SLW's speaking notes on labour, manpower development and retirement protection policy areas tabled at LegCo Finance Committee special meeting
Following are the speaking notes of the Secretary for Labour and Welfare, Mr Chris Sun, on labour, manpower development and retirement protection policy areas tabled at the special meeting of the Legislative Council (LegCo) Finance Committee today (April 9):
Chairman and Honourable Members,
Recurrent government spending on labour and manpower development in 2025-26 is estimated to be $3,480 million, representing an increase of about $350 million (11.1 per cent) over the revised estimate of $3,140 million last year. It accounts for 0.6 per cent of the total recurrent government expenditure. I will highlight the key areas of work in respect of the relevant areas in the coming year.
Abolishing the Mandatory Provident Fund (MPF) offsetting arrangement
The abolition of the MPF offsetting arrangement will take effect on May 1 this year, alongside the launch of a 25-year subsidy scheme on the same date. I would like to remind employers again that the abolition has no retrospective effect, and the pre-transition portion of severance payment (SP) and long service payment for existing employees can still be offset after May 1. Dismissing employees before the abolition takes effect will not save money.
Enhanced Supplementary Labour Scheme (ESLS)
The Labour Department (LD) has implemented the ESLS since September 4, 2023, to suspend the general exclusion of the 26 job categories as well as unskilled or low-skilled posts from labour importation under the previous Supplementary Labour Scheme for two years. As at March this year, the ESLS received over 12 000 applications for importing about 107 000 workers. During the period, over 7 800 applications involving around 54 000 imported workers were approved. The LD is reviewing the ESLS, including its coverage, operation and implementation arrangements; measures to promote and ensure employment priority for local workers; measures to protect the rights and benefits of imported workers; as well as other requirements and matters relating to the ESLS. The Government will take full account of the views of stakeholders, including employer associations and labour organisations, in mapping out the way forward.
Statutory Minimum Wage (SMW)
The SMW rate will be raised from the prevailing level of $40 per hour to $42.1 on May 1, providing further protection to low-income employees. Moreover, the Government is firming up a new annual review mechanism for future SMW rates. The first rate derived under the new mechanism is expected to take effect on May 1 next year.
Amending the Trade Unions Ordinance (TUO)
The Government also proposes to amend the TUO to better safeguard national security and strengthen the regulatory regime for trade unions. The Labour Advisory Board (LAB) and the Legislative Council (LegCo) Panel on Manpower supported the amendment proposals. The Government will introduce the Bill into the LegCo this month.
Relaxing the "continuous contract" requirement under the Employment Ordinance (EO)
Based on the consensus reached by the LAB, the Government is amending the EO to relax the working hours threshold of the "continuous contract" requirement, enabling more employees to enjoy fuller protection. The Government will introduce the Bill into the LegCo this month.
Increasing the ceiling of ex gratia payment on SP under the Protection of Wages on Insolvency Fund (PWIF)
The Government on March 21 this year increased the ceiling of ex gratia payment on SP under the PWIF from $100,000 plus 50 per cent of any excess entitlement to $200,000 plus 50 per cent of any excess entitlement, further strengthening the protection for the rights of employees affected by business closures.
Strengthening youth employment services
The LD in January this year enhanced the Greater Bay Area (GBA) Youth Employment Scheme to relax the eligibility requirements to include young people aged 29 or below with sub-degree or higher qualifications, and increase the limit of allowance granted to enterprises to $12,000 per young person per month. The LD also raised the upper age limit for participants of the Youth Employment and Training Programme to 29 and introduced workplace attachment opportunities in the GBA to enhance young people's employability.
Re-employment Allowance Pilot Scheme
The LD on July 15 last year launched the three-year Re-employment Allowance Pilot Scheme. The response is very favourable. As at March this year, the Scheme recorded over 38 000 participants and more than 16 000 placements, mobilising more older and middle-aged persons to join the employment market.
Enhancing occupational safety and health (OSH)
The LD is highly concerned about the levels of OSH risks across different industries, as well as the changes in these risks, with a particular focus on the construction industry. On top of routine OSH inspections, the LD conducts special enforcement operations, safety audit inspections and in-depth inspections targeting high-risk processes and construction sites with poor safety performance. In addition, the LD has stepped up district patrols targeting minor repair, maintenance, alteration and addition works to curb unsafe work activities.
The LD will also enhance the application of technology by introducing small unmanned aircraft in the second half of this year to assist with inspections, evidence collection, law enforcement operations, etc.
Last year, the LD brought the remaining four elements of the Factories and Industrial Undertakings (Safety Management) Regulation into operation and revised the Code of Practice on Safety Management to strengthen the safety management system. The LD also revised the Code of Practice for Bamboo Scaffolding Safety and the Code of Practice for Safety and Health at Work in Confined Spaces to further strengthen bamboo scaffolding safety and enhance OSH in confined space works. Following the revision of the Guidance Notes on Prevention of Trapping Hazard of Tail Lifts in March this year, the LD will revise the Code of Practice for Safe Use of Tower Cranes and the Guidance Notes on Safe Use of Power-operated Elevating Work Platforms in 2025-26 to enhance the safety requirements for operating the relevant machinery.
Talent attraction
To address the labour shortage across industries, the Government, on top of the ongoing promotion of local training, has also implemented various well-received talent attraction measures, including the launch of the Top Talent Pass Scheme (TTPS) since the end of 2022.
As at end-March this year, over 460 000 applications were received under various talent admission schemes, of which over 300 000 were approved. During the same period, a total of about 203 000 talents arrived in Hong Kong. Some of them brought along families to settle in Hong Kong, and about 189 000 spouses of the approved applicants and their children under the age of 18 arrived in Hong Kong. These incoming talents and their families bring about a positive impact on Hong Kong's labour force and add new impetus to the local economy. The first batch of visas under the TTPS have started to expire from end-December last year, with nearly 10 000 TTPS visas estimated to expire by the middle of the year. As only a small number of applications have been processed at present, we will analyse in detail the relevant statistics when a certain number of applications for extension of stay have been accumulated and release them at an opportune time.
The Government is reforming various aspects of the talent admission regime to continue to strive to trawl for and retain talents. We have also initiated the arrangements under the Quality Migrant Admission Scheme for proactively inviting top-notch and leading talents to come to Hong Kong for development, which have been endorsed by the Committee on Education, Technology and Talents led by the Chief Secretary for Administration. Under the new mechanism, we will, having regard to various development needs of our country and Hong Kong, proactively persuade the target top-notch talents to settle in Hong Kong, promoting Hong Kong as the focal point of international high-calibre talents. The Government will provide throughout the process various personalised facilitations to the invitees. It is well appreciated that these top-notch talents are highly sought after worldwide. To avoid affecting the lobbying, we will not disclose the specific operational details about the invitation mechanism.
In addition, to address the acute manpower shortage in the local skilled trades, we will enhance the General Employment Policy and the Admission Scheme for Mainland Talents and Professionals to allow young and experienced non-degree talents with relevant professional and technical qualifications to come to Hong Kong to join the skilled trades facing acute manpower shortage. Meanwhile, the 2023 Policy Address announced the launch of the two-year pilot Vocational Professional Admission Scheme (VPAS). The number of eligible programmes in the 2025/26 admission cohort will be increased to 34. While applications will be only open next year upon the graduation of the first batch of eligible non-local students, we have noticed that since the announcement of VPAS, many non-local students have been attracted to enrol in the eligible programmes that had difficulties enrolling local students in the past. The Vocational Training Council will enhance its promotional efforts and support non-local graduates in applying under the scheme for staying in Hong Kong for one year to seek jobs relevant to their disciplines.
Hong Kong Talent Engage (HKTE) provides comprehensive one-stop support to incoming talents. It organises online and offline workshops (including Cantonese learning courses), seminars and job fairs centred on living, employment and entrepreneurship in Hong Kong, as well as social inclusion activities (including the Talent+ Volunteer Programme), to help incoming talents settle in Hong Kong, and promote Hong Kong's advantages to the world and recruit talents. HKTE organised the inaugural Global Talent Summit．Hong Kong (GTS) in May 2024 and will organise the second GTS early next year to reinforce Hong Kong's status as an international hub for high-calibre talents.
Reform of the Employees Retraining Board
The Employees Retraining Board (ERB) is taking forward its reform and has since early this year implemented short-term measures to enhance its services, including lifting the restriction on educational attainment of trainees. In the medium to long term, the ERB will rename the organisation, enhance training and employment support services, strengthen research capabilities, and formulate a pertinent training framework. The ERB will submit an implementation plan to the Government by the end of this year. The Government will continue to work with the ERB to implement the reform, with a view to enhancing local manpower training, upskilling and re-skilling.
To encourage more young people to participate in the Apprenticeship Scheme and join the relevant trades, each registered apprentice, for a period of three years starting from 2024-25, is provided with an additional training allowance of $1,000 per month, and graduated apprentices will be subsidised to undertake upskilling courses of relevant trades. Meanwhile, the VTC receives subvention to organise short in-service training courses with a view to meeting the market demand.
Manpower projection
The LWB released the report on the 2023 Manpower Projection in 2024, projecting that Hong Kong will face an overall manpower shortage of 180 000 by 2028, with over one-third being skilled technical workers. We would commence a mid-term update of the 2023 Manpower Projection in late 2025, with the findings expected to be available in 2026.
Chairman, this concludes my opening remarks. Members are welcome to raise questions.
