INVITATION TO MEDIA

“Public Rally and March Calling for Wage

Protection and the use of levy for FDWs protection fund!”

The Coalition for Migrants Rights (CMR) invites members of the Hong Kong media, NGOs community and the general public to attend a public rally and march marking its celebration of the 100^th International Women’s Day. The focus of this rally is to launch a new campaign calling for wage protection for foreign domestic workers as a basic human right of women workers.

This new campaign is distinct from CMR’s previous campaign in that it calls for the use of the employers’ levy as a “Protection Fund for FDWs” to compensate FDW for underpayment and contract violation. Since the levy is paid for by the employers of Foreign Domestic Workers (FDWs), CMR asserts that it should be rightfully used for the FDWs’s protection.

The Coalition of Migrant Rights is a network of six different associations and unions of FDWs: Indonesian Migrant Workers Union (IMWU), Asian Domestic Workers Union (ADWU), Filipino Domestic Helpers General Union (FDHGU), Thai Women Association, Far East Overseas Nepalese Association HK (FEONA), Association of Sri Lankans in HK (ASL), Indian Domestic Workers Association (IDWA).

We hope you will join us to witness the launching of this new campaign on:

Date: Sunday, 13 March 2005

2 - 4 pm – Public rally at Charter road, Central

4-5 pm – March from Charter road to Central Government Office, Central

Please feel free to contact the following persons for further details:

1. Ms. Sajida Ally (9525 7606), 2. Ms. Gigi Torres (9027 7556), 3. Ms. Nurul Qoiriah (6153 3105) 

We, the undersigned, support the following calls of the Coalition for Migrants’ Rights:

1. Stamp out underpayment of FDWs, and overcharging by recruitment agencies.

2. Use the employers’ levy as a ‘Protection Fund for FDWs’ to compensate FDWs for underpayment and contract violations.

3. Implement a 6% wage hike in 2005, and a 12% hike in 2006.

4. Include the FDWs in the coverage of social security protection schemes, such as Mandatory Provident Fund (MPF).

5. Consult registered FDW trade unions when amending/changing terms and conditions in the standard FDW employment contract.

COALITION FOR MIGRANTS’ RIGHTS (CMR)

Fax: (852) 2992-0111 Email: cmr@asian-migrants.org

WAGE PROTECTION FOR FOREIGN DOMESTIC WORKERS IN HK!

Joint Position Paper (February 2005, Hong Kong)

Each year, the Hong Kong government reviews the minimum allowable wage (MAW) for foreign domestic workers (FDWs). The MAW was first implemented in 1987, at HK$2,900 per month; since then and until 1998, it consistently rose due to the strong HK economy and the effective advocacy of migrant and local workers’ groups. The MAW is again up for review in February 2005.

The MAW was implemented as one of the ways of protecting the wage and condition of FDWs, who are among the lowest paid workers in Hong Kong. FDWs, the majority of who are from the Philippines, Indonesia and Thailand, are mostly women. Despite their significant economic contribution to Hong Kong – over HK$13.7 billion annually, which is almost 1% of HK’s GNP in 2004[1][1] – FDWs remain highly vulnerable to abuses, contract violations, discrimination, restrictions on their rights, and erosion of their wages/benefits. These vulnerabilities are due to structural, policy, gender, racial and class-related factors.

Following the 1997 financial crisis that plunged HK and several Asian countries into economic recession or record-high unemployment, the HK government first attempted to cut the MAW in 1998 “because FDWs need to share the burden of the economic difficulties.” This was met by strong protests spearheaded by CMR, local labor and women’s groups, churches and advocates. In 1999, the government succeeded in imposing the first-ever cut (5%) on the MAW, bringing it down to HK$3,670/month. The employers originally lobbied for a 35% wage cut.

The MAW was frozen in 2000 and 2001. In 2002, a new wage cut was attempted, but did not succeed, due to the intense protests by migrant groups and advocates, as well as the formal opposition by the governments of the Philippines, Indonesia and Thailand.

In 2002-2003, as part of the HK government’s income-generating strategy to pay its massive budget deficit, the government wanted to impose a tax (levy) on employers for hiring FDWs (HK$9,600 per contract). In order to reduce employers’ opposition to this levy, the HK government linked the levy with an 11% (HK$400) cut on the MAW.. This second wage cut – a sell-out of FDWs to appease the employers – was imposed in 2003, bringing wages down to the current HK$3,270. CMR and its migrant union-members, as well as trade unions in the Philippines and Hong Kong, filed protests in November 2002 at the ILO against the wage cut, the taking of the levy from the FDW wage, and non-consultation with the migrant unions. These complaints are still pending at the ILO. In a separate move, a group of migrants and advocates filed a case in HK against the levy and wage cut, but the High Court decided in December 2004 that the wage cut and the levy are legal.

In 2005, CMR and partners are reviving the campaign on “FDW Wage Protection”. This wants to focus the campaign back on the real issues faced by FDWs, and promote FDW (not employers’) interests. Many of CMR’s members and partners, have spearheaded the wage hike and FDW rights campaigns since the 1980s, and have been instrumental in the 1998 and 2000 victories in reducing or stopping wage cuts and other controversial moves that undermine FDW wages and rights (e.g. removal or maternity protection). CMR wants to push this campaign forward.

In view of the above, CMR calls on the HK government to:

1.      Stamp out underpayment of FDWs and overcharging by recruitment agencies

Underpayment is one of the most widespread forms of abuse against FDWs in Hong Kong. The baseline study published by CMR and AMC in 2001 revealed that 15% (more than 34,700) of all FDWs are underpaid. The extent and degree of the violation differ by nationality. For example, almost half of all Indonesian FDWs (more than 43,900) are underpaid, receiving only an average of HK$1,500-2,000 per month. In many cases, especially among Indonesians, the severe underpayment is linked to the excessive fees charged by recruitment agencies. HK laws allow only 10% fees (HK$327) to be charged by recruiters; however, many agencies charge upwards of HK$9,000, explaining why many FDWs are underpaid or totally not paid for several months.

For these FDWs, any wage hike is meaningless, and only serves to intensify the underpayment that they suffer. Although the sustained campaign of the Indonesian Migrant Workers Union, KOTKIHO and CMR in more than 5 years have helped reduce the underpayment incidence (from around 90% in 1999, down to 48% by 2001) and the fees charged by recruiters (from an average of HK$21,000 in 1999 down to an average of HK$16,000 in 2001), the problem remains serious.

Therefore, one of the first and most immediate steps needed to raise the actual wages of FDWs is to stamp out underpayment of FDWs and overcharging by recruiters. With HK’s efficient Police Force, Immigration and Labour authorities, it is a wonder why these blatant illegal activities persist. These problems, are far less serious among Filipinos and Thais, indicating that the problem can be stamped out or reduced.

CMR calls on the HK government to:

• Use the employers’ levy to speedily compensate underpaid FDWs.
• Take strong action against guilty employers, and agencies charging illegal/high fees. Blacklist/disallow employers from hiring FDWs and severely punish guilty recruiters.
• Improve cooperation among HK, the sending governments, FDW unions/organisations and NGOs to crackdown on underpayment and excessive fees.
• Recognize FDW unions as legal representatives who can file complaints on behalf of their FDW union members.

2.      Use the employers’ levy as a ‘Protection Fund for FDWs’ to compensate FDWs for underpayment and contract violations

The Budget Secretary announced in March 2003 that unless the government urgently collects more money in order to pay the government’s record-high budget deficit (HK$70 billion in 2003), HK’s economic difficulties could worsen. In line with this, the government announced its plan to impose a levy on employers (for hiring FDWs). The government justified the move by calling the levy a “fund for retraining local domestic helpers.” When the levy was first imposed in 2003 (HK$9,600 for each 2-year FDW contract), the government also made a parallel move of cutting the FDW minimum wage (by the same amount over 2 years).

The government’s real intentions for the above moves are clear:

• To use the employers to generate at least HK$1 billion every year through the levy.
• To lessen the opposition of the employers to the levy – by announcing a parallel wage cut on FDWs, so that the employers don’t feel that they are giving out additional cash for the levy;
• To court the support of the local DWs for the levy – by designating it as a “fund for retraining local DWs”.

CMR and the local DWs jointly opposed the wage cut and the levy, asserting that the levy must not be taken from the FDWs. Furthermore, the “FDWs must not be made to pay for local DW’s retraining needs”. Such costs must be shouldered by the HK government, not the DWs.

Despite massive protests including a court case, and CMR’s complaint at the ILO, the government began collecting the levy in October 2003. This institutionalizes the employers’ levy, which now becomes a law. The employers’ levy and the MAW are now 2 independent laws that will be separately reviewed and decided by the LegCo if they want to change any of them. Indeed: (a) if the government increases the MAW in the future, this will not automatically reduce the employers’ levy; (b) if the employer’s levy is increased, this will not automatically reduce the MAW; (c) if the levy is abolished, the MAW will not automatically increase. The levy that had been collected by the government will not be paid back to FDWs, since it’s the employers paying the FDWs, not the government. And we hope that abolishing the levy will not result in the abolition of the MAW!

The key issue for FDWs now continues to be the protection and improvement in our wage – how to recover the 2 wage cuts, and how to stamp out factors that erode our wages (e.g. underpayment, high recruitment fees). Therefore, CMR’s primary campaign is wage protection and wage increase.

We should continue to oppose the employers’ levy, but we should not lose sight of WHY we had the anti-wage cut and levy campaigns in 2003. Our principled opposition in the past, as it should be now, was not on the employers’ levy itself – our protests were against the INTENDED USE of the levy, and the PROCESS by which it was implemented (government selling-off the FDWs to lessen employers’ resistance to the levy).

Clearly, the employers’ levy is an issue for the employers. The employers should defend their own interests, not the FDWs. We must remind ourselves that it was the strong employers’ lobby since 1998 that resulted in the cut in our wages, and the attempt in 2000 to remove maternity protection for DWs. FDWs campaigning for employers’ interests betray the FDWs.

Our present opposition to the levy must ensure that we advance and protect FDW wages and rights. Therefore, CMR’s campaign is to DECLARE & USE THE LEVY AS A PROTECTION FUND TO COMPENSATE AND PROTECT FDWs AGAINST EMPLOYERS’ ABUSES.

Campaigning to abolish the employers’ levy only serves the employers’, not FDWs’, interests. Why?

• If the employers’ levy is abolished, this will not automatically increase the MAW. Thus, the employers benefited, but the FDWs gained nothing.
• Abolishing the employers’ levy will throw away one powerful weapon that is now available to FDWs – a financial bond/guarantee, already paid by the employers and readily available – to make them pay/responsible if they commit any underpayment or violation of the FDW contract. Since all employers pay the levy upon hiring every FDW, each FDW has an effective guarantee fund that can potentially protect her.
• Such a ‘protection fund’ could be an effective deterrent for employers to commit the violation. Prevention of the violation is surely much more important than ready compensation.
• A readily available protection fund will benefit the FDWs (and also lessen government’s administrative costs) in settling FDWs’ claims. Instead of lengthy arbitration, which many employers want because dragging the case longer forces FDWs to accept smaller settlements (usually only half, or a small fraction of their legitimate claims). This is because FDWs are not allowed to work or earn while the case is pending. Thus, CMR is also advocating that the ‘protection fund’ from the employers’ levy will be used to provide for daily living allowances for FDWs who have pending cases.
• For the more than 40,000 FDWs who are presently underpaid (mostly Indonesians), abolishing the levy will remove a resource that they can now immediately use to finally end their suffering. For the underpaid FDWs, it is not a wage hike in 2005, but the use of the levy to compensate them, that will actually raise the wages that they receive.

The FDW campaign should be to designate the employers’ levy as a protection fund for FDWs, instead of abolishing the levy. CMR therefore calls on the HK government to:

· Officially designate the employers’ levy as a ‘Protection Fund for FDWs’, to be used in readily compensating FDWs for underpayment and settling financial claims arising from violations of the FDW employment contract or Employment Ordinance.

· Use the levy to automatically provide for daily living allowance (e.g. HK$50/day) for FDWs who have court cases dragging on for more than one month.

Using the levy for the above purposes will encourage FDWs to actively report underpayment and violations, and help lessen cases that drag too long. This could help finally stamp out such abuses in HK.

3.      Implement a 6% wage hike in 2005, and a 12% hike in 2006

This will simply recover the 2 wage cuts (1999 and 2003), and bring back FDW MAW to 1998 levels. The two wage cuts were imposed by the government on the argument that FDWs should be among the first to share the burden of the economic recessions since 1997.

Now that the crisis is over and the HK economy is recovering, it is but fair to reverse the first wage cut, and implement a 6% (HK$200) hike in 2005. The FDWs should be one of the first to share the benefits of a resurgent economy, since they were also among the first to suffer the cut in 1999.

The government has announced that the economy will continue to strengthen in 2006. Therefore, CMR calls on the government to implement a second wage hike (HK$400 or 12%) in 2006 to bring back the FDW wages to 1998 levels.

4.      Include the FDWs in the coverage of the Mandatory Provident Fund (MPF)

The Provident Fund provides social security for workers in their retirement age; it is mandatory for almost all workers in HK. The MPF in HK covers even part-time and sub-contract workers. But the MPF excludes FDWs.

This is a form of discrimination against FDWs, and also towards women, since the bulk of FDWs are women. MPF is essential for future/retirement/social security of FDWs, especially after their employment in HK. Women and FDWs returning back to their home countries are usually displaced from the labor force, and have no social or retirement benefits after leaving HK. Therefore, as a form of social and wage security for FDWs, CMR calls for their inclusion in the MPF.

MPF can also be a used to detect and stamp out underpayment/illegal employment, since employers are required to contribute monthly.

The MPF requires both FDW and employer to contribute 5% each. This becomes a retirement fund that FDWs can get when they leave HK. The contribution by employers effectively gives a 5% wage hike for FDWs. But above all, this is a social security and gender justice issue because women who spend their prime years working as FDWs need social security protection after they finish working in HK.

5.      Consult registered FDW trade unions when amending/changing terms and conditions in the standard FDW employment contract

In line with ILO conventions, migrant unions in HK, especially ADWU, IMWU and FDHGU, have been asserting their right to represent FDWs. CMR calls on the HK government to recognize the right of migrant trade unions to be properly consulted on changes in their employment contract. This will help empower FDWs and women in negotiating with the government, representing their own interests and protecting their wages, benefits and rights.

6.      Related demands

The following issues are also strategic and important factors that affect the security of wages, benefits and work of FDWs in Hong Kong. Therefore, CMR and partners reiterate the following long-standing calls on the Hong Kong government to:

• Implement a minimum wage for local domestic workers
• Abolish the “2-week rule”, NCS and other discriminatory policies against FDWs.

February 2005, Hong Kong

PROPONENTS:

1.      Coalition for Migrants Rights (CMR)

Members:

Asian Domestic Workers Union (ADWU)

Indonesian Migrant Workers Union (IMWU)

Filipino Domestic Helpers General Union (FDHGU)

Thai Women Association (TWA)

Far East Overseas Nepalese Association (FEONA)

Association of Sri Lankans in HK (ASL)

Indian Domestic Workers Association (IDWA)

2.      The Hong Kong Coalition of Indonesian Migrant Workers Organization (KOTKIHO)

3.      Asian Migrant Centre (AMC)

4.      Migrant Forum in Asia (MFA)

5.      Akbayan - Hong Kong

6.      Alliance of Progressive Labor – Hong Kong

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