In 2002 the Government will intensify public sector job cuts, replacing them with contract workers and contracting-out to private companies. More than 60% of positions will be contracted-out, as more and more civil servants are pressured into the Voluntary Retirement (VR) scheme. The Food & Environmental Hygiene Department (FEHD) is at the forefront of these changes. It has already tendered 153 contracts to private companies at a cost of HK$1.18 billion (US$151 million) per year. In the last six months the FEHD invited more than 30 private tenders for services ranging from street cleaning, waste collection, mechanical street sweeping and public cemetery cleaning and maintenance services. Most of these contracts, covering 21 districts, are for periods of two to three years, commencing in 2002. More than 2,000 public sector jobs will be lost.

HKCTU's Government Modal One Staff General Union, whose members include civil servants with 'Workman II' status employed by the FEHD, criticised the Government for forcing civil servants to join the VR scheme. They are being replaced by workers employed by the FEHD on monthly contracts without civil servant benefits and allowances. These workers earn HK$8,000 per month compared to HK$10,200 earned by workers with civil servant status (plus benefits, pensions and allowances). More importantly, contract workers have no job security.

HKCTU's Government Employees Solidarity Union, formally established on November 16, was created in response to the problems faced by contract workers. The majority of the members of this new union are contract workers employed by the FEHD. Originally hired on a monthly basis, a series of union protest campaigns forced the FEHD to issue six-month contracts. The contract workers also won the right to paid public holidays (17 days) instead of only statutory holidays (12 days) and the right to paid sick leave (previously restricted to sick days of more than three days). These gains were considered a partial victory by the union, but many challenges still lie ahead. Despite the fact they already face job insecurity because of their short-term contracts, they are now facing even greater insecurity as the FEHD plans to contract-out even these positions to private companies. Already this year the FEHD did not renew the contacts of 50 workers whose short-term contracts ended, and instead contracted-out these jobs to private companies.

About 1,800 jobs in waste collection and street cleaning services have been contracted out to private companies. Public sanitation services such as public toilet cleaning have already been contracted out. The wages of workers employed under contracting-out are extremely low, ranging from HK$4,000 (US$513) to H$5,000 (US$641) per month. In order to earn an income sufficient for a basic standard of living (HK$10,000/month), they must work up to 17 hours a day.

The Government Modal One Staff General Union has brought media attention to several cases exposing the exploitative conditions and corruption in the private companies contracted by the FEHD. This includes revealing the difference between government budgetary allocations for labour costs in tendered contracts and actual wages. On average HK$8,000 is allocated for labour costs, but workers hired by private companies receive only HK$4,000 to HK$5,000. One company, Yu's Tin Sing Enterprise Co Ltd was shown to have cheated the government out of HK$3 million (US$385,000).

In another case, an elderly couple aged 73 and 66 employed by a private contractor for street cleaning were paid only HK$5,200 (US$667) per month and were forced to pay HK$170 back to the company for any holidays they took. They had only two days off work in two years. Other cases include public toilet cleaners who had no holidays for two years and were paid wage rates equivalent to HK$7 (US$0.90) an hour.

Despite media reports prompted by union campaigns, the FEHD rejects decent wages for workers hired by private contractors. Instead, the FEHD maintains the position taken by the Government in its submission to the Legislative Council Panel on Public Service on November 20, 2000:

"We do not consider it appropriate to stipulate a minimum wage requirement in the tender document. The wages of workers engaged in projects and services contracted out by Government is a matter for the successful contractor to work out with his employees."

Since the workers hired are mainly migrant workers, newly arrived mainland immigrants, and the elderly, they are more vulnerable to abusive labour practices. The result is unrestrained exploitation under the dirty business practices of cleaning companies.

Next> Union Action March 2002: "Contract workers protest"