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Julita F. Raza And Others v Chief Executive In Council And Others

Judgment Cited authorities 5 Cited in Precedent Map Related
Vincent
Judgment Date19 July 2006
Year2006
Judgement NumberCACV218/2005
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV218/2005 JULITA F. RAZA AND OTHERS v. CHIEF EXECUTIVE IN COUNCIL AND OTHERS

CACV 218/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 218 OF 2005

(ON APPEAL FROM HCAL NO. 30 OF 2003)

_________________

BETWEEN

JULITA F. RAZA 1st Applicant
ERMA C. GEOLAMIN 2nd Applicant
ROSE MARIE V. PASCUAL 3rd Applicant
SOLEDAD A PILLAS 4th Applicant
ENI LESTARI ANDAYANI ADI 5th Applicant
AND
CHIEF EXECUTIVE IN COUNCIL 1st Respondent
DIRECTOR OF IMMIGRATION 2nd Respondent
EMPLOYEES RETRAINING BOARD 3rd Respondent

Before : Hon Ma CJHC, Stock JA & Barma J in Court

Date of Hearing : 25 April and 20 May 2006

Date of Handing Down Judgment : 19 July 2006

______________

J U D G M E N T

______________

Hon Stock JA (giving the judgment of the Court) :

Introduction

1. This case is brought by a number of foreign domestic helpers (FDHs) who contend that a monthly levy imposed as from October 2003 on their employers was and remains in truth exacted from them, the employees, by means of a device, namely, a reduction in the minimum monthly wage contractually payable to them. The minimum wage reduction exercise was, they say, a sham and that the intent and effect of the two measures – the levy and the reduction – was to constitute a levy or tax payable, not by the employers, but by the employees for which levy, as payable by them, there was no legislative authority, wherefore the decisions to impose the levy and the reduction must be quashed. This challenge to those decisions was brought by way of an application for judicial review. The application failed at first instance, and this is the appeal from that decision.

The factual and statutory background

2. The levy of which they complain is known as the employees retraining levy for which provision is made by the Employees Retraining Ordinance, Cap. 423 (‘the Ordinance’). By virtue of section 14(3) of that Ordinance, the Chief Executive in Council may from time to time approve a scheme, known as a labour importation scheme, under the terms of which a monthly levy shall be payable by such employers as are designated or covered by the scheme. That levy has been set by Schedule 3 of the Ordinance at $400 per month, and the total sum payable by the employer is $400 multiplied by the number of months specified in the relevant contract of employment between the employer and the imported employee. Once a category of persons is brought within an approved labour importation scheme, section 14(4) of the Ordinance takes effect as follows:

“An employer may, under the terms of the labour importation scheme, apply to the Director [of Immigration] for permission to employ such persons as imported employees as the Director may, in accordance with a quota allocated by or with the authority of the Secretary [for Education and Manpower] in respect of that employer under that scheme, grant visas to those imported employees for that purpose.”

3. Once the levy is paid, the Director of Immigration is, by section 16 of the Ordinance, required to deposit the levy in an account established for that purpose and to remit it together with any accrued interest to the Employees Retraining Board, a Board established by the Ordinance. By virtue of section 4 of the Ordinance, the function of the Board is to hold the fund upon trust to administer in accordance with the object of the Ordinance which, put broadly, is to provide retraining programmes for eligible employees. The purpose of training or retraining is to arm local workers with such new skills as are demanded by changes in market requirements.

4. Labour importation policy in Hong Kong is as one would expect, and no different from that in many other jurisdictions. Importation of labour is permitted in order to satisfy the needs of local employers who wish to fill job vacancies in respect of which there are no suitable or available local candidates. The policy varies according to the category of skill, so that, for example, foreign professionals are welcomed to settle here and in due course become permanent residents; whereas low-skilled workers who are permitted to work here are subject to a tighter regime that insists upon return or periodic return to their places of origin, so that residence here is for the purpose only of temporary employment and not with a view to acquiring permanent residence status. There are also in place particular schemes for the admission of persons from the Mainland, the details of which have no bearing on the present case.

5. There has for long been a shortage of local full time domestic helpers, especially those who are prepared to stay overnight at their employer’s homes, and the numbers of domestic helpers from abroad has steadily increased so that the number is now in excess of 250,000. Such domestic helpers are admitted on the basis of standard two-year contracts. They enjoy the benefit of a minimum allowable wage (MAW) which is set administratively by the Economic Development and Labour Bureau (EDLB) (and before July 2002 by its predecessor the Education and Manpower Bureau). The object of the MAW is to prevent exploitation of the worker and at the same time to guard against a wage so low as to render uncompetitive those local workers who might wish to obtain such jobs. The first stage of attempted enforcement of this wage finds itself in the fact that the Director of Immigration will not grant a visa to a FDH unless the contract of employment sets a wage that at least meets that minimum. This minimum wage has been a feature of the employment of FDHs since 1973 and is reviewed annually. The reduction by $400 in the minimum in 2003 is said to have been the result of a bona fide annual review.

6. The evidence is that, generally, Hong Kong has enjoyed an adequate supply of low-skilled workers but that where there is a demonstrated need for importation of such workers, such importation has been permitted. That has been effected through a number of labour importation schemes which pre-dated the Ordinance, in particular, a scheme in 1989 for the importation of about 3,000 technicians, craftsmen and supervisors, and two others in 1990 for 2000 and 710,000 workers respectively, schemes that were renewable annually, and over 52,000 workers were imported under these general schemes until their termination in 1996. There was a further scheme for importation of construction workers to facilitate the construction of the new airport and this was called the Special Labour Importation Scheme (SLS). The idea behind these schemes was, on the one hand, to permit the importation of lower skilled workers when needed and, on the other, to train local workers who became vulnerable to shifts in the economic structure of the Region; and it was thought a good idea that employers who were permitted to turn to lower skilled imported labour should contribute to the cost of training or retraining local employees in need of such training. So, under these schemes, a levy was imposed for the purpose of funding that training. To this policy, legislative effect was given in 1992 by the enactment of the Ordinance.

The Task Force Report

7. In 2002, the Chief Secretary established a Task Force on Population Policy whose function it was to identify “the major challenges to Hong Kong arising from its demographic trends and characteristics, setting the objective of a population policy and recommending a set of coherent policy initiatives which the administration can explore in the short and medium term.” The membership of that task force, chaired by the Chief Secretary, included all the major policy Secretaries, for example the Financial Secretary and the Secretary for Education and Manpower, and also the Director of Immigration.

8. Its report was published on 26 February 2003. It noted the changing face of the Hong Kong workforce caused by numerous factors such as the fact that Hong Kong’s population was ageing, that substantial numbers were arriving from the Mainland, many of whom required training, and that the economy was increasingly a knowledge-based one. The Report said, at paragraph 29, that: “The key objective of Hong Kong’s population policy is to secure and nurture a population which sustains our development as a knowledge-based economy.” To this end, the Task Force made a number of policy recommendations, including policies directed at the influx of those from the Mainland; the training needs of new arrivals; the extension of an immigration policy to cater for those who would make substantial investments in Hong Kong; and the encouragement of family planning.

9. At paragraph 5.50 of its report, the Task Force stated that it had included the question of foreign domestic helpers in its study “due to the substantial size of [that] transient population and its continuing growth. Having reviewed the existing policy, the Task Force considers that a number of improvements should be made to enhance the integrity of the mechanism for admitting FDHs, with a view to minimising abuse and displacement of local jobs by FDHs.” The report went on:

“5.51 We recommend that a monthly levy of the same amount (now at $400) as that imposed under the supplementary labour scheme should be introduced. This will remove the disparity of treatment between these two groups of employers. The income generated will be used for training/retraining purposes. The levy will be paid by employers and will apply to new contracts or renewal of contracts. At the current level, i.e. $400 per month, the proposed levy will generate annual income of $1.14 billion. The levy will be imposed under the Employees Retraining Ordinance. The Ordinance also stipulates that if the imported...

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