Janitor Strike in Hong Kong Reveals Loopholes in Government Subcontract Policy

In Hong Kong, more than two dozen subcontracted janitors from a public housing estate went on strike on December 27, 2017.  After several rounds of negotiation, the employees and the employers finally broke the deadlock and brought the ten-day strike to an end, when a compensation package was put on table on January 5, 2018.  Although the dispute has come to an agreeable conclusion to both parties, the incident reveals many loopholes and bad practices within the Government outsourcing policy.

The workers were originally hired by a cleaning service company, Man Shun Hong Kong and Kowloon Cleaning Co. (alias: Man Shun), to carry out cleaning services at a public housing estate outsourced by the Housing Department.  When Man Shun’s contract completed on November 2017, a new company, Hong Kong Commercial Cleaning Services Limited (Alias: Hong Kong Commercial) won the tender of a new contract from the Government.  However, Man Shun threatened the workers that they would not be hired by Hong Kong Commercial unless they sign the voluntary resignation agreements and forfeit their severance compensations as stipulated by law.  On the other hand, when transferring to the new employer, the seniorities of the workers will be eradicated, meaning that all their previous benefits, such as annual leaves, will have to be started from scratch under the new contract.  Not long after signing the agreements, the workers discovered that both Man Shun and Hong Kong Commercial shared the same office and suspected that there were some clandestine associations between the two companies.  Realizing that their rights have been sold out by both companies, the workers started on the inevitable struggle to defend and demand their lawful rights in severance compensations.

Other than the evasion of severance payment and service seniority, what truly infuriated the workers of Hoi Lai was the lack of respect shown by their employers.  When Hong Kong Commercial initially took over the operation, a HKD11 (USD1.4) monthly salary pay rise was offered to the workers.  Amidst the strike, Man Shun counter proposed a severance package that is only equivalent to HKD100 (USD12.8) per year of service, which is almost 14 times less than the sum as stipulated by the law.  In fact, some of the workers worked for Man Shun for more than nine years under harsh circumstances.  As one of the workers, Ah Mun, recalled, she had once worked for 47 days consecutively under high intensity conditions outdoor.  Thus, by refusing the meagre offers from both companies, the workers are not only fighting for mere financial gains, but also the dignity and respect they deserved.  In order to support the striking workers in a prolonged struggle with the employers, the HKCTU launched the “Strike Fund” to compensate the workers for their financial loss during the strike and, eventually, forced the employers to the negotiation table.  For the first time, the workers were able to negotiation with the employer on fair ground and gained the recognition they rightfully deserved.  In solidarity, the workers successfully attained a considerable increase in severance payments and monthly pay rise from both Man Shun, and Hong Kong Commercial respectively.

The strike exposes the problem of bid-rigging in Government outsourced contracts.  In a race to the bottom where the lowest bidder wins, workers’ rights are often sacrificed as tenders attempt to slash labour costs as much as possible.  As in the case of Man Shun and Hong Kong Commercial illustrated, by forcing the workers to forfeit their severance payments and benefits rendered from their seniorities, both the outgoing and incoming subcontractors will have an edge over other competitors by offering lower labour costs.  It is not improbable to allege that the collusion between the two companies is an act of preemptive bid-rigging to win the Government’s tender.  Thus, without stipulating certain prerequisites in the outsourcing contracts to protect workers’ rights (such as the implementation of living wage, contract gratuities, and continuation of seniorities), it is inevitable that subcontractors will continue to find loopholes within the system to win the bidding war.

As a matter of fact, under the current policies in service procurement, the Government is not only outsourcing services, but also her responsibilities as an employer to the subcontractors.  For instance, a subcontracted worker may have served the same Government department for many years, but at the same time being employed by multiple contractors due to the change of hands in outsourced contracts.  In fact, when compared to individual subcontractors, the Government has an even bigger responsibility to ensure the well-being of the workers.  Because after all, the Government is the ultimate user of the service provided by the subcontracted workers.  Furthermore, in the long run, the Government should develop and implement the concept of “co-employer” in her outsourcing policy, so as to assume her due responsibilities as an employer of all subcontracted workers.