Provisional Legislative Council

PLC Paper No. CB(2) 1390
(These minutes have been seen
by the Administration)

Ref : CB2/PL/PS/1


Provisional Legislative Council
Panel on Public Service

Minutes of Meeting held on Monday, 23 February 1998 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 CHAN Wing-chan
Hon Andrew WONG Wang-fat, JP
Hon Ambrose LAU Hon-chuen, JP

Members absent :

Hon David CHU Yu-lin ]
Hon Mrs Selina CHOW, JP]
Hon Ronald ARCULLI, JP] other commitments
Dr Hon Philip WONG Yu-hong ]
Hon CHENG Yiu-tong]

Public officers attending :

Mr W K LAM
Secretary for the Civil Service

Mr D W PESCOD
Deputy Secretary (Civil Service)2

Ms Anissa WONG
Deputy Secretary (Civil Service) 3

Mr TSANG Yam-pui
Deputy Commissioner of Police (Management)

Mr Raymond WONG
Deputy Secretary for Security

Clerk in attendance :

Mrs Sharon TONG
Chief Assistant Secretary (2)1

Staff in attendance :

Mr Paul WOO
Senior Assistant Secretary (2)5

I.Date of next meeting and items for discussion

1. The next regular meeting would be held on Monday, 23 March 1998 to discuss the following items -

  1. Draft Report of the Panel on Public Service for submission to the Provisional Legislative Council;

  2. Update on the use of Chinese in the civil service;

  3. Review of qualification benchmarks system; and

  4. Conclusions on review of the system for declaration of interests by civil servants

II.Pay review for police officers
(PLC Paper No. CB(2) 1058(01))

2. Deputy Secretary (Civil Service) 2 (DS(CS)2) briefed members on the proposal set out in the PLC Paper to adjust Junior Police Officers’ (JPOs) pay scale following a recent Consultancy study on JPOs’ claim for a pay review on the ground that their duties had become more complex since the last pay review in 1992. DS(CS)2 advised that the Consultant was of the view that although the scope and complexity of the JPOs’ role had increased, the increase in itself was insufficient to warrant a full-scale pay review. The Consultant also took into consideration the JPOs’ previous requests for a pay review based on a comparison of their pay scale with that of the Hawker Control Force (HCO), and reaffirmed the Administration's position that such a comparison was inappropriate due to the difference in job nature between a disciplined service and a non-disciplined service grade. The Consultant nevertheless found that the increase in JPOs’ duties and responsibilities over the past years merited recognition. Having considered all the circumstances including the consultant's recommendations to adjust the pay scale of JPOs, the Administration had concluded that the maximum salary points of the Police Constable, Sergeant and Station Sergeant should be increased by one point. The Administration considered this adjustment to be fair and appropriate, given the fact that the impact of the increased responsibilities had fallen mostly on the more experienced officers. Although not all JPOs would get an immediate pay award, the proposed adjustment would eventually benefit the majority of officers in the JPO ranks.

3. In response to members’ enquiries, Deputy Commissioner of Police (DCP) informed members that the legislative changes which had taken place in recent years, such as the enactment of the Bill of Rights Ordinance and the Public Order Ordinance as well as changes made to other ordinances having human rights implications, had brought about significant increases in the level and complexity of the JPO's duties. These included, among other things, positive response to service quality improvements and changes in procedures in carrying out investigative and policing practices to meet the requirements of human rights legislation. As a means to cope with the rapid changes, measures to introduce the use of new technology within the Police Force were adopted, such as intensive use of computers and constant upgrading of high-technology equipment for combating crimes and maintaining public order. Advanced training was also provided to improve the level of skills and knowledge of police officers to enable them to fulfil their enhanced roles effectively.

4. On matters of service commitments, DCP said that there had been a healthy change in the management culture within the Force to promote initiatives to provide a quality service to the public and improve transparency and accountability. He said that improved services were achieved together with increased efficiency. By promoting the concept of value for money and taking the necessary measures to implement it, significant efficiency savings had been identified. These included reductions in departmental recurrent expenditures, reduced overtime payments made possible through improved shift arrangements, as well as savings through streamlining the organizational structure of Police operational units and formations. DCP pointed out that these internal efficiency savings had made it possible for the Police to absorb part of the increased workload without seeking additional resources from the Central Government.

5. At the request of Mrs Elsie TU, the Administration undertook to provide statistics in recent years on the number of police officers injured in demonstrations and the number of firemen injured on duty respectively. Adm

6. Members noted that officers in other disciplined services were likely to submit similar requests for pay scale reviews. Members opined that as other disciplined services also faced changes in terms of increased responsibilities, it would be fair for the Administration to look at their pay scale structures as well. DS(CS)2 replied that there were bound to be changes in all services and grades. Changes in one particular grade which prompted a review did not necessarily extend the same review to other grades. Each case had to be examined in its merits. The Administration was of the view that individual departmental managements were in the best position to assess whether there were changes over time that justified taking forward a formal pay review, and they could make recommendations to the Government in that regard. DS(CS)2 said that there were well-established mechanisms which allowed this to be done. He added that any submissions made to the Government would be dealt with in an equitable and objective manner. As regards the other disciplined services, DS(CS)2 advised that the Administration had yet to receive submissions from the departmental managements concerned in support of an independent consultancy study on the respective pay scales. Previous demands from the staff side of the disciplined services which called for a pay review on the basis of a comparison with the HCO grade were turned down by the Standing Committee on Disciplined Services Salaries and Conditions of Service (SCDS) as unjustified. DS(CS)2 said that although it was a matter for the staff to decide whether to make a submission on their own, clearly there might be a stronger case if both staff and departmental management were working in tandum in formulating a request. He said that depending on the circumstances of the case, a consultancy study was only one of the options available to the Administration to conduct pay review exercises.

7. In reply to the Chairman's question, DS(CS)2 said that subject to justifiable grounds, the SCDS might carry out independent pay reviews as initiated by the staff, the departmental management or the Civil Service Bureau (CSB). It could also conduct reviews which had pay implications as called for by the circumstances, such as where serious recruitment or retention problems existed for specific grades affecting the performance of the departments concerned, or where there was a long-standing dispute over the qualifications required for particular grades/ranks, or where legislative changes resulted in a requirement of a different set of standard of qualifications for a particular grade etc. For other issues which had service-wide implications, such as the qualification benchmarks system, reviews would be initiated and conducted by the CSB.

III.Interest rates on Government loans for civil servants
(PLC Paper No. CB(2) 1058(02))

8. DS(CS)2 explained the mechanism for fixing the interest rates charged on the various types of Government loans to civil servants. He said that in the past few months, interest rates on Government loans had increased significantly as a result of the turmoil in the Asian money markets in late 1997. Government interest rates, which were based on the yields of the Hong Kong Monetary Exchange Fund Bills/Notes, had leapt from 6.075% per annum in November to 7.955% in December 1997 and further to 9.475% in January 1998, narrowing the gap with the bank prime rate from about 3% to less than 1%. The increases had led to widespread demands for redress from civil servants. In view of these developments, the Administration had reconvened the interdepartmental working group to review the existing mechanism.

9. DS(CS)2 advised that under the principle of "no gain no loss" to the Government, the Administration aimed to set an interest rate on Government loans which was reasonably below the mortgage interest rate available to civil servants in the market. He said that in line with the Financial Secretary's Budget announcement relating to new arrangements for setting the return rate for the fiscal reserve, a new interest rate mechanism on Government loans would be in place with effect from 1 April 1998. It was anticipated that the interest rate would drop by more than 2% below the current rate, coming down more towards the usual level of about 6% . In the meantime, as the Government was obliged to stay with the existing mechanism, the interest rate was likely to go up again to 10.65% on 1 March 1998. DS(CS)2 advised that the new arrangements to be introduced in April 1998 would provide greater stability to the interest rate, as it would then be adjusted once every six months instead of each month.

10. In response to the Chairman's enquiries, DS(CS)2 said that the Government normally announced interest rate changes at least two weeks before such changes took place. In the event of a change in interest rate, civil servants were given the option to either adjust the amount of monthly repayments and leave the repayment period unchanged, or to alter the repayment period and leave the amount of monthly repayments unchanged. The flexibility was necessary to help civil servants adapt to the changes to suit their personal needs. DS(CS)2 pointed out that a number of factors might affect civil servants in making their decisions, such as the number of years the civil servant would remain in service etc. At the request of the Chairman, DS(CS)2 agreed to provide information on how civil servants made use of the adaptation measures in response to interest rate changes. Adm

11. Mrs Elsie TU said that taxpayers might be concerned that they had to subsidize civil servants for the interest rate concession in respect of Government loans. DS(CS)2 replied that the matter should be viewed in the context of contractual entitlements of civil servants, guided by the principle of "no gain no loss" to the Government. A substantial part of Government loans were related to civil service home ownership schemes which had the effect of reducing the costs of provision of housing benefits to civil servants in the long-run. Such schemes also contributed to fulfilling the Chief Executive's policy commitment to encourage home ownership in the territory. In addition, the Government interest rate only represented a partial cost to civil servants who were also subject to the market mortgage rates in acquiring home ownership.

IV.Mechanism to deal with misconduct by civil servants
(PLC Paper No. CB(2) 1058(03))

12. Deputy Secretary (Civil Service)3 (DS(CS)3) highlighted the overall situation of cases of misconduct committed by civil servants, the mechanism for dealing with these cases and the measures to promote good conduct in the civil service.

13. DS(CS)3 pointed out that most of the misconduct cases were related to unauthorized absence from duty, unauthorized paid outside work, breach of departmental instructions/orders and charges of criminal offences. On corruption-related matters, DS(CS)3 said that the Independent Commission Against Corruption (ICAC) would examine each complaint case it received, conduct investigation and initiate prosecution provided the case was substantiated. If there was insufficient evidence to merit legal action, the case would be referred to the relevant departments for follow-up action.

14. In response to members‘ enquiries about the low prosecution and conviction rates in respect of corruption-related complaints, DS(CS)3 said that a case had to be established with sufficient evidence before prosecution could be contemplated. Many complaints received were without sufficient information to permit investigation to be taken. A lot of cases, in addition, were not related to corruption on which prosecution could be instituted under the Prevention of Bribery Ordinance. DS(CS)3 clarified that the statistics listed in Annex 2 of PLC Paper No. CB(2) 1058(03) referred to complaints against civil servants reported to and handled by ICAC, and such cases included anonymous or unsubstantiated complaints.

15. The Chairman enquired about the measures in place to assist civil servants to overcome short-term financial difficulties. DS(CS)3 replied that there were various authorized sources of loans available, both inside the Government and from approved financial institutions in the private sector. In special circumstances, civil servants could obtain emergency financial relief by way of advance of salary or loans through departmental welfare funds. She said that it was stressed upon the civil servants that good conduct and integrity had to be maintained and loans taken out from unapproved sources were strictly prohibited. The Chairman asked if there was information on present situation of civil servants seeking loans or other financial assistance from both within and outside Government. DS(CS)3 said such details might not be readily available but agreed to explore if there was indicative information in this relation. Adm

16. In reply to a further question by the Chairman, DS(CS)3 advised that guidelines and rules were circulated quarterly/half yearly (with additional reminders before Christmas and Chinese New Year) to remind civil servants of the serious consequences of taking bribes or accepting gifts and entertainment without permission. In parallel with the issuing of clear guidelines and directives, departmental managements were actively promoting the importance of leading a healthy life-style among civil servants with a view to minimizing the chance of them engaging in corruptive practices or acts that would endanger the reputation of the Government. In addition, Heads of Departments regularly reviewed departmental procedures to strengthen supervisory accountability and avoid recurrence of common misconduct cases.

17. Referring to cases where the advice of the Public Service Commission (PSC) was sought on the recommended punishment in respect of misconduct by permanent officers, Secretary for the Civil Service informed members that PSC only covered civilian officers who were confirmed to permanent establishment but did not cover those officers in the disciplined services whose disciplinary procedures were dealt with in separate legislation.

18. In response to Mr LEE Kai-ming's enquiry, DS(CS)3 said that records of informal disciplinary action for minor offences, such as verbal and written warnings, would be kept for one year and then destroyed, provided there was no repeat of offence by the civil servants. Cases of repeated offence would be dealt with by formal disciplinary action.

19. Noting that disciplinary punishment included financial penalty, Mr LEE Kai-ming enquired how the amount of financial penalty was determined in different case scenarios. DS(CS)3 replied that financial penalty was imposed in the form of a fine, stoppage or deferment of increment or reduction in salary where the offence had resulted in financial loss to the Government or financial gain to the officer, e.g. fraudulent claims. In determining the level of fine, the Administration would recover the amount involved and where necessary and appropriate, impose a financial penalty to reflect the gravity of the offence. In cases where civil servants had by their action brought the civil service into disrepute, financial penalty was rarely applied.

20. Mr LEE Kai-ming opined that there must be fair and objective yardsticks for imposition of financial penalty. DS(CS)3 undertook to provide information on some cases handled in the past to illustrate how the present mechanism actually operated. Adm

V.Close of meeting

21. The meeting ended at 12:10 pm.


Provisional Legislative Council Secretariat
30 March 1998