Consolidated Case of the Strike in HIT

The Strike of the Dockers in Hong Kong International Terminals

Hong Kong Confederation of Trade Unions

ITUC/GUF Hong Kong Liaison Office

18 April 2013

Background of Hong Kong International Terminals

Hong Kong International Terminals (HIT) is owned by Hutchison Port Holdings Trust (HPH Trust), the subsidiary of Hutchison Whampoa established to consolidate the terminal businesses for public listing in Singapore. HPH Trust owns Hong Kong International Terminals (HIT), Asia Container Terminals (ACT), COSCO-HIT and Yantian International Container Terminals (Shenzhen, China). At Kwai Tsing Container Terminal, HIT owns Terminals 4, 6, 7 and 9, ACT and COSCO-HIT own Terminals 8. HIT and COSCO-HIT shared more than half (45.86% and 7.28%) of the THEU of the Kwai Tsing terminal in 2012. Collectively, HIT and COSCO-HIT serve around 216 weekly shipping lines services (by trade routes).

By 2010 when HPH Trust was listed in Singapore, the total throughput of its ports in the Hong Kong, and China port markets increased by 11.9% and 19.8%, respectively compared to 2009 (HPH Trust Prospectus 2010). Its global container throughput also increased by 13.4% over 2009. The company recovered from the economic downturn in 2008 and reported increased revenue at HK$9,735 million, profit at HK$3,018 million, and net profit margin of 31% in 2011. (HPH Trust Annual Report 2011).

25 million standard containers were handled at Kwai Tsing Container Terminals in 2012.

Out-sourcing and false contracting in HIT

Before 1996, most of the jobs in the docks owned by HIT were direct employment. The company switched to aggressive out-sourcing after the lashers and checkers took a strike in 1996 to demand higher wages. HIT used its subsidiary company, Sakoma and later Hutchison Whampoa Logistics, to out-source most of the manual work, turning the truck drivers, crane operators, lashers and checkers into contractual workers under four to five contracting companies. The purpose was to prevent the striking workers from forming new, independent trade unions and to weaken their bargaining position. The out-sourcing also tremendously decreased the production costs of HIT.

HIT was then able to use false contracting to drive down the contracting prices and workers’ wages. According to the prospectus of HPH Trust (2010), the company relies on a pool of approximately 100 sub-contractors to provide between 2000-3000 daily workers to work in its terminals. In fact the four major contractors currently used by HIT are closely related to the management. Two contractors are found to be actually owned by the former and the current HIT managers. Gerry Yim, the Managing Director of HIT is found to be the Director of Sakoma, which owns the stakes in the contracting company Everbest (the major employer of the lashers and checkers that are on strike now).

“There was a significant decrease in the average cost per TEU for HIT from HK$374.2 for the year ended 31 December 2008 to HK$275.7 for the year ended 31 December 2010.” (Prospectus 2010)

Pay and Working Conditions

The working and pay conditions of the workers employed by the contractors were worse since 1996. The manpower of the out-sourced jobs was cut and carried by fewer workers yet the workload increased. For example the checkers were cut to work in six rather than eight, whereas the on-shore checkers has been cut from six to four, and three to two for the on-board checkers. The crane operators were working in three to operate two crane machines for 8-10 hours a shift before. Now only one worker is working on a 12-hour shift to operate a crane machine.

The contracting workers are not able to negotiate their wages, work load and working conditions with HIT and the contractors. The take-home wages of the checkers and lashers in 2013 are around USD142 per 24 hours (3 shifts); whereas the crane operators are paid USD90 per shift of 12 hours in 2013, lower than the pay in 1997 (Table One).

Table One: Salary of the contractual dock workers

*24 hours a shift

**12 hours a shift

Based on the interviews with the strikers, the salary of workers per shift are in the below (in HKD). Exchange rate: 1 HKD = 7.8USD

Rest

The contractual workers are working long hours and do not have rest which should entail at least one day after every seven working days, and twelve statutory holidays under the Employment Ordinance, not to be substituted by monetary compensation. Yet the contracting dock workers are generally given two rest days per month and they are not entitled to take the statutory holidays.

The lashers and checkers are often asked to work two consecutive shifts of 16 hours, or even three shifts of 24 hours in one go, whereas the crane operators work in 12-hour shift and sometimes two shifts consecutively. UHKD has documented even longer working hours of up to 72 hours consecutively with its members during the peak season or typhoons. There is no toilet, recess or lunch break for the contractual workers. The workers take lunch irregularly whenever there is less work to do and they do not have a proper canteen in the terminals to take meals. The crane operators are put to work in the cabin of 8-feet high above the ground. They eat and urinate in the cabin, and come down to the ground only when a shift ends.

OSH

Work injury and occupational disease cases are under-reported or even un-reported by HIT and the contractors. The Labour Department of Hong Kong has failed to identify and investigate the injuries allowing the occupational safety and health violations in the terminals to persist, and the non-compliant contractors and HIT free of their legal liabilities.

From 2007 to 2013, the four contractors of HIT, Everbest, Comcheung Human Resources Ltd, Lem Wing Transp Ltd and Pui Kee Stevedore have been involved in at least 28 work injury compensation claims cases registered by the Labour Department. Fifteen of the cases were associated with Everbest including one death case. The injuries include serious ones such as workers falling from height leading to paralysis, broken backs and limps, to injuries by falling objects and cuts by rusted steel rods etc.

According to UHKD’s interviews with its members, they are verbally warned or intimidated by the contractors with dismissals or less job assignment if they report the accidents to Labour Department. The injured workers are given at most 80% of their salary by the contractors during the injury leave and without any reimbursement of the medical expenses as entitled under the law.

Workers are asked to remain on duty under typhoons and bad weather conditions without any protective equipment or compensation. In general, the dock workers are made to work under highly dangerous and hazardous conditions exposing them to industrial accidents such as falling from heights, injuries by falling objects; and chronic occupational diseases namely repetitive strain injuries, hearing impairment, respiratory diseases and lung cancers.

Occupational hazards of the contracting dock workers (Interviews by UHKD and ARIAV, 10 April 2013)

Trade unions in the docks and discrimination

UHKD, affiliated to HKCTU, was formed in 2006 and has 600 members most of whom are the contractual lashers, checkers and crane operators employed in the terminals. UHKD has not been recognized by HIT and the contractors. The employers have have persistently neglected the union’s requests for regular meetings and negotiations.

The two contractors, Everbest and Comcheung did not respond to UHKD’s request for negotiation of wage increase for the checkers in 2011. The four terminal companies, HIT, Modern Terminals, Asia Container Terminals and DP World did not react to UHKD despite the union’s submission of a request for wage negotiation with hundreds of signatures from its members in July 2012.

In January 2013, a contractual worker was dismissed after he spoke up in the joint meeting co-organised by UHKD and the regular workers’ union to synchronise the wage demands. The dismissal provoked the contractual workers leading to the decision to stage a strike on 28 March.

Breaking up the strike

On March 28, the contractual lashers and checkers went on strike and they were joined by the crane operators on the second day. The regular workers under HIT Union also announced work-to-rule on 4 April. The 450 striking workers of UHKD and the regular workers have been subjected to threats and intimidations from HIT since then:

Court injunction to ban the strike – On 30 March, HIT filed to the High Court for an injunction to ban the Secretary General of HKCTU, Lee Cheuk Yan, the Secretary General of UHKD, Stanley Ho, 13 members of UHKD and the strike supporters from approaching and striking at the terminals. An interim injunction was granted on 1 April, and later reverted by the appeal court on 5 April to allow 80 members of UHKD to picket at the car park of the HIT terminals.

Threats of dismissals – HIT and the four contractors made open threats on 1 April to dismiss and blacklist the strikers if they did not resume work by noon the next day. The contractors put pressure on the regular workers to work overtime and sought temporary workers to replace the strikers.

Hiring strike breakers –HIT reacted to the reverted injunction of 5 April by sending a memo to all the regular and contractual workers promising to award HKD3000 if they returned to work on 6 April, and another HKD2000 when the operation of the terminal was back to normal. No strikers left the picket line. On 16 April, the media reported that HIT was hiring construction workers to replace the striking dock workers by giving them fast track training and the occupational certificates.

Bad faith bargaining

Demands of UHKD

Recognition of the trade union and collective bargaining rights
A collective bargaining agreement to include the results of the mediation applicable to the new contractors that HIT will use.
Wage increase of 24% ie an increase of HKD100 per shift of 12 hours for the lashers, crane operators and the checkers1.
Improvement in the working conditions – recess, toilet and meal breaks; improved safety and health protection in the terminals.

The Hong Kong Government

The Hong Kong government has failed its obligation as a ratified party to the ILO Convention No 87 and 98 to promote collective bargaining thereby prolonging the dispute and the strike. The Labour Department intervened on the seventh day of the strike, 4 April, by inviting the striking workers to send representatives to negotiate with two contractors, Everbest and Global, without giving the trade union recognition to UHKD. The meeting was cancelled.

From the first meeting on 10 April onwards, the Labour Department further pulled in two other trade unions, affiliated to the Hong Kong Federation of Trade Unions (whose members are mainly the truck drivers) and the Federation of Labour Unions (whose members are the regular workers under the HIT Workers’ Union) in the negotiation in separate sessions. The Labour Department did so regardless of the objection of the striking workers over the two unions’ representation of their interests in the dispute, and the move was a divide and rule tactic making use of the absence of a collective bargaining law in Hong Kong.

HIT and the Contractors

HIT and the contractors have not shown good faith in negotiating a resolution with the strikers. HIT had stayed away from the mediation insisting that it did not have obligations. The two contractors, Global and Everbest left have not shown good faith in the negotiation meetings that followed. They adjourned the first day meeting of the second round negotiation on 10 April, and Global even left the table during the recess in the second day meeting on 11 April without informing the other parties. Before the third round meeting on 16 April gave any significant results on the basic wage increase and the meal break, Global and Everbest adjourned the meeting without committing to resume the talk. Despite the 24-hour ultimatum sent by UHKD for continuation of the negotiation, Global did not come back to the table on 17 April which left the UHKD with no choice but stepping up its action for an un-limited sit-in at Hutchison’s head office on the same day. Up till now, HIT and Hutchison have not made any real move to negotiate a resolution.

According to the last negotiation on 16 April, Global and Everbest only agreed to:

(1) 5-7% increase in the basic wage per 12-hour shift, same as before, and increasing the meal allowance to HKD60.

(2) Annual paid leave.

There is no concession regarding the union’s demand for 24% increase in the basic wage and meal breaks for the crane operators.

Support from the community

Use of facebook and the internet for mobilization
A facebook was opened by the dockers last year to disclose the conditions of the dock workers which were not known to the public at all. B now the dock workers’ facebook has nearly 20,000 fans following on a daily basis, relayed by other bloggers and facebook users to publicise the issues. Solidarity actions targeting Hutchison are mobilized by other movement organizations on the internet, a brand new phenomenon in the labour history in HK.

Solidarity fund
By now the fund has raised HKD5.3 million from public donations. UHKD and HKCTU are able to deliver a total of HKD7500 by now per striking worker.

Solidarity from other trade unions and the civil society organisations
Other trade unions, the students organisations, the community ngos, the labour ngos, and the church organizations etc are coming in on daily basis to give food, water and other supplies to the strikers. A support group was formed to initiate solidarity actions including protests in the supermarkets owned by Hutchison in HK, community fund raising and signature campaigns and a 12-hour march around the territory on 14 April.

1 The HIT Union affiliated to the FLU demanded 12% wage increase and OT compensation of 1.5 times of the hourly wage. The demands of UHKD are made based on the 12 hour shift of the contractual workers who are paid not by a standard 8 hours as the regular workers are. The absence of a legislation on standard working hours also makes OT compensation un-enforceable for the contractual workers.