The wage cut for foreign domestic helpers and the levy on their employers are lawful, the High Court ruled on Tuesday.
However, a group of disgruntled helpers four Filipinas and an Indonesian who took the government to court in September last year over the pay cut vowed to appeal Justice Michael Hartmann's ruling.
With Hong Kong in the grip of a protracted economic downturn and the government facing ballooning budget deficits two years ago, the government announced that from April 2003, the minimum allowable wage for foreign domestic helpers would be reduced by HK$400 a month to HK$3,270, and that from October the same year, their employers would be required to pay a levy to the government equivalent to HK$400 per month.
The levy, which was estimated to raise as much as HK$2 billion a year, was introduced to raise funds for training local workers and imposed under the Employees Retraining Ordinance.
The twin decisions in 2003 have affected more than 237,000 domestic foreign helpers in Hong Kong, representing 7 percent of the total labor force. Most of the helpers are women from the Philippines, with growing numbers from Indonesia, Thailand and Sri Lanka.
According to evidence presented during the case by the Philippines Consulate-General in Hong Kong, in the period from February to August 2004, the monthly salaries of 80 percent of all employment contracts between Filipino domestic helpers and their Hong Kong employers were agreed at the new minimum wage.
The government said it welcomes Tuesday's judgment.
Aaron Nattrass, the solicitor representing the foreign domestic workers and a human rights activist, said: "It is equitable and timely to restore [the minimum] wages [for foreign domestic helpers] to the old level in the light of revival of the [Hong Kong's] economy. There is no justification for suppressing the [minimum] wage by HK$400."
In their applications for the judicial review, the five domestic workers Julita Raza, Erma Geolamin, Rose Marie Pascual, Soledad Pillas and Eni Lestari Andayani Adi contended that both the cut in their minimum wage and the levy imposed on their employers were unlawful and constituted a discriminatory tax.
In dismissing the application, Justice Hartmann said the controversial decisions by the government did not result in the imposition of any form of tax on foreign domestic helpers.
He said the HK$400 wage cut for foreign maids was legal because the government had taken into consideration a multitude of relevant factors, such as the general state of Hong Kong's economy, in determining a minimum wage for foreign maids.
The judge also rejected the argument by the maids that the HK$400 monthly levy imposed on their employers was unlawful because it was a form of taxation not approved by the legislature. He said that since the levy was instituted under a statutory scheme, it was not a tax. He noted that, on the contrary, the levy was a fee charged for the privilege of employing non-local workers who would not otherwise have permission to work in Hong Kong
He further rejected the contention by the foreign maids that there was a "link" between the decisions on cutting minimum wages and imposing a levy.
He said the HK$400 monthly levy imposed on employers of foreign domestic helpers ought to be seen solely as a charge, which does not in any way affect the right of foreign domestic helpers to receive a set minimum wage.
As a consequence, the applicants in this case would not have legal standing to challenge the levy.
One of the Filipino applicants in the legal challenge lamented that while they shared the burden when the economy of Hong Kong was down, they had been deprived of the opportunity to share the fortune when the economy was up.
She said the HK$400 pay cut she was forced to endure would buy 50 kilograms of rice in the Philippines.
"We respect the court's decision. We will continue to monitor developments closely," Philippines Consulate official Theresa De Vega said. firstname.lastname@example.org email@example.com