In addition to the initial fund of MOP160 million (US$20 million), another yearly five per cent from the fee that employers pay to hire non-resident workers will be put aside as the source of the fund to guarantee creditor’s rights for the protection of wages, said Cheang Chi Keong, President of the Third Standing committee of the Legislative Assembly, after meeting with the government on Friday afternoon. Despite several twists and turns, such as the change of cabinet in the government, legislators have finally finished the final reading of the draft for the Labour Creditor’s Rights Guarantee system. The bill is expected to be handed to the plenary session of the Legislative Assembly to be approved article by article. Once passed, the bill will pass into law on January 1, 2016. Innovation The biggest breakthrough of the new draft is the cancellation of the ceiling of the credit amount. The initial proposal suggests a ceiling of the creditor’s rights to be ruled by the Chief Executive. Legislators of the Third Standing Committee have argued that it would damage the employees’ rights and demanded the lifting of the ceiling. The new government finally concurred. However, there is still a timeframe of a retroactive six months of the rights, which means an employee can only ask for six months of salary that are behind payment. The government explained that it’s not diminishing the employees’ rights, rather its urging them to use their rights and protect themselves as soon as a problem emerges. In addition, the government argued that from the statistics provided by the Labour Affairs Bureau that the majority of labour creditors’ disputes only focus on credits dating back six months from the date the labour contract is terminated. Non-resident workers covered The new bill also seeks to protect the rights of non-resident workers. Thus, an annual five per cent of the fee that the government has been charging the employers for hiring non-resident workers will be injected into the creditor’s guarantee fund. “According to the numbers the government provides, the amount will be around MOP10 million. It doesn’t matter whether it’s more of less, it shows a change,” said Cheang Chi Keong. In addition, the draft mandates that an employee must submit the application to the fund within 45 days of the termination of the labour contract. If in a financial critical situation, the fund can advance as much as 50 per cent of the owed pay or other claims the employee cannot get from the employer once the Labour Affairs Bureau has affirmed the liabilities involved. Upon payback by the employer of owed pay or other claims, the employee will have to return the government’s advance payment to the fund, the bill stated. However, if the court affirms the liabilities, the fund will press the employees for the advance money. Patch The draft seeks to solve the loopholes left by the new Social Security Law that came into effect in 2011. The Social Security Fund is used to advance money for employees when their salaries are behind payment. The new bill proposes employees be taken care of through the fund to be established with assistance from the Labour Affairs Bureau. The bill was first generally approved by the plenary session of the Legislative Assembly last June. The new bill proposes that the Labour Creditor’s Rights Guarantee Fund has its own administrative, financial and autonomy of assets. Technical and further administrative support will be provided by the Labour Affairs Bureau. The organisation, management and operation of the fund will be mandated by supplementary administrative regulations.
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