Inadequate regulation puts outsourced workers at risk of labour abuses
by Gloria Lee & Jessica Li
Lam Siu Mui (not her real name), a 40-year-old who has worked as a cleaner for more than 20 years, sits with a union organiser and prepares to tell her story. In December, 2014, she started working for a contractor providing outsourced cleaning services for a public housing estate.
But she quit last July when she discovered the company had been cheating on her salary and holidays. “I have never experienced such deception in the 20 years I’ve been working,” says Lam. “I had trusted the company, but I have been hopelessly depressed after this.”
Lam is her family’s sole breadwinner. “I have to feed my parents in the Mainland and my 15-year-old son who lives with me,” she says, “I work two jobs a day.”
Lam trusted her team leader at work so whenever the team leader handed her documents to sign, she would do so without hesitation, even though she could not understand the contents.
“I’m illiterate, I was thankful to have a job,” she explains.
In July, 2015, Lam told her team leader she needed a few days of leave to look after a sick relative in the Mainland. She was shocked when the team leader told Lam she had already used up all her annual leave for 2015. Lam says she had not taken a single day of annual leave that year.
When she announced she was quitting, the team leader changed tack because she wanted to keep Lam on. “She [the team leader] said she could compensate me for all the annual leave days owed to me if I chose to stay,” Lam recalls.
Later, she quit anyway and decided to take legal action against the company with the help a trade union. That was when she says she realised she had been misled to sign documents such as rosters and applications for annual leave. These showed Lam had taken all her annual leave days and had taken regular days off.
In fact, she says, the company had sometimes asked her to work on her days off. “When they told me to work on days off, they didn’t give any reason except to say the company needs me.”
John Leung Yip-hon from the Hong Kong Confederation of Trade Unions has been helping Lam for more than a year. Leung says he handled more than 60 similar cases in 2015. He thinks Lam has little chance of winning in court because the company has all the supporting documents but Lam has only her word.
Leung says it is common practice for contractors to cheat on outsourced workers’ holidays and salary and the government’s policy of outsourcing has led to labour abuses and hurt workers’ rights and livelihood.
He explains that a contractor may only make a profit of around HK$30,000 a month for providing cleaning services on an estate; that is if they do not cheat.
“If a worker normally works eight hours a day at the minimun wage level of HK$32, that’s HK$256 a day,” Leung calculates. “If there are 70 cleaners in the housing estate, the contractor can make an extra profit of HK$17,920 by cheating one day of holiday from each cleaner.”
The government has been outsourcing public services and reducing the number of public servants in order to lower costs and promote efficiency within departments since the 1990s. Currently, the Food and Environmental Hygiene Department, Government Property Agency, Housing Services Department and Leisure and Cultural Services Department are the major departments which employ outsourced services. Together, they account for nearly 90 per cent of all government outsourced workers. Most of these workers are on low wages and lack sufficient protection.
Kwok Lai-shan works as a cleaner, for another private contractor, which she does not want to name. She has been on the job for six years and at 71 finds it is physically arduous. What is more, Kwok says she is required to work on statutory holidays, and when the black rainstorm signal or the number eight gale or storm signal are up. Despite this, she and many others are paid the minimum wage.
Kwok recalls that a few years back, she and six co-workers went to the boss to ask for a raise.
“We did reflect our opinions, but the company told us if we don’t want to work, then we should sign the resignation letter,” Kwok says. “But you know, not everyone can afford to lose the job, and with it the few thousand dollars [a month].”
Law Pui-shan, the Policy Research Officer of the Hong Kong Catholic Commission for Labour Affairs, says workers have minimal bargaining power. Many outsourced workers are not well educated, some are elderly and are afraid of losing their jobs because it would be hard to find another one.
“Contractors don’t need to use guns or knives to intimidate the workers,” Law says, “but they tell the workers that they may lose their job if they disobey.”
Law points out the current situation is abnormal because there is a greater demand for workers than there is a supply.
“If the contractor lacks workers, it should be the employer who doesn’t want you to leave, and should offer better working conditions. But the workers are so scared of the employers.”
Law says this is because there is little protection for outsourced workers. The government will only investigate if there is a complaint. However, workers are afraid to complain because they are afraid of losing their job. The only legal safeguards of workers’ welfare are the Employment Ordinace and the Standard Employment Contract.
But Law says the guidelines in the Standard Employment Contract are very vague, especially those on work safety. It simply states contractors need to follow the Employment Ordinance and to protect the work safety and health of workers. “That is it,” Law says. “But how do you protect? How do you implement? Are there any specific policies?”
Under the existing outsourced services tendering system, private contractors are regulated through a demerit point system. Those contractors who have had a certain number of points deducted will be barred from submitting tenders for contracts. But critics say the system is ineffective. Law Pui-shan says the “buying out” of holidays, problems with work safety, the lack of severance payment and forced resignations have not been included in the demerit points system.
“The demerit points system can no longer successfully monitor private contractors, and protect the rights of workers.” Law says.
According to Law, the government outsourced the responsibility to protect working conditions when it outsourced services. The plight of workers is exacerbated, she says by the “alliances” formed by private contractors.
“It is like contractors allying with each other, one takes the tender for the first three years while the other one succeeds for another three years.” says Law. “The government does not want to offend the private contractors, because it is hard to get contractors now, the government is worried that no contractors will tender and no one will do the cleaning.”
Law estimates there are fewer than 20 contractors bidding for cleaning contracts and suspects this may be why the government is unwilling to improve the monitoring of private contractors. She says the government should encourage new contractors to compete.
Other than that, she thinks the government should strengthen regulations and improve the demerit system, clearly list work safety regulations and step up inspections. Most importantly, Law says there should be more communication among government departments, especially with the Labour Department, to form a strong network to monitor private contractors.
However, Legislative Councillor Leung Yiu-chung who is also from the pro-labour Neighbourhood and Worker’s Service Centre says the government outsourcing policy was an attempt to introduce market forces and reduce costs in the provision of public services. He says that under the “big market, small government” principle, the government would not set up concrete guidelines.
“Flexibility for contractors is essential in outsourcing. Who would still tender when there are so many guidelines restricting flexibility?”
Accordingly, Leung does not think the government will do much to protect the welfare of outsourced workers.
“The contract does not protect the workers. The government simply looks to see if it fits within the law. In outsourcing [services], the government doesn’t care about workers’ welfare.”
Most government departments adopt the lowest bid wins system while selecting private contractors. According to a report conducted by the government’s Efficiency Unit, over 80 per cent of government departments awarded tenders to companies offering the lowest price. In order to offer the lowest price for the bid, contractors tend to offer workers wages no higher than the statutory minimum wage rate.
An attempt has been made to change the situation. Starting from July, a revised outsourcing guideline states government departments have to take into account the wages contractors offer their workers in awarding contracts. However, according to a written reply from the Food and Environmental Hygiene Department (FEHD), “…up to now, the FEHD does not see significant change in the contractors’ committed wage offers since the revision of the relevant guideline in late June this year”.
The Financial Services and the Treasury Bureau said in its reply that it was not possible to assess the impact of the revised guidelines on workers’ wages as departments are allowed to determine the weightings of the assessment criteria when outsourcing, depending on the operational needs.
Paul Yip Siu-fai, professor at Hong Kong University’s Department of Social Work and Social Administration, says it would be best if the government abolished the whole outsourcing system, but he acknowledges this is unlikely.
Yip says the root problem of outsourcing is that neither the government nor society place much value on workers. He adds that in countries such as Britain and Australia, there are much heavier punishments for industrial accidents and deprivation of workers’ rights.
“The deterrent effect of our laws and punishments is weak,” says Yip. “We haven’t made good use of the laws we have in Hong Kong.” This is particularly true in the case of outsourced workers.
Edited by Joey Kwan