JULITA F. RAZA AND OTHERS v. CHIEF EXECUTIVE IN COUNCIL AND OTHERS

HCAL 30/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO.30 OF 2003

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J U D G M E N T

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Introduction

1. Since the 1970s, a feature of Hong Kong’s demographic profile has been the presence of a large body of imported workers who are employed as domestic helpers.  They constitute a transient population, in principle being entitled to remain only so long as they remain employed.

2. Despite periods of economic difficulty, Hong Kong’s population of foreign domestic helpers has steadily increased.  Statistics reveal that in 1982 it stood at just 21,517.  By 2003, however, it had increased to 237,104, constituting something like 7% of the total labour supply.

3. The five applicants in this matter are all foreign domestic helpers.  I say that because, whether each of them was or was not employed at the time of the hearing, each was lawfully in Hong Kong in order to be employed as a domestic helper.

4. The applicants have sought by way of judicial review to challenge two decisions made by the Chief Executive in Council on 25 February 2003.  The applicants have sought declarations that these two decisions are unlawful.  In addition, they have sought orders of certiorari to quash the decisions.

5. The first decision challenged is one in terms of which the Chief Executive in Council approved the scheme for the importation of foreign domestic helpers as a ‘labour importation scheme’ pursuant to s.14(3) of the Employees Retraining Ordinance, Cap.423 (‘the Ordinance’), making the employers of foreign domestic helpers liable from 1 October 2003 to pay a levy to Government of $400 per month in respect of each helper employed.  The second decision challenged is one in terms of which the Chief Executive in Council ordered that, with effect from 1 April 2003, the minimum allowable wage of foreign domestic helpers, governed by an administrative scheme in place since 1973, should be reduced from $3,670 to $3,270 per month : a reduction of $400 per month.

6. How it was that the levy imposed pursuant to the Ordinance was set at $400 per month while the minimum wage came to be reduced by the same amount is one of the core issues in this matter.  It will readily be seen, however, that the orders made by the Chief Executive in Council on 25 February 2003 had one obvious consequence.  While an employer entering into a new contract of employment with a foreign domestic helper was liable to pay a levy to Government of $400 per month, that same employer was able, if he wished, to reduce the minimum allowable wage payable to the foreign domestic helper by the exact same sum.

7. The practical consequence of course has been that the individual employer — if he has so chosen, the decision resting entirely with him — has not himself had to suffer any financial loss.  While he has been obliged to pay a levy of $400 per month, he has been able to reduce the wage payable to his domestic helper by the exact same amount.  On one view, therefore, it has been the foreign domestic helper who has effectively had to pay the levy.

8. This practical consequence, although not universal, has been far-reaching.  This is because statistics reveal that something like 80% of employers contract with their foreign domestic helpers to pay them the minimum allowable wage only.  In this regard, the Consulate General of the Philippines has supplied evidence that in the seven month period from 1 February 2004 to 30 August 2004, 81.2% of all contracts of employment in respect of Filipino domestic helpers authenticated by the Consulate General have set the rate of remuneration at the minimum wage.  There is no reason to think that the percentage applicable to foreign domestic helpers of other nationalities has been markedly different.

9. While the applicants have challenged the decisions of the Chief Executive in Council on a number of separate grounds, it is clear that their primary contention has at all times been that the decisions — when read together — have constituted a colourable device enabling Government to impose an unlawful tax upon them.

10. The applicants have not been alone in their assertion that the decisions of the Chief Executive in Council have constituted a colourable device.  When the decisions were made known, they caused considerable public disquiet.  Many in the community saw the decisions, made on the same day and in respect of essentially the same issue (i.e. the terms and conditions concerning the importation of foreign domestic helpers) as being no mere coincidence and having to constitute some form of indirect ‘tax’ imposed on foreign domestic helpers.  By way of illustration, an editorial in a leading Hong Kong newspaper said the following :

“      By deducting from the wages of domestic helpers and donating the amount to itself through a levy on employers … [the] Administration has trampled on too many toes.”

11. While this court has the power, which is exercised regularly, to draw reasonable inferences and while, as a result, a professed coincidence or unintended unhappy timing may be found to be no such thing, it has no jurisdiction to fashion its judgment simply on what it perceives to be a lack of astuteness of Government or a lack of wisdom in its policies.  The Basic Law enshrines the separation of powers.  This court’s jurisdiction is restricted to determining matters according to law.  In matters of judicial review the court is concerned with issues of ‘legality’ not ‘correctness’.  Rarely should this fundamental principle need to be spelt out.  In the present case, however, because of the social dynamics involved, I believe it appropriate to do so.

The grounds of challenge

12. As I have said, the applicants have challenged the lawfulness of the two decisions made by the Chief Executive in Council on a number of grounds.  They may be described as follows :

(i)    That the two decisions, read together, constitute ‘in pith and substance’ a tax on foreign domestic helpers.  It is, however, an unlawful tax in that it has not, as demanded by art.73(3) of the Basic Law, been approved by the legislature.

(ii)    That the decision to reduce the minimum allowable wage was vitiated by the fact that it was based upon an irrelevant consideration.  That irrelevant consideration was the reduction by almost 10% of an economic indicator called the Consumer Price Index CPI(A), an index measuring the price level of consumer commodities and services purchased by households with the most limited monthly expenditure (i.e. the poorest households).  The CPI(A) was irrelevant because nearly 30% of its weight was allocated to the cost of housing.  Housing, however, in terms of Government mandated contracts of employment, is not a cost to be born by a foreign domestic helper, it is a cost to be born by the employer who is obliged to provide free accommodation.

(iii)    That the levy imposed upon employers of foreign domestic helpers constituted a discriminatory tax upon those employers and, through them, upon foreign domestic helpers too.  Employers of many other categories of workers imported into Hong Kong are not made subject to the levy.  As a discriminatory tax, the levy offends art.26 of the International Covenant on Civil and Political Rights (‘the ICCPR’) incorporated into the domestic law of Hong Kong by art.39 of the Basic Law.  While a differentiation of treatment will be lawful if it achieves a legitimate purpose on the basis of reasonable and objective criteria, the levy meets none of these criteria.

(iv)    That the levy imposed upon employers of foreign domestic helpers breaches art.6(1)(c) of the International Labour Convention No.97 incorporated into the domestic law of Hong Kong by art.39 of the Basic Law.  It breaches that article of the Convention because it treats the employer of a local domestic helper more favourably than the employer of a foreign domestic helper.  While a differentiation of treatment will be lawful if it achieves a legitimate purpose on the basis of reasonable and objective criteria, the levy meets none of these criteria.

(v)    That the order of the Chief Executive in Council to approve the scheme for importing foreign domestic helpers as a ‘labour importation scheme’ in terms of which a levy may be imposed constituted subsidiary legislation.  As such, in terms of s.34 of the Interpretation and General Clauses Ordinance, Cap.1, it was required to be laid before the legislature.  Further, in terms of s.28(2) of the same statute, it was required to be published in the Gazette.  It was neither laid before the legislature nor published in the Gazette.  Accordingly, as subsidiary legislation, it has not come into force or effect.

(vi)    That the levy came into effect because the Chief Executive in Council approved the scheme for importing foreign domestic helpers as a ‘labour importation scheme’ pursuant to s.14(3) of the Ordinance.  There has, however, been no publication; that is, no proper authentication or gazettal of the labour importation scheme.  In the result, it does not amount to a ‘law’ for the purposes of art.105 of the Basic Law, the only means by which deprivation of property through taxation is lawful.

What was the consequence of the decisions to impose a levy of $400 per month and to reduce the minimum allowable wage by the same amount?

13. As I have said earlier, it is the applicants’ case that the two decisions of the Chief Executive in Council, when taken together and looked at not merely in their external form but in their true substance, constitute a tax, albeit an indirect tax, on foreign domestic helpers.  That tax is unlawful because it has not been approved by the Legislative Council.

14. Common law courts have long recognised that legislatures and administrations may, for a variety of reasons, purport not to be imposing a tax or duty when, in pith and substance, they are doing exactly that.  To illustrate the point, Mr Griffiths SC, leading counsel for the applicants, placed reliance on Attorney General of New South Wales v. Homebush Flour Mills Ltd. (1937) 56 CLR 390.  This case concerned the New South Wales Flour Acquisition Act of 1931.  It was a statute passed by the legislature of that state in what the court found to be a plain attempt to evade the constitutional provision preventing a state parliament from imposing any duties or taxes.  Latham CJ said that the attempt was made—

“… by first vesting the goods in a Minister by statute at one price and then allowing the owner of the goods to buy them back at a higher price—with the option of being content to allow them to be taken at the lower price and to go out of business.  The statute does not purport to impose a tax—it purports to operate by voluntary agreement with, it is true, unpleasant alternatives.  On this occasion the procedure has been limited to flour, but it could readily be applied to all goods, so that the production or sale of any goods in any State could be made a source of revenue.”

Rich J, in his judgment, was equally to the point :

“The substance of the legislation is to impose a tax subject to a means of escape which no one would adopt if he considered the business and the pecuniary consequences.  This in my opinion is taxation.”

15. The principle affirmed in Attorney General of New South Wales v. Homebush Flour Mills Ltd. is in no way contentious.  Put shortly, it is that form alone does not dictate the true nature of a statutory or administrative scheme.  The court must look beyond form to the pith and substance.

16. It is the applicants’ case that the two Orders in Council made on 25 February 2003 — the one imposing a levy of $400 per month on the employers of foreign domestic helpers, the other permitting those employers to reduce the wage of their helpers by the exact same amount — had to amount to a colourable device.  It could be no mere coincidence.  The device, one seized upon by the Administration and/or the Executive, was designed to ensure that, whatever their outward form, the two decisions operated together to ensure that the great bulk of foreign domestic helpers would have to contribute to Hong Kong by having a tax imposed upon them.  Whether such a tax was, in terms of policy, a good or bad thing was irrelevant.  It was a tax imposed without the approval of the legislature and was therefore unlawful.

17. The Administration and/or the Executive would have known that the mechanism would result in the great bulk of foreign domestic helpers being compelled indirectly to pay the tax, said Mr Griffiths.  They would have known this because, when the previous reduction in the minimum allowable wage had taken place in 1999, more than 80% of employers, in entering into new contracts with foreign domestic helpers, had set the wage at the new minimum.

18. The reduction in the minimum allowable wage was, of course, set for 1 April 2003, six months before the imposition of the levy.  It is, however, the applicants’ case that this difference in timing was either a device itself to attempt to de-link the two or, even if it was not an intentional device, the difference in timing cannot of itself alter the true nature of the device created by the two Orders in Council.

19. It seems to me that the essential issue to be determined is not whether the Administration and/or the Executive intended to create a colourable device by which a hidden tax was imposed on foreign domestic helpers, the essential issue is whether, when viewed objectively, the consequence of the two decisions has been, in law, to create such a tax.

20. It is the respondents’ case that, leaving aside perhaps understandable, unfortunate first impressions, when each Order in Council is considered it will be seen that each stands independently, each being founded upon its own distinct architecture of reasoning.  There is therefore no link, there is no device or mechanism and the consequence is not to create a tax upon foreign domestic helpers.

21. In looking to whether the two decisions were integral to the same mechanism or were essentially independent of each other, I have been at pains to look to the character of each decision, its history and the reason why it was made.  The obligation imposed on the court on these occasions has been well summarised, albeit in respect of a legislative scheme, by Mahajan J in Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and Wearing Company Ltd [1954] S.C.R. 674, cited with approval by Jackson JA at page 505 of Inland Revenue Commissioners and Attorney General v. Lilleyman (para.55 supra) :

“In order to decide these issues it is necessary to examine with some strictness the substance of the legislation for the purposes of determining what it is that the legislature has really done; the court, when such questions arise, is not overpersuaded by the mere appearance of the legislation.  In relation to constitutional prohibitions binding a legislature it is clear that the legislature cannot disobey the prohibitions merely by employing indirect method of achieving exactly the same result.  Therefore in all such cases the court has to look behind the names, forms and appearances to discover the true character and nature of the legislation …”  [my emphasis]

22. In the present case, any attempt to discover the ‘true character and nature’ of the two Orders in Council demands an examination of their history.  That history, in my judgment, of itself goes a long way to resolving the issue in contention.

The first decision challenged : the administrative scheme for setting a minimum allowable wage

23. Hong Kong has not, and does not, have a legislative scheme which determines a minimum wage for all persons who are employed in the Territory.  Despite this, since 1973 the Government has managed an administrative scheme which has fixed a minimum allowable wage for foreign domestic helpers.  This administrative scheme has had two purposes; first, to guard against the financial exploitation of foreign domestic helpers and, second, to promote employment opportunities for locals who might otherwise find their way barred by foreign domestic helpers prepared to work for lesser wages.  It has in no way been suggested on behalf of the applicants that the scheme itself is unlawful.

24. The scheme, while lacking any legislative base, has been made effective by the fact that the second respondent, the Director of Immigration, has refused to issue visas to foreign domestic helpers unless he has had evidence before him in the form of signed contracts of employment — standard form agreements approved by the Director and relevant consular representatives — that at least the minimum wage applicable at the time has been agreed.  Accordingly, an employer will not be able to ensure the arrival in Hong Kong of a foreign domestic helper or ensure that the helper is able to remain in Hong Kong unless he has entered into such agreement.

25. Prior to July 2002, the Education and Manpower Bureau was responsible for managing the scheme; that is, for conducting an annual review of economic indicators in order to recommend whether there should be any upward or downward change in the minimum allowable wage : known by its acronym as the ‘MAW’.  Since July 2002 the responsibility has been assumed by the Economic Development and Labour Bureau.  I shall refer to both by the single description of ‘the Bureau’.

26. In his affidavit of 30 December 2003, Mr Matthew Cheung, a permanent secretary in the Economic Development and Labour Bureau, said that the Bureau has throughout the life of the scheme avoided the application of rigid formulae and has instead considered :

“… the general state of the Hong Kong economy and how it has changed since the previous review(s) by considering information such as the relevant pay trends, consumer price indices and employment situation.”

The Bureau, said Mr Cheung, has relied on :

“… a basket of such indicators which will provide an overall and comprehensive picture of the economic and employment situation in Hong Kong, especially that pertaining to lower-skilled workers like foreign domestic helpers.  After considering these factors, a broad judgment is then taken as to the appropriate level for the MAW.  The MAW is not, and has never been, simply computed by using some rigid arithmetic formula.”

27. According to Mr Cheung, the economic indicators that have been taken into account by the Bureau have not been immutable.  Some indicators have lost their statistical importance, others have grown in statistical importance.  However, while the basket of indicators may have changed over the years, the mechanism for conducting the review has not been changed, said Mr Cheung.  The review — the one for 2003 being no exception — has always been carried out in accordance with “well-tried and established past practice”.

28. A history of the variations in the minimum allowable wage over the past 30 years shows that in most years the process of review has led to an increase in the wage.  One of the highest increases was in 1983 when it was increased by some 22%.  In a number of years no change has been deemed necessary while in one year other than 2003; that is, in 1999, the minimum allowable wage was decreased by 4.9%.

29. On the evidence of Mr Cheung, it is apparent that the traditional mechanism for assessing the appropriate minimum allowable wage has not only taken into account issues such as the cost of foodstuffs, clothing and transport going directly to what constitutes an equitable pay packet for foreign domestic helpers but has also taken into account broader issues going to what Mr Cheung described as “the general state of the Hong Kong economy”; issues therefore going to what the market as a whole would consider equitable or, put another way, what would ensure the ability of an employer to pay an acceptable wage and the foreign domestic helper to receive an acceptable wage.  Put simply, I understood Mr Cheung to say that the assessment of an appropriate minimum allowable wage could not ignore market realities.

30. The applicants never contended, of course, that, once a minimum wage had been set, it was impermissible to reduce that minimum wage.  Indeed, during the hearing it does not appear to have been contested by the applicants that a reduction in the minimum allowable wage, if justified by relevant economic criteria, may even act on occasions to protect the interests of foreign domestic helpers.  In this regard, by way of illustration, during the course of his submissions, Mr Benjamin Yu SC, for the respondents, made reference to an April 2002 newspaper article in which representatives of foreign domestic helpers were said to have opposed moves being mooted at that time to increase the minimum allowable wage from $3,670 to $5,000 on the basis that the proposal “was not designed for their well being but intended to price them out of the market”.

Assessment of the 2003 minimum allowable wage

31. In his affidavit of 30 December 2003, Mr Matthew Cheung said that the revision of the 2003 minimum allowable wage was the first revision in four years.  The basket of economic indicators reviewed in 2000, 2001 and 2002 had not been sufficiently significant to warrant any adjustment.  Mr Cheung said, however, that by the end of 2003 “the cumulative changes in the local economy since the beginning of 1999 had become significant”.  The economic indicators presented to the Bureau for the purposes of the 2003 review, said Mr Cheung, revealed significant changes in the period between the first quarter of 1999 and the last quarter of 2002, changes which reflected the downturn in Hong Kong’s economy.  In this regard, Mr Cheung cited the following :

“(1)    the Consumer Price Index(A) had fallen by around 10%;

 (2)    the nominal wage index for service workers had fallen by around 6%

 (3)    the median monthly employment earnings of service workers and shop sales workers had dropped by around 11%;

 (4)    the median monthly employment earnings of workers in elementary occupations [e.g. cleaners, dishwashers, domestic helpers] had declined by around 16%;

 (5)    the median monthly household income … of local households with foreign domestic helpers had fallen by 17% from $48,000 to $40,000.  Over the same period, the monthly household income of the lower quartile in the distribution of monthly incomes of local households with foreign domestic helpers had decreased by 15% from $29,500 to $25,000, and that of the upper quartile by 14% from $80,000 to $69,000;

 (6)    the GDP had increased by 2.3% in real terms in 2002 compared with 2001; and

 (7)    the seasonally adjusted unemployment rate had risen from 6.3% to 7.2%.”

32. It was on the basis of a basket of indicators containing these statistics, said Mr Cheung, that the Bureau concluded that the minimum allowable wage should be reduced by 10.9%, a reduction of $400 from $3,670 to $3,270 and that was the recommendation made to the Chief Executive in Council.

33. Aside from a single challenge to the relevance of one of the basket of indicators taken into account by the Bureau — the Consumer Price Index CPI(A) — the applicants have at no time contended that, taken in isolation, the decision of the Bureau to recommend a reduction in the minimum allowable wage by 10.9% was itself unreasonable.  To have done so, in my view, would have been untenable.  The objective evidence revealed by the economic indicators demonstrated persistent deflation resulting in a material reduction in the earning power of those who employ foreign domestic helpers and those members of the local workforce who occupy similar job categories to foreign domestic helpers.

34. In addition, the evidence shows that the decision by the Bureau to recommend a 10.9% reduction in the minimum allowable wage was made in accordance with what Mr Cheung has described as “well-tried and established past practice”.  There is no evidence that the figures were ‘massaged’ in any way.

The second decision challenged : the statutory scheme for imposing a levy

35. Hong Kong’s need for imported workers has not been restricted to domestic helpers.  From time to time demand for workers in other areas of endeavour has outstripped local supply.  When this demand has been identified, Government has put into place schemes for the temporary importation of workers.  A prime example has been the scheme implemented in or around 1990 for the importation of construction workers to help with the building of the new airport and airport-related projects.

36. While permitting the importation of foreign workers when a need is demonstrated, the Government has, however, attempted to fashion its labour-related policies so that local workers, especially lower-skilled workers who have been particularly vulnerable to the restructuring of the economy, will have employment opportunities.  To this end, Government has espoused a policy of training and retraining in order to equip the local workforce with the skills increasingly demanded by a knowledge-based economy.

37. To help in the cost of such training, the Government has looked to those employers who have benefited from the various labour importation schemes which have permitted them to import workers.  What Government has sought from those employers is a levy to be paid in respect of each imported worker, that levy to go not into general revenue but directly towards the cost of upgrading the skills of the local workforce.

38. Mr Matthew Cheung has spoken of this policy in the following terms :

“The Administration is and has always been concerned to see that local workers have sufficient employment opportunities.  Generally, Hong Kong has had an adequate supply of low-skilled workers, although at certain times demand has outstripped supply.  The aims of the various labour importation schemes described above were to provide workers where employers’ needs could not be met by local supply.

At the same time, the Administration considered it important to train local workers and to assist those local workers who were vulnerable to changes due to the restructuring of the economy, so as to equip them with skills to secure new employment.

The Administration therefore wished to implement a policy of requiring those employers who turn to lower-skilled imported labour to contribute towards the cost of training and retraining local employees, to the long-term benefit of the economy as a whole.”  [my emphasis]

39. Government policy found legislative expression in the Ordinance which was promulgated in 1992.  The purpose of the Ordinance is stated to be as follows :

“… to establish the Employees Retraining Board as a body corporate, to establish the Employees Retraining Fund, to provide for the imposition of a levy payable by employers who employ imported employees, and to provide for the collection of the levy by the Director of Immigration from those employers in respect of those employees and the remittance of the levy to the Board for the purposes of the Fund …”

40. The third respondent in this matter, the Employees Retraining Board, is established in terms of the Ordinance.  Its function is to hold and administer all levies received for the purpose of training eligible members of the local workforce in suitable vocational skills.  In this regard, s.4 of the Ordinance reads (in part) :

“The functions of the Board are—

       (a)    …

       (b)    to receive the levy imposed on employers and remitted by the Director;

       (c)    to consider the provision, administration and availability of retraining courses and supplementary retraining programmes intended or designed for the benefit of eligible employees in adjusting to changes in the employment market by acquiring new or enhanced vocational skills;

       (d)    to identify particular occupations or classes of occupation that have high vacancy rates and in respect of which eligible employees may secure employment or re-employment by attending retraining courses or supplementary retraining programmes as trainees to acquire new or enhanced vocational skills;

       (e)    …

       (f)     to determine the requirements to be satisfied by eligible employees for the purposes of applying to attend retraining courses or supplementary retraining programmes and receive retraining allowances, and the amount of retraining allowances to be paid to those eligible employees as trainees.”  [my emphasis]

41. The Ordinance, however, does not require all employers of imported workers, without any form of differentiation, to pay a levy to enable eligible members of the local workforce to acquire suitable vocational skills.  The levy is only payable by employers who employ imported workers in terms of a designated ‘labour importation scheme’.  Whether a scheme is so designated is a matter for the Chief Executive in Council.  The legislature has reposed that discretion in him.  In this regard, s.14 of the Ordinance reads :

“(1)   A levy, to be known as the Employees Retraining Levy, shall be payable by an employer to the Director in respect of each imported employee to be employed by him under a contract of employment and granted a visa under subsection (4).

(2)   …

(3)   For the purposes of this section, the Chief Executive in Council may, from time to time, approve a scheme (‘labour importation scheme’) under the terms of which a levy shall be payable by employers in accordance with this Part.

(4)   An employer may, under the terms of the labour importation scheme, apply to the Director for permission to employ such persons as imported employees as the Director may, in accordance with a quota allocated by or with the authority of the Secretary in respect of that employer under that scheme, grant visas to those imported employees for that purpose.”  [my emphasis]

42. The amount of the levy is defined in subsection (2) of s.14.  It reads :

“… the amount of levy payable under subsection (1) in respect of each imported employee employed by an employer shall be the sum specified in Schedule 3 multiplied by the number of months specified in the contract of employment entered into between that employer and that imported employee.”  [my emphasis]

43. Schedule 3 of the Ordinance has set the amount of the levy at $400.

44. It is important, I believe, to appreciate that the quantum of the levy was set some ten years ago or longer by the legislature not by the Chief Executive in Council.  Accordingly, it was not necessary, when the Order in Council to approve the scheme for importation of foreign domestic helpers as a labour importation scheme was made, to determine the amount of the levy that should be imposed.  That matter was pre-determined by the Ordinance.

45. Prior to February 2003, the importation of foreign domestic helpers into Hong Kong had not at any time been designated a labour importation scheme by the Chief Executive in Council.  Accordingly, Hong Kong employers of foreign domestic helpers had not been subject to any levy payable in terms of the Ordinance.  That, of course, changed on 25 February 2003 when, pursuant to his powers under s.14(3) of the Ordinance, the Chief Executive in Council approved the existing scheme for the importation of foreign domestic helpers as a labour importation scheme, ordering that, with effect from 1 October 2003, all employers entering into contracts of employment with foreign domestic helpers would be subject to the levy of $400 per month.

46. The decision to approve the importation of foreign domestic helpers as a labour importation scheme was based on the recommendations of a body called The Task Force on Population Policy.

47. In July 2002, the Chief Executive in Council had spoken of an urgent need to develop a “comprehensive population policy”.  Following this, the Chief Secretary for Administration had set up the task force.  The membership of the task force included the Chief Secretary himself, the Financial Secretary and Secretaries having charge of a number of responsibilities including commerce and industry, housing and lands, education and manpower and economic development and labour.  The Secretary for Economic Development and Labour was of course at the time the Secretary responsible for the annual review of the minimum allowable wage of foreign domestic helpers.

48. The terms of reference of the task force may be defined as follows; that is, to identify the social and economic challenges facing Hong Kong over the next 30 years arising out of its changing population profile and to recommend practical measures to meet those challenges.  The task force was required to submit its report by the end of 2002.

The report of the Task Force

49. The report of the task force identified Hong Kong’s low fertility rate, well below the population replacement level, and the fact that its population was aging.  The maintenance of the population was therefore substantially reliant on immigration.  That immigration, however, came mainly from the Mainland under the One Way Permit Scheme, a scheme devised essentially to facilitate family reunion rather than the attraction of skilled workers.  In the result, there was a far greater inflow of lower-skilled workers than those who possessed suitable skills for Hong Kong’s knowledge-based economy.

50. The report noted with concern that there was already evidence of a mismatch between the skills required by our increasingly sophisticated economy and the qualifications of our workforce : an over-supply of lower-skilled workers who would face far greater competition for jobs and an unmet demand for those with appropriate skills.  In respect of this disturbing imbalance, the report said the following :

“Notwithstanding the enormous expansion of basic and higher education opportunities in the late seventies and early nineties respectively, 48% of those aged 15 and over have an educational level of Secondary Three or below, and only 26% have attained post-Secondary Five qualifications.”

51. The report continued by saying :

“With the advent of a knowledge-based economy, ensuring that Hong Kong’s human capital can meet the changing needs of the economy is key to Hong Kong’s future success.  However … both our local population and new arrivals may fail to meet these challenges.  Indeed, there is evidence of an increasing mismatch between job requirements and the qualifications of the workforce.  In a manpower projection survey published in 2000, we predicted a surplus of over 136,000 low-skilled workers with educational attainment of lower secondary and below, and a potential unmet demand for over 110,000 workers with post-secondary and higher education by 2005.”

52. The report spoke of the difficulties facing lower-skilled workers :

“At present, the local labour market already faces an excess supply of lower-skilled workers, which will take some time to be fully absorbed.  The additional labour supply stemming from inflow of low-skilled new arrivals aggravates the situation.  Local workers, particularly those at the lower end of the labour market, can thus be expected to face greater competition for jobs and pressure for lower wages.  This will bring about other social and welfare ramification.”  [my emphasis]

53. The report acknowledged that, even with active encouragement, it was not always easy to attract the necessary skilled workers to Hong Kong to help boost the economy :

“As the process of globalisation intensifies, and as most developed countries are moving towards a predominantly knowledge-based economy, the quest for talent and skills becomes a primary factor in determining the economic success of a place or country.  Major developed countries like Canada, the United States and, increasingly, European countries, have all set out specifically to target skilled independent immigrants.  These countries all have established immigration policies, which are designed to select from among the ‘best and brightest’ of those who apply.  Other countries such as Singapore, Australia and Japan are also stepping up the admission of skilled immigrants.  In the Mainland, it is known that major cities like Beijing, Shanghai, Guangzhou and Shenzhen have taken aggressive moves to attract talent from other parts of the country and from overseas.  Hong Kong faces tough competition in its quest for talent.”

54. The report noted that, because of the real need for higher-skilled workers, when they were imported in order to take up employment in Hong Kong, they were not subject to the restraints imposed on lower-skilled workers :

“[Hong Kong] welcomes talent and professionals from outside Hong Kong to work and settle here.  These skilled immigrants and their dependants are non-permanent residents but may become permanent residents after having ordinarily resided in Hong Kong for a continuous period of not less than seven years.  There are various admission schemes for people from the Mainland and overseas.  For the admission of foreign professionals, there are not quota or job sector restrictions.  Successful applicants are allowed to bring along their dependants.”

55. In respect of foreign domestic helpers, while the report classified them as lower-skilled workers, it acknowledged that they played an important, on-going role in Hong Kong’s economic life :

“The employment of FDHs [foreign domestic helpers] to take care of household chores has helped improve the quality of living for Hong Kong families.  The arrangement also enables children, elderly and disable persons to live with their family.  There is also evidence that hiring FDHs has boosted the percentage of double-income families as more women are able to engage in full-time work.  According to the 2001 Population Census, an average FDH employer household typically comprises a married working couple with one or two children.  In 2001, 61% of FDH employer households have two economically active members ….”

56. The task force recognised that foreign and local domestic helpers occupied different niches in the employment market.  Having considered relevant data, the report concluded :

“… FDHs and LDHs comprise two distinct markets both in terms of supply and demand, with LDHs preferring part-time jobs and households requiring full-time domestic helpers preferring FDHs.”

57. In respect of the levy, the task force said :

“Since its introduction in the 1970s, the policy on the admission of FDHs [Foreign Domestic Helpers] has by and large remained intact.  As discussed in Chapter II, we have to include the FDH policy as part of this study due to the substantial size of this transient population and its continuing growth.  Having reviewed the existing policy, the Task Force considers that a number of improvements should be made to enhance the integrity of the mechanism for admitting FDHs, with a view to minimising abuse and displacement of local jobs by FDHs.

We recommend that a monthly levy of the same amount (now at $400) as that imposed under the Supplementary Labour Scheme should be introduced.  This will remove the disparity of treatment between these two groups of employers.  The income generated will be used for training/retraining purposes.  The levy will be paid by employers and will apply to new contracts or renewal of contracts.  At the current level, i.e. $400 per month, the proposed levy will generate annual income of $1.14 billion.  The levy will be imposed under the Employees Retraining Ordinance …”

58. In a paper dated 26 February 2003 prepared for the Legislative Council, the Administration explained the decision to impose the levy by saying :

“The imposition of a levy on FDH [foreign domestic helper] employers will place the employment of FDHs on the same basis as other imported employees.  By directing the levy income so collected to the training and retraining of local workers, it will meet the objective of re-equipping and enhancing the skills of local workers amidst the current economic restructuring and high unemployment of Hong Kong.”

59. The task force’s recommendation that a levy be imposed did not, however, stand on its own.  The recommendation was part of a broader recommended strategy, one prompted by the size and continuing growth of the foreign domestic helper community.  The task force recommended that the imposition of the levy should be accompanied by improved administrative measures to ensure that migrant workers, such as foreign domestic helpers, were not exploited while, to protect the local workforce, more stringent measures should be adopted to prevent foreign domestic helpers taking up employment in non-domestic fields.

60. The report also noted that active steps were being taken to improve the employment opportunities for local domestic helpers and that the placement of local domestic helpers had increased.

61. The task force report, however, dealt not only with the introduction of a levy in terms of the Ordinance but also included a recommendation that, in light of the relevant economic indicators, the minimum allowable wage of foreign domestic helpers should be reduced.  In this regard, the report was to the following effect :

“The minimum allowable wage (MAW) for FDHs has not been adjusted since February 1999.  It is proposed that a cut of $400 be made to reflect downward adjustments in various economic indices since the last adjustment in 1999 (e.g. CPI(A) has fallen by around 10% since early 1999 and the median monthly employment earnings of workers in the elementary occupations by around 16%).  This will take effect on 1 April 2003.”

62. Why the task force should have included in its report not only a recommendation that went directly to one of its terms of reference (how to rectify skills imbalances in the working population) but also a matter which had been reviewed as a matter of routine every year since 1973; namely, an adjustment to the minimum allowable wage, was never explained in the report itself.  Nor, with respect, during the course of submissions was any cogent reason given.  But no bad faith can be implied and, the task force itself being entirely made up of members of the Administration, it appears to have been included as a matter of convenience.

No colourable device

63. As I indicated earlier, the history behind the two Orders in Council is, in my view, determinative.  The history reveals that the two orders arose out of separate and distinct schemes, schemes managed according to different criteria.

64. Were the two recommendations, however, used by the Chief Executive in Council as a convenient device that presented itself?  In my view, despite some lingering concern, it must be taken that the Chief Executive in Council acted on the recommendations made in the task force report by relying on the reasoning contained in the report and accompanying papers.  That report states quite clearly why the levy was recommended and why the reduction in the minimum allowable wage was recommended.  The reasons are in each instance distinct and flow out of entirely different imperatives.  Nothing in the report suggests linking the two recommendations in the manner alleged by the applicants and, in my view, there is no ground for inferring that the Chief Executive in Council did anything other than act in accordance with the reasons given for the recommendations.

65. I cannot dismiss the suggestion that the two Orders in Council may have been made at the same time and may have been announced together in order somehow to assure employers of foreign domestic helpers.  It is difficult to imagine that the Administration, when the announcements were made, would not have appreciated the nexus provided by the common denominator of $400 per month.  But a knowing decision to make and announce the orders at the same time in order perhaps to assure employers that, if they chose, the choice being solely one for them, there was some way open to them of relieving the impact of the levy, cannot, in my opinion, of itself be sufficient to show that the two orders had the consequence of constituting the colourable device that the applicants assert.

66. Of importance, the evidence shows that the two sums of $400 — the $400 levy and the $400 reduction in the minimum allowable wage — were arrived at by independent means or, to express it another way, were set by entirely different criteria.  There is no evidence of any ‘massaging’ of the figures in order to arrive at a desired symmetry nor, in my judgment, despite possible first blush appearances, can such evidence be inferred.

67. The levy of $400 was set some ten years ago not by way of an administrative scheme but by being stated in the Ordinance to be the applicable sum in respect of all levies imposed under that statute.  Accordingly, once the scheme for importing foreign domestic helpers was designated a labour importation scheme, it automatically followed that the levy would be $400.

68. As for the reduction in the minimum allowable wage, this has been subject to annual review by the relevant Bureau as an administrative scheme since 1973 and has, when deemed appropriate, been adjusted by means of an established set of principles.  There is no evidence that these principles were changed for the 2003 assessment or ‘massaged’ in some way so as to achieve a desired but artificial result.

69. As for the percentage of the reduction, as I have emphasised earlier, relevant indicators showed that many Hong Kong residents had suffered greater losses in income than that recommended by the Bureau for foreign domestic helpers.  For example, the indicators showed that the median monthly household income of those who employed foreign domestic helpers had fallen by some 17%, a reduction in the household income of the employers some 6% more damaging than the reduction in the helpers’ minimum allowable wage.

70. As I have said earlier, it could not therefore be argued — indeed, it was not argued — that, taken on its own, the reduction of the minimum allowable wage by $400 was in any way outside of the discretion of a reasonable decision-maker.

71. Having regard to the economic indicators, Mr Yu submitted on behalf of the respondents that the reduction in the minimum allowable wage would have come about irrespective of whether a levy was decided upon or not; in short, that it was realistically inevitable, and it was therefore perverse to suggest that the reduction was somehow engineered simply as a means of off-setting the levy.  In my judgment, there is strength in that submission.

72. What also cannot be overlooked is that, if the consequence of the two Orders in Council was to impose a tax on foreign domestic helpers, it was not to impose a tax on all of them but only on some.  The amount of the levy was set by statute and was imposed on all employers of foreign domestic helpers.  Contrary to this, the amount of the minimum allowable wage was not imposed on all foreign domestic helpers.  They have at all times been free to negotiate the level of their wages at any figure above the minimum and the evidence has revealed that almost 20% of them have been successful in doing so.

73. In Attorney General of New South Wales v. Homebush Flour Mills, a case relied upon by Mr Griffiths, the scheme also allowed for a choice but, as the court found, it was in reality no choice at all and all those subject to the scheme; that is, those subject to the hidden duty, had either to comply or go out of business.  That cannot be said in the present case.

74. As for the suggested device of the Administration appearing to de-link the two decisions by giving them different commencement dates, the reason for the different commencement dates has, in my view, been adequately explained.  In his affidavit, Mr Cheung said that the timing of the reduction in the minimum allowable wage was largely in accordance with past practice.  There was little, he said, to prevent the reduction being implemented quickly.  The levy on the other hand could not be implemented as quickly as the logistics of collection had to be worked out.  The Immigration Department needed time to upgrade its computer system to enable it to collect levies, issue reminders, differentiate between lump sum and half-yearly payments and the like.

75. For the reasons given, I am therefore satisfied that the two Orders in Council were never intended to constitute a colourable device and did not, whatever the intention, constitute such a device.  I am further satisfied that, viewed objectively, the two orders have not had the consequence of imposing any form of tax on foreign domestic helpers.  The two orders, although linked by subject matter, were, in my view, always intended to be independent of each other and, whatever the intention, when considered objectively, must be read that way.

Is the levy in any event a form of taxation?

76. It is the applicants’ case that the levy, which they say has been indirectly imposed on foreign domestic helpers, is unlawful because it is a form of taxation which has not been approved by the legislature and thereby offends art.73(3) of the Basic Law.  Art.73(3) reads :

“The Legislative Council of the Hong Kong Special Administration Region shall exercise the following powers and functions:

(1)    …

(2)    …

(3)    To approve taxation and public expenditure.”

77. I have found that the levy, while imposed on their employers, has not been imposed on foreign domestic helpers themselves.  But even if I am wrong in that regard, I have come to the conclusion that in any event the levy does not constitute ‘taxation’ for the purposes of art.73(3).

78. Although there are authorities which attempt to define the essential features of a ‘tax’ and thereby ‘taxation’, it seems to me that there can be no definitive statement in this regard.  There is no easy checklist.  Certainly, in the present case I have not found the resolution of the issue an easy one.  In each case what is required — as the authorities themselves confirm — is to look to all the features of the legislation that is said to impose the tax.  The difficulties were well expressed in Luton v. Lessels (2002) 210 CLR 333, a judgment of the High Court of Australia in which Gaudron and Hayne JJ said (paragraphs 49 and 50) :

“All of the features which Latham CJ identified in Matthews v Chicory Marketing Board (Vict) (67) as typical of a tax —compulsory exaction, by a public authority, for public purposes, enforceable by law, and not being payment for services rendered — are important.  The presence or absence of none of them, however, is determinative of the character of the legislation said to impose a tax.  It is necessary, in every case, to consider all the features of the legislation which is said to impose a tax.

As was said in the joint judgment of the whole Court in Air Caledonie International v The Commonwealth (68):

‘There is no reason in principle … why the compulsory exaction of money under statutory powers could not be properly seen as taxation notwithstanding that it was by a non-public authority or for purposes which could not properly be described as public.’

Secondly, as the Court also pointed out in Air Caledonie (69), the reference to ‘payments for services rendered’, as an antonym for ‘tax’, is only one example of various special types of exactions of money which are not taxes.  Charges for the acquisition or use of property, fees for a privilege, and fines or penalties for criminal conduct are some other examples of what are unlikely to amount to forms of tax.”  [my emphasis]

79. In my judgment, at its heart, the levy imposed under the Ordinance is a fee charged for taking up a privilege.  In this regard, it seems to me that the Ordinance is to the following effect.  Hong Kong has long administered a restrictive policy of immigration.  In the ordinary course, therefore, an employer may only engage a person to work in Hong Kong who has the right to reside here.  He may not engage a person who does not have that right.  If, however, the Chief Executive in Council, in terms of an approved scheme, permits persons to enter Hong Kong to work who would otherwise not have that permission, and if an employer wishes to take advantage of that special concession (i.e. that privilege) then that employer must pay a fee for that advantage.

80. In Lutton v. Lessels, Kirby J also looked to the defining features of a law that imposes a tax and said (paragraph 117) :

“By that doctrine, the most significant feature that distinguishes a ‘law imposing taxation’ from one that does not, is that such a law, with very few exceptions (153), has the purpose and effect of raising general revenue for the government.  This is the view that has also been expressed in the United States Supreme Court.  In United States v Butler (154) it was said:

‘A tax, in the general understanding of the term, and as used in the Constitution, signifies an exaction for the support of the Government.  The word has never been thought to connote the expropriation of money from one group for the benefit of another.’

To like effect are decisions of the Supreme Court of Canada and other final courts of Commonwealth countries.  (Massey-Ferguson v Saskatchewan [1981] 2 SCR 413 at 432; cf Ratilal Panachand Gandhi v State of Bombay AIR 1954 SC 388 at 395.)”  [my emphasis]

81. I believe it is significant that in the present case, the levy has not been imposed in order to raise general revenue for the Government.  The levy has been imposed on one segment of society (employers of foreign domestic helpers) for the benefit not of the state at large but for one other segment of society (unskilled workers).  That, in my view, constitutes in substance the expropriation of money from one group for the benefit of another.

82. To approach the matter from a slightly different angle, taxes normally constitute general revenue for the government although they may of course be raised for specific purposes.  But the statutory scheme created by the Ordinance provides for levies raised to go not to the purse of the Exchequer but instead direct to the Employees Retraining Board which may only use the monies for the purpose of increasing the vocational skills of local workers.  That again does not seem to me to a mark of ‘taxation’.

83. That, by itself, of course, is not a determinative feature.  I note, for example, that in Lower Mainland Dairy Products Sales Adjustment Committee v. Crystal Dairy Ltd [1933] AC 170, Lord Shankerton, delivering the opinion of the Privy Council, found that certain adjustment levies constituted taxes even though they were distributed to a specific category of persons : ‘traders in the manufactured products market’.

84. However, in considering whether the adjustment levies constituted taxation, Lord Shankerton took the following into account; namely, that the levies were compulsorily imposed by a statutory body, that they were enforceable at law, a certificate under the hand of the statutory body being prima facie evidence they were due and, in my view, of significance, that—

“A dairy farmer who fails to comply with every determination, order or regulation made by a Committee under the Act is to be guilty of an offence against the Act (s.13), and to be liable to a fine under s.19.  Compulsion is an essential feature of taxation : City of Halifax v. Nova Scotia Car Works, Ltd. [1914] AC 992 (PC).”

85. In the present case, however, as I have read the Ordinance, a failure by an employer to pay a levy constitutes no more than a civil debt recoverable as any civil debt is recoverable in private law.  There is no criminal sanction nor any statutory compulsion visiting a failure to make payment.  Nor does the Ordinance provide the Administration with any special evidential tool to enhance its management of the levy scheme.

86. In the course of submissions, it was contended on behalf of the applicants that a failure to obey a statutory direct may itself constitute a criminal offence.  In this regard, reliance was placed on the old authority of R v. Walker (1875) L.R. 10 Q.B. 355.  In my judgment, however, the law today is more accurately stated in R v. Horseferry Road Justices, ex parte Independent Broadcasting Authority [1987] 1 QB 54, a decision of the Divisional Court, the headnote of which reads :

“… although failure to comply with a statutory duty had occasionally been held to constitute an indictable offence punishable by an unlimited fine, the ‘doctrine of contempt of statute’ was no more than a rule of construction and one more readily applicable to ancient statutes, which often did not define any offence or impose any penalty for breach of statutory duty, than to modern statutes which were to be construed as creating criminal offences only if they expressly or by necessary implication so provided …”

87. It seems to me that there is nothing in the Ordinance which, expressly or by necessary implication, states that a failure on the part of an employer to pay a levy constitutes a criminal offence.

88. As I have said, the levy due under the Ordinance is, of course, payable like any private, unsecured debt is payable and an employer who does not pay may be sued.  But, as Lord Shankerton observed in the Mainland Diary Products case, ‘compulsion is an essential feature of taxation’.  Clearly, the compulsion he spoke of was something greater than the law gives to every citizen who is owed an unsecured debt by another.  But, on a true construction of the Ordinance, no such compulsion applies to the levy.

89. In Leake v. Commissioner of Taxation (State) (1934) 36 WALR 66, at 67, Dwyer J said :

“A compulsory contribution, or an impost, may be none the less a tax, though not so called; the distinguishing feature of a tax being in fact that it is a compulsory contribution, imposed by the sovereign authority on, and required from, the general body of subjects or citizens, as distinguished from isolated levies on individuals.”  [my emphasis]

A labour importation scheme — through which the levy is imposed — may be for a limited purpose and may concern only a very limited number of employers.  Is it to be said that such a small group of employers, perhaps only half a dozen or so, who, by paying the levy, gain a specific commercial privilege not open to others, are nevertheless, in making that payment, paying a tax?  I think not.

90. In summary, although it is not a clear cut issue and I do not wish to be taken as setting any principle, I have been drawn to the conclusion that s.14 of the Ordinance is not a taxing provision.  A levy imposed pursuant to that section is not a ‘tax’.  It is instead more in the nature of a fee charged for the privilege of employing non-local workers who would otherwise not have permission to work here.

The decision to reduce the minimum allowable wage was based on an irrelevant consideration

91. The applicants submitted that, in considering whether or not to reduce the minimum allowable wage, the Administration (and through it, the Chief Executive in Council) had regard to an irrelevant consideration.  The reliance on that irrelevant consideration, it was said, vitiated the entire decision to reduce the guaranteed minimum wage.  The irrelevant consideration was the reduction of an economic indicator called the Consumer Price Index CPI(A).  This index measures the price level of consumer commodities and services purchased by households with the most limited monthly expenditure; that is, the poorest households.  This index was irrelevant, it was said, because nearly 30% of its weight was allocated to the cost of housing.  But housing was not an expense to be met by foreign domestic helpers.  In terms of the standard contracts of employment mandated by Government this expense was always to be met by employers.

92. I find no substance in this contention.  What must be remembered is that the basket of indicators taken into account in determining whether there should be an adjustment in the minimum allowable wage points not simply to matters of direct economic relevance to foreign domestic helpers but importantly to what Mr Cheung has described as “the general state of the Hong Kong economy” and how it has changed since any previous review.  Earlier in this judgment, I explained that these matters go to broader issues of what the market as a whole would consider equitable or, put another way, what would ensure the ability of an employer to pay an acceptable wage and the foreign domestic helper to receive an acceptable wage having regard to market realities.

93. The CPI(A) was simply one of the indicators demonstrating that the Hong Kong economy had been undergoing persistent deflation, this deflation going not only to matters of housing costs but also to matters such as wages.

94. In any event, as Mr Yu, for the respondents, emphasised, the CPI(A) is calculated based on the price movements of almost 1,000 items of consumer goods and services.  It does not, and cannot, exactly mirror the spending pattern of any single person in Hong Kong or any specific segment of the Hong Kong population.  It is intended to be used and has been used as no more than an objective assessment of the general movement in prices affecting poorer households.

95. But, in my judgment, even if, as the applicants asserted, the CPI(A), because it dealt in large measure with housing costs, was an irrelevant consideration, it was only one of a basket of economic indicators.  I understand that the Bureau took into account seven sets of such indicators, the CPI(A) being by no means the most pessimistic of them.  In the circumstances, it is not, in my view, credible that the Bureau’s assessment, and the Chief Executive in Council’s decision made in the light of that assessment may have been, any different if it had not taken into account the CPI(A).

Do the applicants have sufficient interest in the remaining challenges?

96. A claimant for judicial review is obliged to satisfy the court that he has ‘a sufficient interest’ in the matter which is the subject of the review : see s.21K(3) of the High Court Ordinance, Cap.4.  A claimant does not have to demonstrate that he personally is aggrieved; for example, that he has suffered financially.  But that being said, the court rarely entertains an application by a person whose interests are not affected at all.  The phrase ‘sufficient interest’ is expressed in plain English and clearly requires a weighing exercise, one involving both law and fact.

97. As I said earlier in this judgment, the applicants true interest in these proceedings has always, at its core, been founded on the contention that the two Orders in Council were linked, that link constituting a device which has resulted in an indirect tax being imposed upon them and all other foreign domestic helpers.  That contention, of course, potentially at least, constituted a very real interest and, if that link had been demonstrated, then, in my opinion, the applicants would have had no difficultly in showing that they had a sufficient interest in all the grounds of challenge that they have raised whether those grounds go to both Orders in Council read together or to either of them in isolation.

98. I have found, however, that there is no such link.  The result is this.  The Order in Council in terms of which the $400 per month levy has been imposed on the employers of foreign domestic helpers is to be seen solely as a charge imposed upon those employers.  The imposition of that charge does not in any way affect the right of foreign domestic helpers to receive a set minimum wage.

99. In light of this, Mr Yu, for the respondents, has said that the applicants no longer have a sufficient interest in any of the challenges that go solely to the lawfulness of the Order in Council approving the scheme for the importation of foreign domestic helpers as a labour importation scheme, that scheme giving rise to the statutory levy of $400 per month.  Mr Yu put this question.  If the Order in Council had been made without any reference to the reduction in the minimum allowable wage, and fell to be considered entirely on its own, would these applicants have had a sufficient interest in challenging the lawfulness of that order?  The answer to that question must, I believe, be that they would then in all probability have had no interest.  Absent some evidence in the particular case of a connection giving rise to a real interest; for example, the possibility of losing employment or having the terms of that employment reduced, I do not think that the law as it stands contemplates employees for purely altruistic purposes seeking judicial review in respect of a matter which affect only their interest of the employers.

100. In the present case, the evidence shows that before the introduction of the levy some 80% of employers paid only the minimum allowable wage.  It would be difficult therefore, although not untenable, to argue on behalf of the applicants that if the levy was removed it may benefit them and foreign domestic helpers in general by prompting their employers to pay them more than the minimum wage.

101. In the circumstances, therefore, certainly as to this court’s discretion to grant the applicants a remedy in respect of the Order in Council which resulted in the levy, I think there is substance in Mr Yu’s contention that one of the matters that must be taken into account is the applicants lack of sufficient interest in or potential benefit arising from the granting of any such remedy.

102. I am not, however, sufficiently persuaded by Mr Yu’s submissions to conclude that I should not consider the substance of the remaining challenges.  In any event, if I am shown to be wrong in finding that there was no link between the two Orders in Council, then my findings in respect of the remaining challenges will be of direct relevance.

The levy constitutes a discriminatory tax law

103. It is the applicants’ case that the $400 levy imposed on employers of foreign domestic helpers in terms of s.14 of the Ordinance constitutes a discriminatory tax law and is therefore inconsistent with art.26 of the International Covenant on Civil and Political Rights (‘the ICCPR’) which reads :

“All persons are equal before the law and are entitled without any discrimination to the equal protection of the law.  In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.”

104. Art.39 of the Basic Law incorporates the provision of the ICCPR into Hong Kong’s domestic law.

105. During the course of submissions, there was much argument as to whether s.14 creates a tax law or an immigration law.  I have, however, found no need to resolve this issue.

106. For the applicants, Mr Griffiths submitted that the levy was discriminatory because it does not apply to all foreign workers whatever their level of skill.  In this regard, it was significant, said Mr Griffiths, that, excluding foreign domestic helpers who number well over 200,000, there were only about 1,000 persons, perhaps less, working in Hong Kong in terms of labour importation schemes and whose employers were therefore subject to the levy.  This, said Mr Griffiths, was to be contrasted with the very large number of persons who, in terms solely of an administrative policy managed by the Director of Immigration, were granted employment visas to come and work in Hong Kong — some 54,000 between 2000 and 2002 — and in respect of whom no levy was payable.

107. Even if money was required to train unskilled local workers, he said, it was nevertheless discriminatory to impose the levy — a tax — on the employers of some imported workers and not on others.

108. That the levy was discriminatory, said Mr Griffiths, was hi-lighted by the fact that, even though the Administration’s policy was based supposedly on levels of skill, domestic helpers being classified as lower-skilled, not all lower-skilled workers admitted into Hong Kong were made the subject of the levy.  In this regard, he pointed to such persons as musicians, English teachers whose native tongue is English, singers, bar dancers and airline cabin staff.  These, he said, were ‘low-skilled and low paid’ and yet were not made subject to a levy in terms of a labour importation scheme.

109. I pause to say that, in my view, while the skill levels as well as the skills themselves may be different, I do not accept that such persons as musicians, singers, airline cabin crew and language teachers who teach their native language can be said to possess only lower skills which rationally could not be considered of advantage to Hong Kong.  To the contrary, I believe it speaks for itself that all these occupations require their own particular dexterity, learning and experience.

110. Much was made of the skill levels of airline cabin crew.  No evidence was advanced as to those skill levels or lack of them but it seems to me that any reasonable person would acknowledge that they require specific skills concerning aircraft safety and passenger management in the event of emergencies, skills which they must learn.  These are in addition to skills of personal presentation, service and the like.  Hong Kong is an air traffic centre.  Accordingly, I do not see how it can be said that trained cabin crew are not, because of their training and skills, of real advantage to Hong Kong.

111. ‘Discrimination’, of course, as it is to be understood in the ICCPR, does not exclude the different treatment of persons.  In this regard, the Human Rights Committee established under art.28 of the ICCPR has commented :

“Finally, the Committee observes that not every differentiation of treatment will constitute discrimination, if the criteria for such differentiation are reasonable and objective and if the aim is to achieve a purpose which is legitimate under the Covenant.”

112. The editors, Harris and Joseph, in their work The International Covenant on Civil and Political Rights and United Kingdom Law, have said that a differentiation is ‘objective’ if it has a legitimate aim and is ‘reasonable’ if it has a reasonable relationship of proportionality between the means employed and the aim sought to be realised.

113. Within our own jurisdiction, in considering art.10 of the Bill of Rights —“All persons shall be equal before the courts and tribunals” — Bokhary J (as he then was) set a similar test.  In R v. Man Wai Keung (No.2) [1992] 2 HKCLR 207, at 217, he said :

“Clearly, there is no requirement of literal equality in the sense of unrelentingly identical treatment always.  For such rigidity would subvert rather than promote true even-handedness.  So that, in certain circumstances, a departure from literal equality would be a legitimate course and, indeed, the only legitimate course.  But the starting point is identical treatment.  And any departure therefrom must be justified.  To justify such a departure it must be shown: one, that sensible and fair-minded people would recognize a genuine need for some difference of treatment; two, that the difference embodied in the particular departure selected to meet that need is itself rational; and, three, that such departure is proportionate to such need.”

114. As for the policy of the Administration concerning the importation into Hong Kong of higher-skilled and lower-skilled workers, in his affidavit of 30 December 2003, Mr Matthew Cheung summarised that policy as follows :

“The Administration’s policy is that employers who turn to lower-skilled imported labour rather than local workers should contribute towards the cost of training and retraining local employees.

The Administration’s policy regarding skilled workers wishing to come to Hong Kong, including genuine business persons and entrepreneurs with capital and expertise, and qualified professionals, technical staff, administrators and managerial personnel, is different, as they possess skills, knowledge or experience of value to, and sought after by, Hong Kong.  They bring substantial economic benefit to Hong Kong, not only by meeting the manpower needs of the local market, but also by improving the quality of the population as a whole and enhancing the competitive edge of Hong Kong.  Such employees, with their expertise or experience in their professions, can contribute towards upgrading the quality of the local workforce through skill transfer.

Accordingly, the Administration has a policy of attracting skilled workers to Hong Kong, as explained in the report of the Task Force on Population Policy, and does not impose a levy on their employers.  Unlike FDHs [foreign domestic helpers], skilled workers such as professionals are admitted under the general policy on entry for employment and relevant admission schemes, not through a labour importation scheme under the Ordinance.  They are admitted with less rigid requirements as regards the form or duration of contract.  They are permitted to come with their dependants and may apply to become Hong Kong permanent residents after seven years of continuous ordinary residence in accordance with the law.”

115. Skills differ and must, of course, be assessed in the light of Hong Kong’s particular needs.  In this regard, Mr Cheung said :

“In assessing whether imported workers possess sufficient skills to fall within the Administration’s general policy on entry for employment, the Labour Department and Immigration Department will, where necessary, consult the Vocational Training Council (which classifies employees into different categories according to their skill level, for example, ‘managerial and professional’, ‘supervisory and technician’ and ‘operative’, in its manpower survey report), the Census and Statistics Department, the tertiary institutions, and relevant professional bodies.”

116. Further to this, in looking to the applicants’ case, Mr Cheung refuted the suggestion that such persons as airline cabin crew, native English speakers, musicians and the like were unskilled.  Such persons, he said, possessed skills which were considered by the Administration to be of value to Hong Kong.  For reasons already spelt out in this judgment, I do not see how that view can be criticised.

117. In my view, therefore, on the facts as they have been demonstrated it cannot be said that the Administration has managed a discriminatory policy by giving employment visas to some lower-skilled workers while demanding that other lower-skilled workers only be granted permission to work here in terms of a labour importation scheme.  The challenge that the scheme imposing the levy is discriminatory must be based on the contention that no difference can legitimately be made between lower-skilled and higher-skilled workers.

118. In respect of the importation of labour, the Administration’s policy has plainly been based on socio-economic needs.  Such needs are constantly evolving.  Our courts accept that the Administration is best placed to make the necessary assessment of those needs and to formulate policies which will meet them.  In respect of socio-economic matters — the need to entice skills from outside and to increase skills available locally — our courts therefore give a wider margin of appreciation to the Administration than they would in respect of immutable, fundamental rights such as the right to freedom of religion or to a fair trial.  The principle was defined by Lord Hope in R v. Director of Public Prosecutions, ex parte Kebilene and Others [2002] 2 AC 326, at 381 :

“… difficult choices may have to be made by the executive or the legislature between the rights of the individual and the needs of society.  In some circumstances it will be appropriate for the courts to recognise that there is an area of judgment within which the judiciary will defer, on democratic grounds, to the considered opinion of the elected body or person whose act or decision is said to be incompatible with the Convention.  This point is well made at p.74, para.3.21 of Human Rights Law and Practice (1999), of which Lord Lester of Herne Hill and Mr Pannick are the general editors, where the area in which these choices may arise is conveniently and appropriately described as the ‘discretionary area of judgment’.  It will be easier for such an area of judgment to be recognised where the Convention itself requires a balance to be struck, much less so where the right is stated in terms which are unqualified.  It will be easier for it to be recognised where the issues involve questions of social or economic policy, much less so where the rights are of high constitutional importance or are of a kind where the courts are especially well placed to assess the need for protection.”

[my emphasis]

119. The Human Rights Committee established in terms of art.28 of the ICCPR has made utterances to the same effect.  By way of illustration, Oulajin and Kaiss v. The Netherlands (406 and 426/90) four of the Committee members appended the following opinion :

“With regard to the application of article 26 of the Covenant in the field of economic and social rights, it is evident that social security legislation, which is intended to achieve aims of social justice, necessarily must make distinctions.  It is for the legislature of each country, which best knows the socio-economic needs of the society concerned, to try to achieve social justice in the concrete context.  Unless the distinctions made are manifestly discriminatory or arbitrary, it is not for the Committee to reevaluate the complex socio-economic date and substitute its judgment for that of the legislatures of States parties.”

120. In light of these principles, it would seem to me that the issue of whether the levy constitutes a discriminatory law may be defined as follows :

(i)    On the accepted basis that persons who seek to work in Hong Kong are treated differently, can it be shown that the policy is nevertheless objective and reasonable?

(ii)    Or, to express it as it was expressed in R v. Man Wai Keung (No.2), can it be shown, first, that sensible and fair-minded people would recognise a genuine need for some difference of treatment, second, that the difference in treatment is rational and, third, that it is proportionate to the need?

(iii)    In looking to these issues, as they concern socio-economic matters, a wider margin of appreciation must be given to the legislature and the policy-makers than would be given in respect of matters concerning rights that are fundamental.

121. In looking to these issues, what must first be recognised is that our courts have accepted that there are objective justifications for policies which restrict aliens from taking up local employment.  In this regard, in Santosh Thewe v. Director of Immigration [2000] 1 HKLRD 717 at 720, Stock J (as he then was) observed :

“… there is a cardinal distinction between discrimination on the one hand and, on the other, distinctions which have objective justification.  Immigration regimes worldwide, and for reasons too obvious to have to mention, are wary about letting in as residents those who might become a burden on state resources, or those who might unfairly take up jobs at the expense of the permanent residents of the host country.  There is clear objective justification for such a policy and it does not, in my judgment, begin to constitute unequal treatment of the kind to which art.25 [of the Basic Law] refers.”

122. In my judgment, the purposes of the levy must be legitimate.  The report of the task force has spoken of an increasing mismatch of demand for skills and the ability of our local workforce to supply those skills.  According to the report — its findings not being disputed — there is already an over-supply of lower-skilled workers, a situation which can be expected to worsen.  Lower-skilled workers can therefore expect greater competition for available jobs and greater pressure placed on them to accept lower wages.  As the report noted : “This will bring about social and welfare ramifications”.  Translated into common parlance, this may be understood to mean greater discontent among the lower-skilled and higher unemployment in their ranks leading to greater demands on the social welfare system.  No government wants such a situation.  One rational answer of course is to teach vocational skills to the lower-skilled.

123. But to train people requires funds, funds which in the past have not been readily available.  In this regard, I can do no better than quote verbation Mr Yu’s submission : “Substantial resources will be needed to retrain the large number of lower-skilled or less-educated workers who will need assistance in finding work.  Given its very limited resources, the Employees Retraining Board has so far confined its services to those who are aged 30 or over and have received no more than lower secondary education.  This is a very significant limitation.  For example, it meant that 56% of unemployed persons in the period March to May 2004 would not have been eligible to apply for the Board’s placement-tied retraining courses.”

124. On behalf of the applicants it has been said that the purpose of the levy is not legitimate because its use will not be limited only to the training of local domestic helpers so that they can replace foreign domestic helpers.  I find nothing in this challenge.

125. The legislative scheme contained in the Ordinance looks to the training of eligible local workers as a whole.  The scheme works on the basis that vocational needs will change in a constantly changing market.  For example, the Employees Retraining Board is required in terms of the Ordinance to design training programmes to benefit eligible workers “in adjusting to changes in the employment market”.  Given the wide margin of appreciation to which the legislature is entitled in looking to socio-economic matters of this kind, I do not see how this statutory policy can be criticised.

126. In any event, what counsel for the applicants have suggested would, in my view, be unwieldy in the extreme.  Taken to its logical conclusion, it would mean that, if a truck driver was imported under a labour importation scheme, the levy payable in respect of that worker could only be used to train a local worker as a truck driver in order to replace him.  Leaving aside the administrative difficulties, such a course may be entirely short-sighted.  What if the need for truck drivers was temporary and the longer term need was for some other vocational skill?  Must that money be wasted on training somebody for a passing need only?

127. On behalf of the applicants, it has further been said that the levy is unreasonable in that the sum of $400 per month is unrelated to the wages of imported workers.  Some categories of workers are thereby rendered ‘proportionately more unattractive’ than others.  This again appears to be a challenge to the ‘general’ as opposed to ‘particular’ nature of the legislative scheme.  I do not see the force of the contention.

128. Employers know that, in terms of a labour importation scheme, all imported workers will be subject to the same levy.  It is therefore a commercial decision for employers : is it worthwile or not to import a worker?  Given the wide margin of appreciation that must be given to the legislature in purely economic matters of this kind, it seems to me that the applicants have fallen far short of showing that the lack of a sliding scale of levies renders the scheme itself unreasonable; that is, disproportionate to its legitimate aim to the degree that it vitiates the scheme as a whole.

129. If the purpose of the levy is legitimate, as I have found it to be, is it then reasonable in the sense that there is a reasonable relationship of proportionality between the means employed and that legitimate aim?

130. The applicants say that the imposition of the levy on the employers of some imported workers and not on others is unreasonable.  If there is to be a levy then, to be reasonable, it should be imposed on all imported workers whatever their differences in skill levels.

131. I disagree.  The report of the task force made it clear that Hong Kong needs higher-skilled workers and that without them the economy as a whole will suffer.  The report also made it clear that there was competition in many places in the world to attract skilled workers.  If higher-skilled workers (and the companies that employed them) are to be attracted to Hong Kong then encouragement is required not bureaucratic discouragement.  In the circumstances, again giving a wide margin of appreciation to the Administration, I do not see how it can be said to be disproportionate to the aim to be achieved to say, as the policy does say : Hong Kong has a pressing requirement for higher-skilled workers (bankers, accountants, technical experts, lecturers and the like) and they will be encouraged to work here without hindrance for the greater social and economic good of the community.  But if a lower-skilled worker is to be imported then the employer of that worker must assist to train and retrain the surfeit of lower-skilled workers who are already here and, as permanent residents of Hong Kong, have a legitimate call to be assisted in securing suitable vocational skills.

132. The applicants have also said that the imposition of the levy on the employers of foreign domestic helpers will raise far more than is necessary to train or retrain the local workforce (two to three times more) and in that sense is entirely disproportionate.  That allegation, however, has been refuted by the respondents who say that the potential demand outstrips the financial resources that historically have been available.  In this regard, Mr Matthew Cheung, in his affidavit of 30 December 203 said the following :

“When the Ordinance was enacted in 1992, the aim was to fund the ERB’s [Employees Retraining Board’s] activities through the levy collected from employers.  However, because of the substantial increase in training needs (the number of applications for the ERB’s training places rose from 84,835 in 1997/98 to 184,826 in 2002/03, an increase of 118%), and the drastic fall in levy income to the ERB … the Government had to inject a total of HK$1.6 billion as a capital grant to ERB by 1999.  With the twin impact of a drop in levy receipts and the continually increasing demand for retraining places, ERB was no longer able to sustain its activities through its levy income and the capital injection alone.  Since 2001/02, an annual subvention of about HK$400 million has been provided by the Government of ERB.  With the availability of the income from the levy imposed on employers of FDH, an opportunity arises for us to expand and improve the scope of the retaining services to benefit more people.”

133. In the absence of cogent evidence that points to the contrary, I do not see that this Court can gainsay the Administration’s assertion of the potential needs for the funds raised by the levy.

134. In all the circumstances, I am satisfied that the imposition of the levy is both objective and reasonable.  To employ the test set out in R v. Man Wai Keung (No.2), I am satisfied :

(i)    That sensible and fair-minded people would recognise the genuine need for a difference in treatment between those who wish to employ higher-skilled workers (for whom there is a pressing economic need) and those who wish to take advantage of a labour importation scheme to bring in lower-skilled workers, including foreign domestic helpers, when Hong Kong has a surfeit of lower-skilled workers who themselves, unless given new skills, face an uncertain future.

(ii)    That the difference in treatment by not imposing a levy on those who wish to bring in higher-skilled workers and imposing a levy on those who wish to bring in lower-skilled workers, having regard to the nature of the levy, is both rational and proportionate.

The imposition of the levy is inconsistent with art.6(1)(c) of the International Labour Convention No.97

135. As with the ICCPR, the International Labour Convention No.97 (‘the ILO’) is incorporated into Hong Kong’s domestic law by virtue of art.39 of the Basic Law.  Art.6(1)(c) of the ILO reads :

“Each Member of which this Convention is in force undertakes to apply, without discrimination in respect of nationality, race, religion or sex, to immigrants lawfully within its territory, treatment no less favourable than that which it applies to its own nationals in respect of the following matters :

(a)    …

(b)    …

(c)    employment taxes, dues or contributions payable in respect of the person employed;”

136. On behalf of the applicants, Mr Griffiths submitted that art.6(1)(c) of the ILO, in speaking of taxes, dues and contributions payable ‘in respect of the person employed’, looked not only to impositions placed directly on immigrants but also to impositions placed on their employers.

137. Mr Yu, for the respondents, contested this assertion.  In addition, he submitted that the article, in so far as it relates only to ‘immigrants lawfully within’ a territory, does not apply to transient workers such as foreign domestic helpers.

138. I have not found it necessary to resolve these often difficult and technical arguments of interpretation.  In my view, as with art.26 of the ICCPR, art.6(1)(c) of the ILO, while it prohibits discrimination, does allow for a differentiation of treatment.  I see no reason why the test of whether a difference of treatment under the ICCPR constitutes discrimination or not should not apply equally to the same issue under the ILO.

139. On that basis, for the reasons that I have already given, I am satisfied that any differentiation in terms of art.6(1)(c) of the ILO, looking to the different context of that convention from the ICCPR, nevertheless brings the same result; namely, that any differentiation is both objective and reasonable and meets the test set in R v. Man Wai Keung (No.2).

The approval of the scheme as a labour importation scheme constitutes subsidiary legislation

140. On behalf of the applicants, it has been submitted that the order of the Chief Executive in Council made pursuant to s.14(3) of the Ordinance approving the scheme for the importation of foreign domestic helpers as a labour importation scheme has constituted subsidiary legislation.

141. As such, so it has been argued, in terms of s.34(1) of the Interpretation and General Clauses Ordinance, Cap.1, it was mandatory that it be laid before the legislature.  That subsection reads :

“All subsidiary legislation shall be laid on the table of the Legislative Council at the next sitting thereof after the publication in the Gazette of that subsidiary legislation.”

142. In addition, so it has been argued, in terms of s.28(2) of the same statute it was mandatory that it be published in the Gazette.  That subsection reads :

“Subsidiary legislation shall be published in the Gazette.”

143. The Order in Council, it is accepted, was neither laid before the Legislative Council nor was it published in the Gazette.  As such, so it has been contended on behalf of the applicants, as subsidiary legislation, it has not come into force or effect and at this time therefore has no binding effect.

144. In opposition to this, it has been the respondents’ case that the Order in Council was administrative in effect not legislative and, as such, put into place a purely administrative scheme which, in order to be of force and effect, was not required to be placed before the Legislative Council nor to be formally published in the Gazette.

145. The core issue therefore is whether the Order in Council has constituted subsidiary legislation.

146. S.3 of the Interpretation and General Clauses Ordinance defines subsidiary legislation as follows :

“ ‘subsidiary legislation’ and ‘subordinate legislation’ mean any proclamation, rule, regulation, order, resolution, notice, rule of court, bylaw or other instrument made under or by virtue of any Ordinance and having legislative effect.”

147. Clearly, the Order in Council constituted an ‘order’ or ‘other instrument’.  Equally clearly, it was made by virtue of statutory power; namely, s.14(3) of the Ordinance.  But did the Order in Council have ‘legislative effect’?  Or, to put it another way, was it legislative in character?

148. In considering whether an order made pursuant to a statute will itself have legislative effect or whether it will be administrative only, I have been assisted by three authorities.

149. The first is that of Boswell Williams v. Government of the Island of St. Lucia [1970] AC 935.  The headnote to that authority commences :

“By section 3 of the Land Acquisition Ordinance of St. Lucia :

‘(1)    If the Governor in Council considers that any land should be acquired for a public purpose he may cause a declaration to that effect to be made in the manner provided by this section and the declaration shall be conclusive evidence that the land to which it relates is required for a public purpose.’

On December 20, 1963, the Administrator in Council purported to make a declaration under section 3 for the compulsory acquisition of certain land owner by the appellant.  The declaration provided, inter alia :

‘And Whereas it is considered by the Administrator in Council that the land … should be acquired for a public purpose, to wit, the development of tourism; Now Therefore It is Hereby Declared by the Administrator … that … the land … shall be acquired for the abovementioned purpose and shall vest in the Crown.’ ”

In challenging the validity of the declaration of the Administrator in Council, it was said that the declaration was itself a statutory instrument; that is, an instrument having legislative effect.  The Court of Appeal of the West Indies Associated States Supreme Court rejected that contention, the Chief Justice of the Court saying :

“In my opinion this argument fails because its premise, that the declaration is a legislative act, is erroneous.  In my judgment, the declaration is merely the method prescribed by the Ordinance for recording an administrative (or ministerial) decision reached by the Governor in Council, with a view to the publication of that decision in the Gazette and at other prescribed places for the information of the public.  It has no legislative effect and of itself does not either enact or alter law.”

[my emphasis]

The Privy Council, in its opinion, approved of the reasons advanced by the Chief Justice.  The declaration, said the Council, was not legislative in effect.

150. The second authority is that of Attorney General of Canada v. Gaeten Plante 29 WCB (2d) 299.  A prisons disciplinary tribunal had acquitted an inmate of a disciplinary offence on the basis that a document giving the prisoner details of his alleged offence had not been served on him within the time limit imposed by a directive of the Director, the head of the prisons service.  The Crown judicially reviewed the decision of the tribunal as being wrong in law.  The Federal Court (per Pinard J) quashed the decision of the tribunal :

“In my view, it is sufficiently clear on reading the decision that the disciplinary court considered compliance with the two-day limit set out in section 15 of Directive 580 to be mandatory, without it having to ask whether in fact the failure to comply with this limit in the specific circumstances of the case had prejudiced the inmate by preventing him from preparing a full answer and defence.  In my opinion by adopting this position the disciplinary court wrongly attributed a legislative effect to the Directive and failed to exercise its jurisdiction.  It is well established that the Commissioner’s Directives are clearly of an administrative, not a legislative, nature.  The authority for this is Martineau et al. v. Matsqui Institution Inmate Disciplinary Board [1979] 1 S.C.R. 118, in which the Supreme Court of Canada, per Pigeon J, stated the following at 129 : ‘I have no doubt that the regulations are law.  The statute provides for sanction by fine or imprisonment.  What was said by the Privy Council with respect to orders in council under the War Measures Act in the Japanese Canadians case [[1947] A.C.87], at p.107, would be applicable.’  The legislative activity of Parliament is still present at the time when the order are made, and these orders are ‘law’.

I do not think the same can be said of the directives.  It is significant that there is no provision for penalty and, while they are authorized by statute, they are clearly of an administrative, not a legislative, nature.  It is not in any legislative capacity that the Commissioner is authorized to issue directives but in his administrative capacity.”  [my emphasis]

151. The third authority is Canadian too, also concerning directives issued by the head of the prisons service : Kelly Lee Dorscheid v. Warden of Kent Institution and Others 39 WCB (2d) 300.  In its judgment, the British Columbia Supreme Court (per Collver J) said (paragraphs 50-55) :

“… the principal concern is whether Mr Dorscheid’s procedural rights were breached.

There are three potential sources of the petitioner’s procedural rights: statutory procedural requirements; the common law duty of procedural fairness; and s.7 of the Charter of Rights and Freedoms.  For reasons which will become apparent, I will confine my discussion to the first of the mentioned sources.

The Act and the Regulations contain certain procedural requirements in respect of the involuntary transfer and security reclassification of inmates.  Compliance with those statutory procedural requirements is properly a matter for judicial review.

In addition to the provisions of the Act and the Regulations themselves, the Commissioner is authorized to make rules and designate those rules as ‘Commissioner’s Directives’ under ss.97 and 98 of the Act …

Commissioners Directives are of an administrative, not a legislative nature.  They do not have the force of a statute or of regulations: Canada (A.G.) v. Plante.  As such, failure by the Correctional Service authorities to comply with a Commissioner’s Directive does not, by itself, amount to a judicially reviewable violation of an inmate’s rights.

The issue is whether ‘in light of the specific circumstances of each case, the failure to comply with the Directive actually impairs fairness’: Plante, at p.168.  In other words, if non-compliance with a Commissioner’s Directive amounts to a breach of an inmate’s common law right to procedural fairness in the particular circumstances of the case, then judicial intervention may be warranted.”

152. In light of these authorities, and on a reading of the Ordinance, I am satisfied that an approval by the Chief Executive in Council of a labour importation scheme in terms of s.14(3) gives rise to no more than an administrative arrangement.  It does not make law nor alter law.

153. It is significant that the legislature has not given powers to the Chief Executive in Council, when he acts in terms of s.14(3), to impose penalties, criminal or civil, to assist in the efficient management of the scheme.  It is apparent that a scheme approved under s.14(3) is managed and enforced only by administrative means.

154. In my view, therefore, it is clear that the legislature, in vesting the discretion in the Chief Executive in Council ‘from time to time’ to approve a scheme as a labour importation scheme, has done no more than say that it is within his discretion in the general application of Hong Kong’s immigration policies, which are themselves administrative in nature, to determine as a matter of policy the eligibility criteria for any scheme.

Lack of publication

155. It has been said on behalf of the applicants that, as there has been no formal authentication of the terms of the scheme nor formal publication in the Gazette, the scheme does not amount to a law for the purposes of art.105 of the Basic Law, the only means by which deprivation of property by way of taxation is lawful.

156. I have however in this judgment made two findings.  First, I have found that the approval of the labour importation scheme by the Chief Executive in Council has had no legislative effect.  To put it another way, it has not created a law.  Second, I have found that the $400 per month levy charged to employers of foreign domestic helpers under the scheme does not constitute a tax.

157. The Ordinance does not require the Chief Executive in Council to approve a scheme and thereafter to publish it in the Gazette.  The Ordinance requires only that he approves a scheme.  By contrast, for example, see s.9(4) and (5) of the Town Planning Ordinance, Cap.131, in terms of which the Chief Executive in Council, having approved a draft plan, is obliged to make formal publication in the Gazette.

158. Provided the terms of administrative scheme are formulated with sufficient precision and are adequately accessible, there is no need for that scheme to be formally published.

159. The applicants in this matter do not contest the fact of the approval of the scheme nor suggest that they are unaware of the terms of it.  The applicants complaint is simply that there is no formal proof of either.  However, Mr Matthew Cheung, in his two affidavits, has explained in detail how the fact of the Order in Council and the terms of the scheme were published.  He has said that both Orders in Council were published in the report of the task force which was made available to the general public.  In addition, the Chief Secretary made a statement in both Cantonese and English which was placed on the Government website the same day.  Further, the Legislative Council brief was placed on the council’s website.  In his affidavit of 30 December 2003, Mr Cheung said the following :

“I would point out that it has long been the Administration’s practice to announce the decisions of the Executive Council through a Legislative Council brief, which is provided to both the Legislative Council and the public.  Given the concern of FDH-exporting countries, we also briefed the relevant Consulates when the Chief Secretary addressed the Legislative Council on 26 February 2003.”

160. As to the terms of the scheme, these have been reduced to writing and have at all times been available to those who wish to know its terms.  The terms are contained in a guide book issued by the Director of Immigration. 

161. In so far as it may be necessary to show that the scheme is ‘prescribed by law’, I am satisfied that it has been approved in accordance with the Ordinance and has been made accessible to the public.  As an administrative scheme it has therefore been so prescribed.

Does the scheme apply only to the initial importation of a foreign domestic helper?

162. By way of postscript, it should be said that the applicants raised the query whether the scheme could properly be applied only to the original importation of foreign domestic helper or whether it could properly be applied to the employment of a helper after an earlier contract had expired when that helper remained in Hong Kong.

163. As an administrative scheme enforced by administrative means, it is for the Administration to set the terms and parameters of that scheme.  The terms of the scheme have specifically referred to this matter :

“Should an employer wish to continue to hire the same FDH upon the expiry of the two-year period, he/she will be required to submit a fresh application.”

Conclusion

164. For the reasons set out in this judgment, the application for judicial review must be dismissed.  As to costs, I understand that the applicants are all legally aided.  If necessary, of course, I will hear from the parties as to costs.