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Hung out to dry in Hong Kong

Our government is bringing overseas workers here to alleviate labour shortages and then failing to protect them when their employers abuse the system, writes Boase Cohen & Collins Consultant Melville Boase.

Hong Kong, 27 September 2018: According to our government, Hong Kong’s international reputation as a human trafficking black spot is undeserved. It argues the city is doing much to combat the problem and that our existing laws and legal framework are sufficiently robust and comprehensive to render no new legislation necessary.

This is not a view shared by countless observers – myself included – from a range of backgrounds including the legal profession, NGOs, charities, academia, overseas governments and major corporations. We believe there is overwhelming evidence that proves Hong Kong is a source, destination and transit point for the trafficking and forced labour of men, women and children.

In fact, a case which Boase Cohen & Collins is currently handling demonstrates that not only is the Hong Kong government ineffective in combating human trafficking, it is complicit.

Allow me to introduce you to the Supplementary Labour Scheme. This is a government programme which, according to the Labour Department’s website, “allows employers with genuine difficulties in finding suitable local staff at technician level or below to import workers to alleviate the manpower shortages”.

But the case I’m about to outline is a good example of how our government helps recruit people to come to work in Hong Kong with guarantees regarding their wages and working conditions only to later say these guarantees are worthless.

Our client, let us call him Mr A, is a cook from the Philippines who was recruited under the Supplementary Labour Scheme to work as second chef in a restaurant here. He signed his first two-year contract in May 2013 and this was supplemented by a letter of guarantee signed by an individual with links to the restaurant company. After the first contract was satisfactorily completed, Mr A entered a second two-year contract with the same employer in December 2015, the contract again being supplemented by a letter of guarantee, this time signed by a different individual.

The restaurant’s lease ran out in June 2016, causing it to move to new premises, and Mr A continued working for his employer at the new location. But he was dismissed in January 2017 when the company went into liquidation, at which time he was owed a considerable amount of money under the terms of his two contracts. Not only had the restaurant been underpaying him on his hourly wage, it also owed him overtime pay and pay in lieu for unclaimed rest days, statutory holidays and annual leave.

Mr A took his case to the Labour Tribunal. At this juncture, it should be pointed out that most overseas workers in a similar situation would be forced to simply give up and go home penniless, since the Supplementary Labour Scheme dictates they have to leave Hong Kong within two weeks of the end of their employment. Those who do stay need to apply regularly for visa extensions and are forbidden from working. Mr A was fortunate in that he has a sister living here and he was able to stay with her.

In October 2017 the Labour Tribunal found in Mr A’s favour and he was awarded more than HK$92,000 and almost HK$66,000 under the terms of his two contracts. The judgments were subject to interest, so the final figure amounted to more than HK$316,000.

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The Supplementary Labour Scheme and the Protection of Wages on Insolvency Fund are both administered by Hong Kong’s Labour Department.

Unable to ascertain if his former employer was still in operation, Mr A applied for Legal Aid to recover the judgment sum from the two people who had acted as guarantors. In doing so, he admitted to the Legal Aid Department he did not know the relationship between the guarantors, nor did he know their financial means.

The Legal Aid Department issued demand letters to both guarantors, but one letter received no reply and the other could not be delivered. It also checked with the Land Registry and discovered that the guarantors were not the legal owners of their residential premises. Therefore, the Legal Aid Department concluded, Mr A had failed to demonstrate that either of the guarantors of his government-approved contracts had sufficient financial resources to pay the judgment. Hence, on 14 June this year, it wrote to Mr A to inform him his application for Legal Aid had been refused.

While this was going on, Mr A also applied for an ex gratia payment from the Protection of Wages on Insolvency Fund, which is administered by the Labour Department – the same people, remember, who run the Supplementary Labour Scheme – for the very purpose of assisting workers whose employers have gone broke.

His application was refused on the grounds that his employer had not obtained official permission from the Immigration Department to change his place of work during his two-year contract. The Labour Department argued that since he had continued working at the restaurant after it moved premises, he had breached the conditions of stay on his employment visa. “Your claim arising from employment at any location other than the work address as stipulated in the employment contract would not be considered,” the Labour Department told him in a letter.

But what about the wages he was owed from the period before the restaurant moved? No joy here, either, since there is a six-month application deadline. The restaurant’s lease agreement expired on 9 June 2016 and he submitted his initial application for payment from the fund on 12 January 2017, so it was refused “in accordance with existing policy”.

Boase Cohen & Collins has taken up Mr A’s case and is appealing against the decision to refuse Legal Aid. We feel it is unreasonable and impractical to expect a worker from overseas to be able to investigate and verify the financial circumstances of either the employer or the guarantors. That is the duty and obligation of the authorities, in this case the Labour Department and Immigration Department, and it should be done before the contract has been approved and the work visa granted.

To spell it out clearly, under the International Labour Organization Convention on Migration for Employment, to which Hong Kong is a party, is it an obligation of the government to enforce the terms of the contract on which a foreign worker is brought into Hong Kong. Further, it is a criminal offence for a person to guarantee payment of wages when not financially able to do so. It should be for the authorities in Hong Kong to prosecute such a person.

For the record, Mr A’s first Legal Aid appeal hearing last week was adjourned because the Legal Aid Department was unable to summon anyone senior enough to appear on its behalf. So Mr A has had to apply for another visa extension – the cost being HK$190 each time, paid for out of his own pocket – and wait a while longer.

On this point, it is worth noting that the Immigration Department receives income of several millions of dollars each year in visa fees paid by domestic helpers and other overseas workers as they pursue claims against defaulting employers through the Labour Department and Labour Tribunal. The “two-week rule” is indeed hugely profitable for the government.

If Legal Aid is refused for an overseas worker to pursue claims for unpaid wages, it really does open the door to further human trafficking. Rogue employers and guarantors will know they can get away with underpaying, or not paying at all, or failing to fulfil other terms of the contract, because this government is not interested in policing its own employment scheme.

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The flag of the International Labour Organization – Hong Kong is a signatory to the body’s Convention on Migration for Employment.