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Print articleHong Kong: How the Race Discriminiation Bill affects work place?
December, 2006 -
After more than two years of consultation and discussion since the consultation paper on Legislating Against Racial Discrimination was issued in September 2004, the Home Affairs Bureau finally introduced the Bill to the Legislative Council on 1 December 2006.
One of the major concerns from the employers group with respect to the Bill is the differential treatment by employers between employees on local terms of employment and expatriates on more favourable remuneration package.
As most employers are aware, it is common in Hong Kong that the remuneration package for an expatriate is more “favourable” than that for a local employee of a similar post. For example, an expatriate may have higher amount of housing allowances, education allowances for his/her children, returned air tickets to his/her home country; or even higher salary rank. This is primarily due to the fact that an expatriate employee will need to be compensated for being located outside of his/her home country.
With the introduction of the Race Discrimination Bill, would the difference in remuneration package between expatriates and local employees become illegal?
The main aims of the Bill are to render discrimination, harassment and vilification, on the ground of race unlawful in certain areas of activity, covering the employment field. The term “race” under the Bill means, the race, colour, descent, or national or ethnic origin of a person. However, where an act done on the ground of certain matters specified in the Bill, such act will not be treated as an act done on the ground of the race, colour, descent or national or ethnic original of a person. These exemptions include the nationality, citizenship or resident status of the person under the law of the relevant country, the length of residence in Hong Kong of the person, whether a person is an indigenous inhabitant of the New Territories, whether a person is a Hong Kong permanent resident etc.
The Bill covers six types of discrimination including (a) direct racial discrimination; (b) indirect racial discrimination; (c) discrimination on the basis of the race or ethnic of the spouse or a relative of a person; (d) discrimination by way of victimisation; (e) racial harassment; and (f) racial vilification.
Generally speaking, a person will be regarded as discriminating against another person if on the ground of race, he/she treats that person less favourably than he/she treats or would treat other persons (direct discrimination).
In view of the above, an employer who offers more “favourable” remuneration package to an expatriate than a local employee of a similar position may be caught by the above provision as he/she will be regarded as discriminating against the local employee on ground of race as he/she treats the local employee less favourably (by offering less favourable remuneration package) than he/she treats the expatriate who is in a similar position. This may lead to lawsuits brought by the local employees against their employers who have brought in overseas employees with a better remuneration package than the local employees.
After consulting with various parties, the Legislative Counsel Panel on Home Affairs issued a paper in March 2006, in which it provides that a new exception will be introduced in the Bill for the differential treatment by employers between employees on local terms of employment and employees on the overseas terms of employment under certain circumstances.
This move indicates that the Government recognises that in some circumstances, it is legitimate to provide employees recruited from abroad more favourable terms than local employees because those recruit from abroad have to relocate here. They may face difficulties finding accommodation for the family or a school for their children, and special allowances may be justifiable.
In light of the exception set out in section 13 of the Bill, employers may offer more favourable overseas terms to employees under the following circumstances:
(a) if the employment requires special skill, knowledge or experience not readily available in Hong Kong;
(b) the person possesses those skill, knowledge or experience and is recruited or transferred from a place outside Hong Kong; and
(c) the act is reasonably done for a person so recruited or transferred, having regard to:
i. the prevailing terms of employment offered to persons with those skills, knowledge or experience in places outside Hong Kong; and
ii. any other relevant circumstances (other than the race of the person).
In fact the requirement set out in (a) above is also one of the major criteria in applying for work visa in Hong Kong.
If an expatriate has worked in Hong Kong for seven years, it will be up to his choice whether to apply as a permanent resident in Hong Kong. If he/she does, he/she will become “local” and under the Bill, the employer can no longer offer him/her the more favourable expatriate remuneration package.
In addition, there is a “grandfather clause” in the Bill for existing employees on overseas term (before the race discrimination law comes into effect). The grandfather clause for these employees will apply irrespective of whether or not they are or have become permanent residents of Hong Kong. In this regard, the existing employees on overseas term will not be affected even if they become, or have become, permanent residents.
In view of the new exception set out in section 13 of the Bill, an employer may use it as a defence when a claim of direct discrimination is made by a local employee against the employer.
Other exceptions applicable to employers include a 3-year “grace period”, during which, the general provisions concerning employment will not apply to an employer with not more than 5 employees, though there are different views within the society whether such grace period should be given and whether a 3-year period is too long.
The Government considers that the Bill will render discrimination on the ground of race in the employment field unlawful. However, the above exception will help to ensure that Hong Kong’s position as an international financial and trade centre is not affected.
The Bill was gazetted on 1 December 2006 and was read in the Legislative Council on 13 December 2006 for the first time. Even after the legislation has become effective, in order to assist members of the society to comply with the new legislation, it is important for the Equal Opportunity Commission (the body responsible for implementing the provisions of the new legislation) to prepare appropriate guidelines or code of practice to facilitate the public.
One of the major concerns from the employers group with respect to the Bill is the differential treatment by employers between employees on local terms of employment and expatriates on more favourable remuneration package.
As most employers are aware, it is common in Hong Kong that the remuneration package for an expatriate is more “favourable” than that for a local employee of a similar post. For example, an expatriate may have higher amount of housing allowances, education allowances for his/her children, returned air tickets to his/her home country; or even higher salary rank. This is primarily due to the fact that an expatriate employee will need to be compensated for being located outside of his/her home country.
With the introduction of the Race Discrimination Bill, would the difference in remuneration package between expatriates and local employees become illegal?
The main aims of the Bill are to render discrimination, harassment and vilification, on the ground of race unlawful in certain areas of activity, covering the employment field. The term “race” under the Bill means, the race, colour, descent, or national or ethnic origin of a person. However, where an act done on the ground of certain matters specified in the Bill, such act will not be treated as an act done on the ground of the race, colour, descent or national or ethnic original of a person. These exemptions include the nationality, citizenship or resident status of the person under the law of the relevant country, the length of residence in Hong Kong of the person, whether a person is an indigenous inhabitant of the New Territories, whether a person is a Hong Kong permanent resident etc.
The Bill covers six types of discrimination including (a) direct racial discrimination; (b) indirect racial discrimination; (c) discrimination on the basis of the race or ethnic of the spouse or a relative of a person; (d) discrimination by way of victimisation; (e) racial harassment; and (f) racial vilification.
Generally speaking, a person will be regarded as discriminating against another person if on the ground of race, he/she treats that person less favourably than he/she treats or would treat other persons (direct discrimination).
In view of the above, an employer who offers more “favourable” remuneration package to an expatriate than a local employee of a similar position may be caught by the above provision as he/she will be regarded as discriminating against the local employee on ground of race as he/she treats the local employee less favourably (by offering less favourable remuneration package) than he/she treats the expatriate who is in a similar position. This may lead to lawsuits brought by the local employees against their employers who have brought in overseas employees with a better remuneration package than the local employees.
After consulting with various parties, the Legislative Counsel Panel on Home Affairs issued a paper in March 2006, in which it provides that a new exception will be introduced in the Bill for the differential treatment by employers between employees on local terms of employment and employees on the overseas terms of employment under certain circumstances.
This move indicates that the Government recognises that in some circumstances, it is legitimate to provide employees recruited from abroad more favourable terms than local employees because those recruit from abroad have to relocate here. They may face difficulties finding accommodation for the family or a school for their children, and special allowances may be justifiable.
In light of the exception set out in section 13 of the Bill, employers may offer more favourable overseas terms to employees under the following circumstances:
(a) if the employment requires special skill, knowledge or experience not readily available in Hong Kong;
(b) the person possesses those skill, knowledge or experience and is recruited or transferred from a place outside Hong Kong; and
(c) the act is reasonably done for a person so recruited or transferred, having regard to:
i. the prevailing terms of employment offered to persons with those skills, knowledge or experience in places outside Hong Kong; and
ii. any other relevant circumstances (other than the race of the person).
In fact the requirement set out in (a) above is also one of the major criteria in applying for work visa in Hong Kong.
If an expatriate has worked in Hong Kong for seven years, it will be up to his choice whether to apply as a permanent resident in Hong Kong. If he/she does, he/she will become “local” and under the Bill, the employer can no longer offer him/her the more favourable expatriate remuneration package.
In addition, there is a “grandfather clause” in the Bill for existing employees on overseas term (before the race discrimination law comes into effect). The grandfather clause for these employees will apply irrespective of whether or not they are or have become permanent residents of Hong Kong. In this regard, the existing employees on overseas term will not be affected even if they become, or have become, permanent residents.
In view of the new exception set out in section 13 of the Bill, an employer may use it as a defence when a claim of direct discrimination is made by a local employee against the employer.
Other exceptions applicable to employers include a 3-year “grace period”, during which, the general provisions concerning employment will not apply to an employer with not more than 5 employees, though there are different views within the society whether such grace period should be given and whether a 3-year period is too long.
The Government considers that the Bill will render discrimination on the ground of race in the employment field unlawful. However, the above exception will help to ensure that Hong Kong’s position as an international financial and trade centre is not affected.
The Bill was gazetted on 1 December 2006 and was read in the Legislative Council on 13 December 2006 for the first time. Even after the legislation has become effective, in order to assist members of the society to comply with the new legislation, it is important for the Equal Opportunity Commission (the body responsible for implementing the provisions of the new legislation) to prepare appropriate guidelines or code of practice to facilitate the public.
