Provisional Legislative Council

PLC Paper No. CB(2) 615
(These minutes have been seen
by the Administration)

Ref : CB2/PL/PS/1

Panel on Public Service

Minutes of meeting held on Monday, 22 September 1997 at 10:45 am in Conference Room A of the Legislative Council Building

Members present :

Hon IP Kwok-him(Chairman)
Hon LEE Kai-ming (Deputy Chairman)
Hon Mrs Elsie TU, GBM
Hon Mrs Selina CHOW, JP
Hon Ronald ARCULLI, JP
Hon CHAN Wing-chan
Hon Andrew WONG Wang-fat, JP
Hon Ambrose LAU Hon-chuen, JP
Hon CHENG Yiu-tong

Members absent :

Hon David CHU Yu-lin ] other commitments
Dr Hon Philip WONG Yu-hong ]

Public officers attending :

For Item III

Ms Anissa WONG

Deputy Secretary (Civil Service)1 (Acting)

Mr S S DILLION

Principal Assistant Secretary (Civil Service)4

For Item IV

Mr D W PESCOD

Deputy Secretary (Civil Service)2

For Item V

Ms Sandra LEE

Secretary for the Civil Service (Acting)

For Item VI

Mr D W PESCOD

Deputy Secretary (Civil Service)2

Clerk in attendance:

Mrs Sharon TONG

Chief Assistant Secretary (2)1

Staff in attendance :

Mr Paul WOO

Senior Assistant Secretary (2)5

---

I.Confirmation of minutes of meeting held on 25 August 1997
(PLC Paper No. CB(2) 322)

The minutes of meeting held on 25 August 1997 were confirmed.

II.Date of next meeting and items for discussion

2.The next meeting would be held on Monday, 27 October 1997 at 10:45 am to discuss the following items :

1. Review of civil service fringe benefits;

2. Putonghua training for civil servants; and

3. Update on employment of temporary staff in the civil service

III.Review of declaration of interests by civil servants - scope and progress
(PLC Paper No. CB(2) 321(02))

3.Deputy Secretary (Civil Service)1 (Acting) (DS(CS)1(Atg)) briefed members on the scope of the Administration's current review of the system for declaration of interests by civil servants as set out in the paper. She said that the Civil Service Regulations (CSRs) provided guidelines and imposed requirements on civil servants to avoid and report conflict of interest situations. All civil servants were required to declare their private investments in Hong Kong on appointment. Posts with access to sensitive market information were designated as Tier I posts and the post-holders were required to declare their investments in Hong Kong annually. Other posts were designated as Tier II posts and the officers concerned were required to report their investments once every two years. Once they were promoted to directorate ranks, Bureau Secretaries and Heads of Department could require individual officers in designated posts where a potential conflict of interest might arise between their official duties and their private investments to declare such investments in places outside Hong Kong. As at September 1997, 707 posts were designated as Tier I posts and there were around 1 500 directorate officers in Tier II posts. Since the declaration systems had been implemented for some time, the Civil Service Bureau (CSB) was conducting an internal review on their effectiveness. The Administration would undertake consultation when initial recommendations were developed.

4.Members enquired of whether investments in the name of the family members of a civil servant, or a company, should also be reported. DS(CS)1(Atg) replied that the reporting mechanism had not specifically defined the term " family members'. The guiding principle was whether the investments were under the control of the civil servants concerned. If affirmative, the investments needed to be declared. DS(CS)1(Atg) added that the duty to declare rested with the civil servants, who could seek guidance from departmental management and the CSB where in doubt.

5.In response to Mr Andrew WONG's question, DS(CS)1(Atg) said that investment activities in Hong Kong by a company registered outside Hong Kong and with which a civil servant was connected were also covered by the present declaration requirements. On the other hand, a civil servant's investment in a company registered outside Hong Kong and engaging in property trading in the Mainland involved the question of investment outside Hong Kong. Whether such investment should be declared was a matter for the decision of the Heads of Department, taking into consideration any potential conflict of interest that might arise between the official duties of the officer and the business undertakings concerned.

6.Referring to the Chairman's question on the number of declarations made in the past three years, DS(CS)1(Atg) explained that as regular reporting was required under the CSRs, civil servants somehow had to make declarations at different points in time. Declarations should be made to the Heads of Department, or to the CSB, depending on the nature of duties of the officers involved. DS(CS)1(Atg) added that the requirement on officers in Tier I posts to report within seven days each investment transaction involving a value equivalent to HK$200 000, or three months salary whichever was the less, was included when the declaration system was first implemented in 1995. Whether or not this standard should be revised would be examined in the current review.

7.At the request of Mr LEE Kai-ming, the Administration undertook to provide figures on disciplinary cases of failure to comply with the requirements in the past three years.	Adm

IV.Pay level survey mechanism
(PLC Paper No. CB(2) 321(03))

8.Deputy Secretary (Civil Service)2 (DS(CS)2) took members through the paper, which explained the mechanism and methodology used in the last pay level survey carried out in 1986 and subsequent developments. He advised that the current thinking on pay level surveys was that broad comparability with the private sector, though important, should not necessarily be the overriding consideration for determining civil service pay. There were difficulties in finding enough private sector job analogues for making job-for-job comparisons. The Administration believed that the ultimate objective should be to offer remunerations sufficient to attract, retain and motivate staff of a suitable calibre to provide the public with the services they expected. The remuneration package should be regarded as fair by both the civil servants and the community at large. To achieve this, the Administration would continue to undertake reviews of individual grades as and when justified. There were in place a number of independent advisory bodies which were tasked specifically to advise the Administration on matters relating to pay and conditions of service. There were such bodies for directorate grades, the disciplined services and the non-disciplined services respectively. The Government also carried out an annual pay trend surveys to track movements in the private sector and all these taken together formed the basis for civil service pay adjustments.

9.Mrs Elsie TU noted that in recent years civil servants in the higher-paid brackets received a higher rate of pay increase than their lower-paid counterparts. She said that this would widen the gap between the rich and the poor and create a disincentive to work. DS(CS)2 responded that the mechanism for the annual pay revision exercise was to make reference to findings of the pay trend survey carried out by an independent Pay Survey Research Unit under the Standing Commission on Civil Service Salaries and Conditions of Service. In trying to make a reasonable assessment of pay adjustments in the private sector, the annual survey covered some 70 to 75 large and small companies which were representative of good employers. The survey was monitored by a committee comprising representatives from the management, the Standing Commission and civil service unions. DS(CS)2 further pointed out that the findings of the pay trend surveys in recent years had indicated a higher pay increase for employees in the upper pay bands. Yet, the Government would look carefully at the pay trend indicator for the lower pay band officers. In order to minimise the relativity problem and to ensure that lower paid officers would not get worse off, the Administration had in the past few years brought the pay trend indicator for the lowest paid staff (such as Model Scale One officers) up to the level for the middle band (such as artisans). DS(CS)2 said that the present mechanism allowed the Administration to study factors other than simple pay movements. For the past three years, annual pay adjustments for civil servants had been more or less in line with the inflationary factor, i.e. the Consumer Price Index (A).

10.Mrs Elsie TU said that she was very much concerned about the situation for low income workers such as labourers, who could barely manage to make ends meet with the small pay increases. She considered that the Government should set an example instead of following the trend of the private sector. DS(CS)2 responded that the Government believed that the remuneration for civil servants were fair and the fact that the Government was able to recruit and retain staff of sufficient quality at all levels was indicative of the accuracy of this view.

11.Referring to the " iron rice-bowl " connotation of civil service jobs, Mr Ronald ARCULLI enquired of how the differences in the job nature between the civil service and the private sector had been taken into account in setting pay adjustments. DS(CS)2 replied that the reality was that many jobs in the civil service did not have equivalents in the private sector. There were restrictions of personal freedom as well as danger and stress in certain types of jobs which were not existent in the private sector. As society developed and became more complicated, differences between the public and private sector employment were bound to emerge. The mechanism used by the Government was by means of " groupings' or " broad-banding " . One of the methods, for example, was to use educational bench-marks as a means to compare approximate likes with likes. As regards the 70 odd companies included in the pay trend surveys from which information on changes in pay was collected, DS(CS)2 said that the choice of the companies was reviewed each year. It was entirely voluntary upon the companies to respond to the survey.

12.Mrs Selina CHOW enquired whether the fringe benefit element of private sector pay had been discounted in conducting civil service pay adjustment exercises. DS(CS)2 replied that apart from the pay trend survey, there was a separate annual review exercise which dealt with fringe benefits available in the private sector. He cited the example of a general trend in the private sector for employers to offer " encashment " , i.e. a shift away from providing benefits in kind (such as housing) to payment of allowances, which then became part of the overall pay. Often, these encashments contained identifiable benefits elements and could be broken down into various categories. The pay level survey took into account the overall remuneration package, inclusive of both the benefits portion and the pay portion. The annual pay trend survey and fringe benefits survey singled out the pay element and the benefits element respectively. In addition, pay reviews for individual grades, when that took place, would cover the pay and benefits elements as well as other factors such as stress and pressure of work etc peculiar to the classes of officers concerned. DS(CS)2 added that fringe benefits matters were constantly under review and the Government had brought forward changes from time to time. Since last year, for example, Overseas Education Allowance had been withdrawn for new recruits to the civil service.

13.Mr Andrew WONG noted that civil service pay surveys only classified civil servants into broad pay bands. He opined that civil servants should be broken down into different categories according to their job nature and separate pay reviews should be done accordingly. The Administration advised that there were about 400 grades of officers in the civil service with over 1 200 different ranks, a large part of which had no equivalents in the private sector for comparison purpose. The Government had examined various approaches in the past and the last pay level survey conducted in 1986 looked at broad groupings as a reasonable way to come up with meaningful job evaluations. The independent Committee of Inquiry appointed in 1988 had concluded that there were no convincing grounds for disputing the general outcome of the survey although some adjustments in certain areas were called for.

14.In response to Mr Andrew WONG's question, DS(CS)2 advised that the Administration had carried out four regrading exercises since 1989.

15.Mrs Selina CHOW opined that some professional grade officers in the civil service appeared to be overpaid when compared with their counterparts in the private sector. Mr Andrew WONG pointed out that even when a regrading exercise resulted in a downward adjustment of pay and benefits, civil servants already serving in the grade would not be affected because they were allowed to retain their personal salary scale. Mr WONG enquired whether a system of " marked-time pay " practised in the UK could be implemented. Under that system, a serving civil servant would not be entitled to pay increases until he reached the point on the revised pay scale where the pay level was higher than the pay he was currently receiving. DS(CS)2 responded that there were mechanisms in place to deal with the situation. He said that where a particular grade was not required in one department, the officers could be transferred to another department. In the extreme case where a grade became redundant, arrangements could be made for officers in that grade to move to another grade. DS(CS)2 added that the Administration would take different factors into consideration when reviewing individual grades. In doing so, it was necessary to keep in mind the objectives of a good employer and the need to attract and retain good employees. He said that changes in the private sector occurred very rapidly. As the Government wanted to maintain a reasonable flow in terms of changes, it was inevitable that changes in the civil service pay could not be quite as responsive as in the private sector.

16.Members enquired whether there were recruitment difficulties for particular grades of civil servants and whether a new pay level survey would be conducted in the foreseeable future. DS(CS)2 replied that the Administration was keeping a close watch on recruitment and retention problems and would take action where necessary. He said that, for instance, there had been difficulties to recruit junior police officers a few years ago. A review then took place and the Administration addressed the problem through measures such as adjusting the entry-point salary and introducing " omitted " salary points on promotion through the ranks. In a wider context, the Government approached the issue through other means such as bench-marking comparisons, effective training and performance appraisals etc to ensure that officers had a good chance of developing a career in the civil service. DS(CS)2 added that from time to time when circumstances justified, reviews on individual grades had been conducted. As the existing mechanism worked satisfactorily, the Administration saw no immediate need for another round of service-wide pay level survey to be carried out.

V.An outline on the management of the civil service
(PLC Paper No. CB(2) 181(01))

17.Secretary for Civil Service (Acting) (SCS(Atg)) briefed members on the paper, which gave an introduction on the major areas of responsibility of the CSB and the latest development on some of the issues at hand. SCS(Atg) said that in administering the civil service, great emphasis had been placed on maintaining a clean and efficient Government operating with a high level of transparency, credibility and accountability. This objective was achieved through management by consultation, proper conduct and discipline, staff training and development as well as an effective system of checks and balance for the monitoring of policy implementation.

18.Mrs Selina CHOW enquired whether the Court of Appeal judgment handed down in November 1996 on the appeal by the Association of Expatriate Civil Servants would have altered the course of implementation of the policy on localization of the civil service. SCS(Atg) replied that despite certain aspects regarding the implementation of the policy had been ruled to be unlawful, the Court had held that the localization policy itself was lawful. The Government had undertaken remedial steps to give effect to the Court judgment. For example, for those former overseas agreement officers who had been demoted and suffered restriction from promotion, the Administration had sought approval from the former Legislative Council in June 1997 to make compensation for the loss of salary as a result of the demotions. A number of supernumerary posts had been created in the departments and filled by the demotees. The Administration was currently consulting the various civil service associations on the mechanism and arrangements concerning applications from both local officers serving on agreement terms and overseas transferees for transfer to permanent and pensionable (P&P) terms. As regards the policy to develop a bilingual civil service, SCS(Atg) advised that an appointment requirement had been introduced since August 1995 requiring all local recruits appointed on P&P terms to be proficient in both Chinese and English.

19.In response to the Chairman's questions, SCS(Atg) said that in accordance with the Basic Law, new recruits appointed to the civil service on or after 1 July 1997 must be permanent residents (PRs) of the Hong Kong Special Administrative Region. Heads of Department who found it necessary to appoint non-PRs must first seek approval from the CSB. A valid example was the appointment of non-PRs to fill the post of Air Traffic Controllers because of the difficulty to recruit suitable officers locally. Consideration was being given to appoint occupational safety and health experts who were not PRs for the same reason. The PR requirement also applied to overseas agreement officers applying for transfer to local agreement terms. SCS(Atg) advised that CSB had not maintained statistics on serving civil servants who were not PRs of Hong Kong.

20.In response to Mr Andrew WONG's question, SCS(Atg) said that the Administration had no intention to find out how overseas agreement officers got their PR status. She clarified that overseas agreement officers had to become PRs before they could apply for transfer to local terms.

21.Mrs Selina CHOW said that training to improve civil servants' attitude and manner while serving the public should be enhanced. DS(CS)1(Atg) said that one of the major components of civil service training programmes was the inculcation of a customer service culture. The various government departments and the Civil Service Training and Development Institute were working actively to achieve the target. As at 1996, appropriate training programmes had been offered to about 35 800 officers, a large part of whom were front-line staff with duties involving frequent contact with the public.

22.Mrs Selina CHOW pointed out that government departments had at times been criticized for being too bureaucratic, or over-cautious, in acceding to requests for information to which the public had the right of access. The Administration responded that there were guidelines advising civil servants on the proper ways to deal with such requests. SCS(Atg) said that there were certain rules which needed to be observed, including the requirements under the Personal Data (Privacy) Ordinance. In addition, departments were reminded that members of the public should be duly advised of the reasons in case the information being sought could not be released. SCS(Atg) noted Mrs CHOW's review to strengthen staff training in this area.

23.Concerning conduct and discipline in the civil service, the Administration agreed to provide figures on the number of disciplinary cases in the past three years for members' information.	Adm

VI.Personal safety of civil servants while on duty
(PLC Paper No. CB(2) 321(04))

24.DS(CS)1(Atg) briefed members on the measures in place to promote safety and health at work in the civil service. These included discussions at departmental consultation committees, seminars, talks, exhibitions and training courses on safety and health matters. Guidelines were also issued to remind departments to enhance departmental safety policy and procedures having regard to specific work culture and environment. In April 1996, the CSB formed a working group to examine issues of occupational safety and health which had a service-wide impact. This working group, which comprised representatives from the staff side of the four civil service consultative councils, the Occupational Safety and Health Council and a number of departments, would recommend to the Secretary for the Civil Service measures for promoting safety awareness and action by management and staff at departmental level.

25.Members referred to the recent mass protest by Land Executives consequent to the incidents of two Land Executives being assaulted and seriously injured, and enquired what action had been taken by the Government. DS(CS)2 informed members that police investigation into the incidents were underway. In the meantime, the Administration was providing the necessary support to the injured officers and their families including counselling and assistance to claim compensation under the various compensation schemes. In one of the cases, the injured officer was attacked within the Government building compound during lunch time. Whether the officer was entitled to the statutory benefits provided under the Employees' Compensation Ordinance would depend upon the outcome of the investigation to determine whether or not the injury arose out of and in the course of employment. Meanwhile, the Government was taking the case forward on the assumption that the injury was duty related. 26.DS(CS)2 added that the Lands Department was reviewing the circumstances and examining ways to improve the department's mode of operation. A number of measures would be implemented, such as securing additional equipment for the safety of officers while undertaking duties in exposed situations and improving work practices by arranging outside work to be performed jointly by more than one officer in certain potentially dangerous locations. The Administration said that as the nature of work and working environments of civil servants were quite diverse, departmental management and staff were given the important role of formulating internal guidelines and procedures to promote and protect personal safety for staff while on duty. The Administration emphasized that similar assault cases were not frequent. But when such cases did happen, every effort would be taken to minimise the chance of a recurrence.

27.Mr CHAN Wing-chan suggested that consideration should be given to increasing the number of Land Executives. The Administration advised that such proposal would be covered in the review by the Lands Department. The Department was aware that there were delays in handling various applications received by the Department, and it was necessary to take immediate steps to speed up processing procedures. 28.Some members opined that the recent assault incidents might be taken as a reflection of public dissatisfaction with specific government policies. The Administration said that government policies and their implementation were closely under review. It was necessary to maintain an efficient Government with the wider interest of the community in mind. There were effective and legitimate complaint channels through which anyone aggrieved by the Government's decision could air their grievances and seek redress for maladministration where appropriate. The Administration stressed that it deplored such attacks on its staff and that there could be no justification to resort to violence under any circumstances.

VII.Any other businessGratuity payment for technical staff of the Electrical and Mechanical Services Department (EMSD)
29.Mr LEE Kai-ming informed members that the EMSD, with the operation of a Trading Fund, had offered agreement term employment to a number of technical grade staff in the department. Yet, in contrary to the normal appointment of agreement officers in the civil service and public bodies which provided for a gratuity payment on completion of an agreement at the rate of 25% of the total salary drawn during the agreement period, the rate of gratuity for those staff of EMSD was only 15%. Mr LEE enquired of the rationale for such difference. DS(CS)2 replied that the rate of gratuity varied between posts, ranging between 15% to 25% of the total salary. Gratuity was normally set at its approximate pension on-cost value, i.e. the extra cost in terms of pension payable if the officer concerned was employed as a P&P officer. The on-cost value would be higher for senior officers than that for junior officers. DS(CS)2 said that individual departments could exercise flexibility in fixing the appropriate level of gratuity, taken into account factors such as recruitment and retention problems. He proposed that the issue pertaining to the EMSD could be perused further at another meeting of the Panel.

30.The Chairman requested the Administration to provide more information regarding the rates of gratuity payable to different categories of officers appointed on agreement terms.	Adm

VIII.Close of meeting

31.The meeting ended at 12:55 pm.

Provisional Legislative Council Secretariat
4 November 1997