Setting maximum work hours first

Workers' unions have been pressing for a statutory, standard work week in terms of hours of work for quite some time. A proposal to regulate working hours however was defeated in the Legislative Council (LegCo) last month. Still, the debate is alive and well and the SAR government is expected to forward the report of a study on standard work hours to the Labour Advisory Board soon. The government then will report back to the LegCo's Panel on Manpower in December.

There is indeed a need to regulate work hours. The imperative is very clear: since workers are human beings, there is a limit to how much people can work without losing balance of one sort or another.

First, excessive work is health-threatening, even life-threatening. Second, excessive work hours may actually be counter-productive, even though this may not be apparent at first. Workers lose concentration and can be expected to make mistakes more often. This not only undermines the quality of work, but may lead to industrial accidents. Third, excessive work hours necessarily translate to fewer hours spent with families, leading to a loss of work-life balance.

While there is a need to limit working hours, that however is quite a different matter than setting a statutory standard work week. Although many jurisdictions have a standard work week of 40 to 45 hours, imposing similar standards across the board suddenly could lead to serious problems. In particular, there is a likelihood that many small and medium enterprises may not be able to survive. This is unfortunate, but is a fact of life.

Pressed by extremely high rents, many entrepreneurs, especially those in the restaurant and fast food business, have been struggling to survive by keeping their staff working longer hours. Without a chance to renegotiate rents with their landlords, cutting work hours on existing workers or having to hire extra workers to service the extra hours could be devastating. If a large enough number of small and medium enterprises failed, unemployment could jump, and workers could suffer rather than benefit from the legislation.

Thus, it makes sense first to set maximum working hours. In any case, there is a great diversity in the nature of work and the availability of workforce from industry to industry. In some industries, labor shortages may be quite severe. Setting standard working hours could exacerbate the shortage. On the other hand, if our aim is to protect workers from overwork, setting legal maximum working hours would suffice. More importantly, if setting legal maximum working hours is feasible while setting standard legal normal working is not, trying to press for a non-feasible option would not do workers any good.

An early International Labour Organization (ILO) report (Working Time Around the World) cited another ILO report by Spurgeon, 2003 to suggest that working hours longer than 48-50 hours per week are likely to expose workers to potential health risks.

The same report also indicated that "long working hours are common in the Asian region, especially among the so-called East Asian Dragons (e.g. the Republic of Korea) and Southeast Asian Tigers (e.g. Indonesia and Thailand)." It would seem that to avoid losing competitiveness and to minimize the chance of serious unintended consequences, setting a maximum work-week of 50 hours in the first instance would be prudent. Given the global economic uncertainty, it will be wise to remain somewhat conservative. We have just seen the minimum wage law established in 2011. To follow that with a very binding statutory standard of 40 to 45 work hours per week seems quite risky.

The real worry, as far as I can see, is not so much that workers may have to work 50 hours per week but that quite a number of workers routinely work in excess of 50 hours per week, or even in excess of 60. Extended working hours such as these not only are inhumane, but also may affect the workers' family members from spouses to children. Even worse, long work hours could lead to serious industrial accidents, and in the case of bus drivers and medical doctors could jeopardize the lives of passengers, medical patients and members of the public at large. The risks are just too big to ignore.

Employers' fears and objections are of course understandable, but they tend to be overstated. Since a statutory requirement for normal working hours or a statutory ceiling on working hours applies to one's competitors as well, there will not be a loss in competitiveness at all, unless we are talking about an export-oriented industry, in which case the businesses will have to compete with competitors in other countries. Rent cuts are unlikely in the short run, so employers will indeed experience some pain. Over the longer term, however, if the work hour regulation should erode profits, rents would decline, preserving the normal profits that would prevail for the highly competitive retail and restaurant businesses.

The author is director of the Centre for Public Policy Studies, Lingnan University.