CIC hopes revised version will cut disputes over wages
Disputes over wages due to workers would be a thing of the past, or at least reduced to a minimum, when the construction industry fully adopts a model employment contract.
That’s what the Construction Industry Council is hoping would happen as it promotes its revised model contract between employers and workers.
At a press briefing Monday, council chairman Lee Shing-see said disputes over wages stemmed mainly from the longstanding practice of “large-small wages” which the CIC did not support.
In that practice, an employer, usually subcontractor, would agree some terms of employment with a worker in written form such as daily rate but some other conditions would actually be in verbal form.
According to Hong Kong Construction Industry Employees General Union chairman Chow Luen-kiu, the verbal condition was frequently an agreement on piece-work to encourage greater productivity.
A good worker at the height of his powers would have greater productivity and so enjoyed greater take-home pay in excess of the number of days worked.
Conversely, an older worker with lower productivity would see his take-home pay reduced.
Problems arose when a subcontractor was unable to pay his bills and a main contractor had to assess the precise wage entitlement of affected workers.
Since the productivity entitlement was in verbal form and so unverifiable, disagreements frequently arose as main contractors paid workers of the subcontractor based simply on the number of days recorded on site.
As such the CIC proposed a “sunshine policy” with the promotion of the revised model contract that would include any items that in the past would be in verbal form such as the piece-work entitlement.
“This would avoid any disagreements,” Lee said.
Chow said the effect of model contracts could clearly be seen in the sums of wage arrears handled by the union.
Before 2009, the union handled cases of wage disputes and arrears averaging over HK$30 million each year.
But after the first version of the model contract was issued by the CIC in August 2010, there was an improvement as contractors on public works projects adopted the contract.
In 2011, the amount of wages in dispute dropped to HK$14.2 million.
For 2012, the amount rose back up to HK$31.5 million which Chow attributed to the increased workload in both the public and private sectors.
For the first ten months of 2013, despite the increased workload, the total sum in dispute was only HK$15 million.
“At present on public works contracts, the effect can be seen,” Chow said.
On the private sector, only developer giant Sun Hung Kai Properties (0016) was using the model contract, the latest revised version of which was released in March this year.
In fact, the model contract was based on a template used by Sun Hung Kai, according to Chow.
Earlier this month, disgruntled workers of a bankrupt subcontractor held a strike lasting several days at a construction site for the LOHAS Phase Three project over wage arrears totalling HK$9 million.
Lee said in the event of unsatisfactory take-up by the industry the council would consider recommending legislation for compulsory use.
Hong Kong Construction Association secretary general Thomas Tse Che-wah pointed out that use of the model contract would make it harder for subcontractors who had been experiencing payment problems to dispute the amount of wages that would be backcharged by main contractors in subsequent payments to the subcontractors.