Jurisdiction - Hong Kong
News
Hong Kong – Shortage Of Labour: Update.

25 June, 2014

 

Government removed the bar to claim an extension of time for shortage of labour in Technical Circular (Works) No. 5/2013. Whilst a step in the right direction, this stops short of specifying that labour shortage will entitle the Contractor to an extension of time, as it still needs to be shown that labour shortage falls within one of the stated heads entitling the contractor to an extension of time; the most relevant being a special circumstance. Further, as this only applied to tenders for works contracts invited on or after 15 August 2013, it does little to assist Contractors on works contracts entered into prior to this date.


The industry has expressed frustration at a perceived denial of the scale of labour shortage on Government’s part. Government’s reported figures in 2013 identified a 1.25% vacancy rate, whereas the Hong Kong Construction Association identified a 15% vacancy rate. The apparent slow processing of applications under the Supplementary Labour Scheme (“SLS”) has seemed to do little to ease the situation. However, Government now appears to be accepting that there is a labour shortage, particularly of skilled workers. In recent months, the Secretary for Labour has confirmed that steps will be taken to relax the vetting procedures of the SLS in an attempt to shorten the processing time, which is encouraging.


It remains to be seen whether this new approach by Government will lead to any easing of the labour shortage in the industry. 


Certainly there would need to be a significant change in approach taken by the Labour Department in assessing applications under the SLS, and processing the same in a prompt and timely manner. Nonetheless, this is encouraging, and certainly what is clear is that unless the Government addresses this issue, there will likely be significant delays to the construction projects in Hong Kong, and substantial claims from public works contractors in due course.

 

Pinsent Masons

 

For further information, please contact:

 

Zoe De Courcy Arbiser, Pinsent Masons
[email protected]


Mohammed Talib, Pinsent Masons
[email protected]

 

Pinsent Masons Construction & Real Estate Practice Profile in Hong Kong

 
 

Comments are closed.