 1949 with current membership of 87,183 and is unaffiliated with any federation. Only 32 of the 152 Public Administration unions were affiliated to a federation in 2004. The presence of large, well organized and politically neutral unions in the Civil Service has led to more industrial action being taken by Civil Servants and more collective bargaining for wages. The ability of Civil Service unions to avoid the overt politicization found in most private sector unions and focus more on direct advocacy of working conditions has led to a very high unionization rate since the 1970s, often over fifty percent. In stark contrast to employers in the private sector, the government actually encouraged the development of unions in the Civil Service in the 1970s in an attempt to qualm unrest caused by inflation at the time.79 The government has taken a different approach to the unions in the Civil Service than private employers have to their unions. The government actually recognizes its unions and has set up many formal consultative bodies that make the operation of unions much more effective. Civil Service employees are viewed as essential to the functioning of Hong Kong and were considered particularly important in securing stability during the transfer of sovereignty. Therefore a much more cautious and conciliatory approach has been taken by the government in dealing with industrial action and union development in the Civil service compared to the private sector.
75
From the Hong Kong Civil Serivice Website : http://www.csb.gov.hk/hkgcsb/showdisplay.jsp?page_no=540&lang_iso=en_uk 76 England, Joe 1989 op. cit. Pg 79, 87 77 Leung, Hon-Hoi 1992 op. cit. Pg 385-387 78 See note 43 79 England, Joe 1989 op. cit Pg. 88
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In 1961, there were 15 Civil Service unions with 11,349 members. By 1981, there were 134 Civil Service unions with 63, 218 members. 80 Discontent in the Civil Service has led to the development of extensive consultative bodies and committees for determining fair wages. The first of these bodies was the Senior Civil Service Council of 1968 which dealt with general disputes, but not wage claims.81 The council was tri-partite but only consisted of members of three of the oldest Civil Service unions on the staff side. This soon proved to be inadequate as disputes over wage in the Civil Service continued to rise dramatically throughout the 1970s.82 Standing Commission on Civil Service Salaries and Conditions The Standing Commission on Civil Service Salaries and Conditions (SCCS) was created in 1979 to advise the Governor on policies governing the salaries and conditions of Civil Service workers.83 The commission was created in reaction to a more aggressive policy of protest taken by the Civil Service unions in the 1970s and its membership consists of all government appointees. It has since been merged into the Joint Secretariat for the Advisory Bodies on Civil Service and Judicial Salaries and Conditions of Service (JSSCS), which manages the disciplined and judicial services as well.84 The Pay Survey and Research Unit (PSRU) of the JSSCS puts out the annual report on salaries and conditions that is then verified by the tripartite Pay Trend Survey Committee. The PSRU is supposed to determine if Civil Servants are being paid more or less than their private sector counterparts. All of this bureaucracy is meant to safeguard Civil Service workers and appease their unions so as not to lead to wasteful and debilitating strikes. It is also meant to keep wages in the Civil Service from outpacing those of the private sector, leading to excessive costs for the government. Landmark Civil Service Disputes In contrast to the private sector, the regulating bodies of the Civil Service were created in response to aggressive activity by unions. Throughout the 1970s, unionization and industrial action in the Civil Service increased quickly and dramatically. Near the end of the 1970’s, major disputes in the Civil Service sector led to a strengthening of unions and the creation of regulatory bodies such as the SCCS. The first major Civil Service dispute occurred in 1976 over the comparability of wages and pay structure within the Civil Service and was successful after a court ruling. This success encouraged further action in the following years.85 In 1977 the police protested an aggressive campaign to root out corruption in their ranks by the newly created Independent Commission Against Corruption (ICAC).86 They formed a de facto union as a rank and file police association to do so. Likewise, the Hong Kong Professional Teachers Union organized a sit in, in 80
Ibid Ibid Pg 83-86 82 ibid Pg 89 83 Ibid Pg 90 84 For further information please visit http://www.jsscs.gov.hk/en/sccs/sccs.htm 85 England, Joe 1989 op. cit. Pg 90 86 Ng Sek Hong 1989 op. cit. Pg 98 81
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1978. 87 Since 1978, there have been protests over pay from social welfare officers, typists and stenographers, nurses, dispensers, air traffic controllers and more. However, in 1977, the government passed Civil Service Regulation (CSR) 611, allowing them to legally suspend pay of workers who take industrial action. This regulation was put into practice in 1978 to slow the popularity of industrial action, but did not cause unions to completely abandon aggressive industrial tactics. The Civil Service disputes of the 1970s sometimes led to concessions by employers, but also led to a new tradition of union action. Though the government has created many consultative bodies for the Civil Service, the controversy over wages has continued to this day, with the methodology of pay determination constantly called into question by Civil Service Unions. Recent developments have indicated that the government still neglects proper consultation with its unions and can make changes unilaterally when it sees fit. Post 1997 Wage Debate The most recent conflict in the Civil Service tested not only the strength of the unions but also the post-colonial government and the upholding of the Basic Law. 88 Under Article 100 of the Basic Law, Civil Service workers are guaranteed that their salaries will not drop below 1997 levels. However, with the serious budget deficit that has emerged, there has been considerable pressure to stream-line the Civil Service and cut salaries. This controversy has led to union activism on behalf of Civil Service workers. The dispute began in 2002, when the Financial Secretary at the time decided on a 4.75 % reduction of wages across the board for the Civil Service. This was suggested independently from any consultation with Civil Service employees or unions and without relation to the annual pay trend survey which had not been issued for 2002 at that time. The controversy stirred by this was not enough to prevent the LegCo from passing wage cuts even after about 35,000 workers protested in the streets. When further cuts were deemed necessary to ease continuing budget deficits in 2003, negotiations were held with some union leaders. With the approval of Executive Councilor Cheng Yiu-tong, president of the FTU, an agreement was reached to lower wages under the 0-3-3 plan. In the plan, no wages would be decreased in 2003, followed by 3 % in 2004 and 2005, lowering the wages to exactly what they were in 1997. Many Civil Service unions did not feel properly consulted on this wage decrease and decided to take the case to court. After a ruling in favor of the government, a second appeal ruled in favor of the unions. The government then appealed the verdict to the Court of Final Appeal, which ruled on July 14, 2005 that the pay cuts were not in violation of Article 100 or 103.89 This ruling was a major victory for the government, but the unions vowed to continue to challenge the government in any lowering of wages or benefits for Civil Service workers. This case shows the aggressiveness of Civil Service unions. Though most of the unions in the Civil Service are not affiliated with a federation, they were able to act cohesively to 87
Leung, Hon-Hoi 1992 op. cit. Pg 388 Li, Joseph. “Saga dates back to bid to reduce budget deficit.” China Daily 2005-07-14 06:33 89 Li, Joseph and Eddie Luk. “Top court justifies civil service pay cut.” China Daily 2005-07-14 06:33 88
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protest in this case. This case also shows that even the government is not required to consult unions, as it sidestepped unions in most of the decisions surrounding the controversy. Even the strongest unions in Hong Kong can be sidestepped by the most accommodating employer. Without further legal rights for unions, only the benevolence of the employer can raise the legitimacy of unions in workplace consultation and collective agreements.
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V: Re-Politicization and Community Involvement Though they have not gained much power legally or in the workplace, unions in Hong Kong have found ways to circumvent their constraints and gain power and influence in less constrained areas. During the 1980s, the union structure was less politically divided, as the focus became the imminent return to China and the Beijing-Taipei divide lost much of its relevance. 90 The 1980s were characterized by a severe drop in overall unionization from 25% in 1975 to 16% in 1983, though most of those lost were FTU affiliates. The FTU has since changed its policies and strategies dramatically to cope with the changing environment and recruit new membership.91 With the emergence of the CTU in the 1990s and the added representation in the LegCo, unions have found themselves as politically focused as ever in the last 15 years. The return to a political focus has continued to prove divisive and has led to few real gains for the labor movement. 92 Although labor legislators were able to hastily pass through legislation before the return of Hong Kong to China, it was suspended and then repealed within a few months of the Handover.93 Since then, the labor movement has been unable to unite to push through legislation on their top priorities such as a minimum wage, maximum working hours, and further protection of wages upon insolvency.94 Likewise, some of the political stances being taken by labor are serving to harm employer relations, most notably policies on migrant workers. Thus the re-politicization of labor unions as the voice of the labor movement in the legislature brings hope to the further political representation of labor, but so far has done little to improve the conditions of workers on the ground level. The Voice of the People On the positive side, unions have become more outspoken and been able to appeal to the public and the government through their new legislative positions. Labor was granted an additional FC in the LegCo in 2000, increasing the total seats to three. The FTU is pushing for more FC seats for labor, but is unlikely to succeed as the democratic party, aligned with the CTU, are pushing for universal suffrage in the elections of 2007 and 2008 and thus are opposed to the entire FC system.95 Currently the FTU holds two of three FC seats in the LegCo, the other seat going to a legislator affiliated with the Hong Kong and Kowloon Federation of Labour Unions, a purported neutral federation of about 30,000 members. There are currently four labor union representatives that have been elected by way of GC’s, two under CTU affiliation in the New Territories East and Kowloon West and two 90
England, Joe 1989 op. cit. Pg 120 Turner et. al. 1991 op. cit. Pg 98-102 92 Ng Sek Hong 1997 op. cit Pg 669 93 Ng Sek Hong and Olivia Ip 2003 op. cit. Pg 387 94 Ibid Pg 670 95 Li, Joseph. “New seats or no seats in 2008, that is the question.� China Daily 2005-08-11 06:48 91
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under FTU affiliation in the New Territories East and Kowloon East. The new power found by labor unions through election in the LegCo has not made them much more effective in influencing policy since 1997, but it shows promise for the future. It is unlikely that labor will be able to obtain many more FC seats in the near future, but it is conceivable that they could continue to win more GC seats, which will increase their power especially if FC’s are eventually eliminated. The CTU boycotts the labor FC’s, but has focused their resources on the two territories where they have obtained a GC seat, setting up many vocational centers. Since both the FTU and CTU are well organized and have influential leaders, the biggest constraint to labor being elected into more GC seats is a lack of resources and their inability to work together. A New Militancy The CTU and FTU have very different ideologies for the representation of labor in the territory. The CTU has taken an active role in organizing workers with grievances into new unions. These new unions will then often organize protests at the workplace and lawsuits against union based discrimination with the advice and support of the CTU.96 Though no employer has been convicted of union based discrimination, the CTU has great hope for an upcoming trial which involves a letter written by the employer explicitly stating union activity as the reason for dismissal.97 The CTU does not actively recruit member unions, but instead acts as a resource for workers and unions to contact upon dispute or grievances. It then encourages affiliation to unions who use its services. Protests, consultation with the employer, and lawsuits are organized by the CTU in conjunction with unions it helps create. A particularly active sector for protest has been the construction industry since the 1998 recession. Many workers are going unpaid and do not have time to wait for the Labour Department to process and act on their claims. Thus the CTU has been actively organizing protest by construction workers, sometimes resulting in violent clashes. 98 This is a very different focus from the FTU who mostly set up consultations with employers over worker grievances. The FTU has a policy of referring grievances to the Labor Department if they cannot be resolved and does not encourage industrial action. 99 A New Function Rather than becoming more aggressive in industrial action, the FTU has found other ways to foster membership beyond political ideology. The union federation is taking on a new role in the community or the “third sector” in order to gain membership and provide services for a wider constituency. 100 The FTU has opened eleven district service offices that focus on the neighborhood around them, with a multi-faceted role as educators, recruiters, and campaigners. By offering classes to members and non-members alike, union district offices help people to adapt to transitions in the labor market through 96
For a list of major victories of CTU protests in 2003 see http://www.ihlo.org/item1/item1ba.htm See note 46. 98 Ibid. 99 Based on the HKFTU report emailed to me by the FTU Public Relations representative. 100 Ng Sek Hong and Olivia Ip 2003 op. cit. 97
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training courses and give the unions a chance to spread their message and build their membership. The district offices are also a chance for unions to get a better sense of the grievances of people on the street level and attempt to alleviate them through legislation and advocacy. 101 This is also useful to the FTU in determining its platform for GC elections. This new role is far from the traditional one of western labor unions, but fits well with the tradition of the FTU in offering welfare services instead of workplace consultation and collective bargaining. This also fits well with the FTU ideology, stemming from Beijing, to foster a harmonious society. Collective bargaining and the unions that support it are now in a general decline worldwide as a result of increasing global competition and a need for added flexibility. 102 The CTU has also begun pursuing the neighborhood services strategy especially in the regions it has GC legislators. However, its resources are largely consumed by its aggressive activities in the workplace. The vocational training offered to the unemployed will help to make the Hong Kong labor market more flexible to the dynamic changes that occur such as the flight of major manufacturing to mainland China. Beyond vocational training, recreational courses are also offered such as cooking or learning to play the violin. This new activity of unions overlaps the activities of social services. In turn, this had led to increased collaboration with social services providers and other NGO’s. Recruitment Regardless of their new place in Hong Kong politics, labor unions and federations can only be as powerful as the membership that supports them. The two opposing union federations have taken somewhat different approaches to raising members, but have both been relatively successful. The FTU takes a more direct approach to recruitment of new members, for example contacting new unions upon formation and asking them to affiliate. 103 The CTU on the other hand, attempts to make a name for itself as the defender of abused workers and relies on this reputation to convince workers to contact them to help organize consultations and protests. In addition the CTU has gained publicity by appealing to international forces such as the United Nations and the United States Congress in its fight for universal suffrage in Hong Kong. 104 Both federations have begun using the neighborhood strategy of offering classes at district offices and recruiting members through this forum. The fees for these courses also offer an alternative source of income for the federations beyond membership dues and donations.
101
See note 73 Ng Sek Hong and Olivia Ip 2003 op. cit. Pg 378-382 103 Based on my conversation with Staphany Wong, founding member of the Workers Rights Union in Hong Kong in 2004 who was contacted by the FTU after registering her union. 104 “On Democracy in Hong Kong� Congressional Testimony of Lee Cheuk-yan, General Secretary, Hong Kong Confederation of Trade Unions. The Epoch Times, March 10, 2004 102
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A New Party? The lines between union and social movements have become blurred in Hong Kong. Unions have come to be the representatives of workers in the legislature, though they are considerably outnumbered by employers. Union federations do work together with the political parties in Hong Kong, but are not able to agree on every item of their platforms. Labor already holds a total of 7 LegCo seats, which could represent a considerable voting block. Nevertheless, the divide between the FTU and the CTU prevents them from leveraging this power as a unified platform to the government. This is unlikely to change in the foreseeable future as the two organizations also represent key political dividing lines on the pace and direction of democratic reform in Hong Kong, with the FTU in the politically conservative camp and the CTU in the pro-democracy camp. Recent developments do show hope for labor’s future political development. In 2008, there will be an additional 10 legislative seats, creating further opportunity for labor representatives in LegCo.105 There are even signs that the FTU is trying to transform itself into a Labor Party. It recently announced that in the future it will run elections under its own banner rather than associating with the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), a long-time pro-Beijing party. As long as considerable support from labor rests with the CTU however, the FTU cannot claim to be the sole representative of labor interests of Hong Kong.
CONCLUSION The most important constraint of Hong Kong’s labor union movement is the polarization of the CTU-FTU divide. Having multiple unions per enterprise not only wastes resources, it makes employer recognition very difficult to obtain. In the future, the characteristics of the divide are likely to mimic the development of Hong Kong, either towards further democracy and autonomy or towards further incorporation of control from Beijing, with the respective union alliance rising to dominance. Now that Hong Kong’s sovereignty rests with China, the FTU has a secure place in the future of the society. The fate of the CTU is contingent on further democratic development. Until the pace and direction of political reform is resolved, a unified labor movement is not possible. In spite of the divisions and constraints that they face, union legislators are leading the pursuit of minimum wage, maximum working hours and collective bargaining in the current political debate. Unions are increasing the representation of workers in the political arena and act as an important watchdog to employer domination of government policy. Although their effect on government policy has so far been limited, there is hope for future compromise and negotiation with other influential constituencies.
105
The HKSAR Government is expected to announce reforms to add 5 GCs and 5 FCs seats for the 2008 election. While the 5 FCs seats will likely go to the District Council Functional Constituencies, this will give a boost of opportunities to local grassroots politics, and thus offer opportunities for labor representatives.
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