July 28, 2002- Construction Site General Workers Union protests against unpaid wages

A protest march organised by HKCTU's Construction Site General Workers' Union on July 28 brought public attention to the widespread problem of unpaid wages in the industry. In the preceding weeks several disputes flared up between unpaid workers and contractors, with two employers absconding without paying several months in back wages.

In the first six months of this year the Construction Site General Workers' Union dealt with 280 cases of subcontractors failing to pay wages. Twenty-eight per cent of these cases involved 30 or more workers. At the time of the protest rally the union was demanding the payment of an estimated HK$40 million (US$5.13 million) in wages owed to 3,000 construction workers.

The union cited the failure of private contractors on public construction projects to pay workers, arguing that stricter regulations to protect workers' rights are needed. Low bids to win contracts in public construction projects means that subcontractors cut costs and invariably attempt to resolve cash flow problems by withholding workers' wages. It is also common for subcontractors to seek liquidation as a means of escaping responsibility for paying wages in arrears.

To deal with the problem the union is calling for stricter government regulations on wage payments, including the stipulation that the main contractor be directly responsible for paying workers' wages. The union also demands that the number of tiers in the subcontracting chain be limited so that direct responsibility for employment conditions and wages be more easily ascertained.

In addition to unpaid wages the union is concerned about rising unemployment and declining wages in the industry. Over the past year unemployment in Hong Kong has hit record levels, and is now 7.8%, with 275,000 people out of work. According to data from the Census & Statistics Department, dismissals in the construction industry are a major contributing factor to rising unemployment levels. Unemployment in the construction industry now stands at 16.7%.

As part of its campaign against rising unemployment, the union is demanding increased public housing projects as a means of creating jobs in the industry. Last year the union held a press conference under the banner, "Build more public housing, create more jobs”, in which it argued that more and more construction workers had insufficient work and declining pay. The primary reason for this was the decline in public construction projects. A three-month survey conducted by the union reflected this trend.

Survey results showed that the number of construction workers with no work or less than 10 days' work per month increased steadily, while those working more than 20 days declined. This was largely due to dismissals by large and medium-sized construction companies as public works projects were completed.

The data also revealed that those earning less that HK$400 (US$51) per day rose, while those earning between HK$400 to HK$700 (US$90) per day declined. The union argues that this is a longer-term trend, with wages of construction workers declining 25% over the past three years.

According to the Census & Statistics Department, there are 76,000 manual workers employed in the construction industry out of a total of 250,000 in the building, civil engineering, construction and real estate sectors. According to figures released in March 2002, there were 76,900 workers employed on 947 construction sites.

The construction industry in Hong Kong is heavily dependent on public works projects, accounting for half the value of all construction work completed in the territory. In 2001, the gross value of construction work at private sites was HK$40.3 billion (US$5.2 billion) and the value of construction work performed at public sector sites was HK$41.8 billion (US$5.36 billion). However, the scaling down of the Public Housing Programme led to a 17.7% drop in the total value of construction work on public projects compared to 2000.

This trend has continued. In the first three months of 2002, private sector construction work was valued at HK$9.8 billion (US$1.26 billion), an increase of 10.5% over the previous year. However, public sector construction work, totaling HK$9 billion (US$1.15 billion) in the first quarter of 2002, has fallen by 22.4%. With this decline in public works projects, especially public housing, private sector construction of residential buildings now accounts for the largest share of construction work.

In response to this trend the union argues that an increase in public works projects is required, particularly in the construction of public housing. In recent years property tycoons like Li Ka-shing have pressured the government into privatizing public housing and stopping the construction of new public housing. In this way people will be forced to buy housing in private development sites, reducing the private residential housing surplus and benefiting the big land developers.

The union is also calling on the government to ensure that tenders for public projects stipulate that local building materials made in Hong Kong are used rather than prefabricated or ready-made materials brought in from the mainland.

Another key characteristic of the construction industry in Hong Kong is the extensive subcontracting network, using small- and medium-scale companies to undertake onsite construction work. For example, in 2000 it was estimated that 90% of all construction companies in Hong Kong had less than HK$10 million (US$1.28 million) gross value of construction work in that year.

Workers face extensive problems under the subcontracting system. In addition to the problem of unpaid wages by subcontractors, there are also cases where workers are employed as 'self-employed.' As a result, they are not protected by labour laws, while employers also escape responsibility for providing work-related insurance and contributions to the Mandatory Provident Fund (MPF).

The Construction Site General Workers' Union has 2,500 dues paying members and was established in 1993 through the merger of three smaller, specialized construction unions. The purpose of the merger was to strengthen solidarity among construction workers in different skilled trades and to broaden its membership base as a general union.

Strengthening solidarity also means taking into account the rights of migrant workers. Migrant and immigrant workers have joined the union, including foreign construction workers who are Hong Kong residents. The union also cooperates with a number of migrant workers' organisations in Hong Kong.

As part of its activities the union assists workers in lodging complaints with the Labour Department and in negotiations with the main contractor. The union strategy is to target major contractors and parent companies through protest actions and press conferences, where these larger companies are more likely to be concerned about their public image and legal liability. This then exerts pressure on the subcontractors who directly employ construction site workers.

Another key area of union activity concerns occupational safety and health. The construction industry is one of the most hazardous occupations in Hong Kong, and has the highest number of work-related deaths. As Chan Che-leung, Chairperson of the Construction Site General Workers Union, points out: "Workers' lives and bodies are treated as part of the cost in the construction industry.” See High rate of industrial accidents in the construction industry

In its struggle for the right of workers to a safe working environment, the Construction Site General Workers' Union undertakes extensive OSH training, including specialized OSH training for each of the skilled trades.

The union distributes information on OSH and labour laws to workers on construction sites

The union is registered to provide safety training for workers seeking accreditation as a holder of a construction industry safety 'Green Card.' Under the Factories & Industrial Undertakings (Amendment) Ordinance 1999, possession of a safety Green Card is compulsory when working on construction sites. In 2000 the union launched its certified safety training course and OSH manual that is recognized by the Labour Department. The union not only uses this training to attract workers who want to obtain the compulsory Green Card, but also raises awareness of worker and trade union rights. Since it was initiated an estimated 6,000 workers have participated in this training at the two OSH training centers operated by the union.

Construction workers attend an OSH training session organised by the union