Provisional Legislative Council

PLC Paper No. CB(2) 1190
(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, 26 January 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 Ambrose LAU Hon-chuen, JP
Hon CHENG Yiu-tong

Members absent :

Hon David CHU Yu-lin]
Hon Mrs Selina CHOW, JP]
Hon Ronald ARCULLI, JP] other commitments
Hon Andrew WONG Wang-fat, JP]
Dr Hon Philip WONG Yu-hong]

Public officers attending :

Mr W K LAM
Secretary for the Civil Service

Ms Anissa WONG
Deputy Secretary (Civil Service)3

Item III

Mrs Carrie LAM
Deputy Secretary (Treasury)1

Item IV

Mr D W PESCOD
Deputy Secretary (Civil Service)2
Attendance by invitation :

Item V

Mr Gordon SIU
Head, Central Policy Unit

Item VI

Disciplined Services Consultative Council (Staff Side)

Mr WONG Wai-hung
Correctional Services Officers Association (Junior Section)

Mr WONG Shui-wing
Immigration Service Officers Association

Mr LEUNG Yiu-wah
Hong Kong Fire Services Department Ambulance Officers Association

Mr LAM Ching-shek
Association of Customs & Excise Service Officers

Mr WONG Chun-wai
Government Flying Service Aircraft Engineers Association
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

(PLC Paper No. CB(2) 913)

The minutes of the meeting held on 22 December 1997 were confirmed.1

II. Date of next meeting and items for discussion

2. The next regular meeting of the Panel would be held on Monday, 23 February 1998 to discuss the following items :

  1. pay review for police officers;

  2. interest rates on government loans for civil servants; and

  3. mechanism to deal with misconduct by civil servants.

III. Fringe benefits for staff of government-funded organizations and civil servants

(PLC Paper No. CB(2) 912(01) on "Fringe Benefits of Staff in Subvented Organizations")

3. Deputy Secretary (Treasury)1 (DS/Tsy1) briefed members on the PLC paper, which set out the policy governing the provision of fringe benefits of staff in non-Government organizations receiving government subventions to deliver a wide range of education, welfare and health services. She said that the subvention policy was that the terms and conditions of service of staff in the subvented sector should be no better than those provided by Government to comparable grades in the civil service. Subject to overall budgetary conditions and priority for resources, the Government was prepared to consider narrowing the gap between the fringe benefits of civil servants and those for the subvented sector staff. For example, the Mortgage Interest Subsidy Scheme (MISS) for employees in aided schools and subvented welfare and health organizations had benefited more than 4 500 employees since its implementation in September 1993.

4. In reply to members’ enquiries about the MISS, DS/Tsy1 said that the Scheme was expected to benefit at least 8 500 staff over a ten-year period, having regard to its financial implications. Under a quota system which would be set each year on the basis of the prevailing market mortgage interest rate, the setting of priorities of applications and the funds available, the MISS had been operating satisfactorily in achieving its targets. She said that all employees in aided schools and subvented welfare and health organizations, excluding the Hospital Authority, could be admitted to the Scheme, provided that the employee was at or above Point 22 on the Master Pay Scale and having at least ten years of service; or for those staff below MPS Point 22, with 20 years of service or more. In the event of the total applications exceeding the quota for a particular year, relative priorities would be decided on the basis of length of service. She added that the subsidy provided under the MISS was set at one-third of the mortgage interest payment, subject to a maximum interest rate ceiling at 12%.

5. Referring to the recent motion debate on taking out medical insurance for aided school teachers, the Chairman enquired about whether the proposed benefit, if implemented, would cover other organizations in the subvented welfare and health sector. DS/Tsy1 replied that any proposal to improve staff benefits in a particular sector must be considered in the context of fairness, comparability with other sectors and resource availability. The proposed medical benefits for aided school teachers would be considered in detail when the overall resource biddings from the various Policy Bureaux were examined in the Administration's forthcoming Resource Allocation Exercise.

6. Mrs Elsie TU was concerned about the public perception of the provision of fringe benefits for both civil servants and staff in the subvented sector. She asked whether the level of fringe benefits for civil servants could be reduced. Deputy Secretary (Civil Service)2 (DS(CS)2) replied that civil service benefits were under constant review to determine whether they were desirable under present day circumstances, and changes to such benefits had been introduced from time to time. Recent examples included the cessation of Overseas Education Allowance to newly recruited civil servants as well as changes made to the Leave Passage Allowance etc. He added that fringe benefits formed part of the remuneration package for civil servants and the Government being the employer must be conscious of its contractual obligations to its employees.

IV. Monitoring mechanism in creation of posts in the civil service

(PLC Paper No. CB(2) 912(02) on "Creation of posts in the civil service")

7. DS(CS)2 explained the control mechanism in place for the creation of posts in the civil service as detailed in the PLC Paper. He pointed out that the respective roles played by the Finance Committee/Establishment Subcommittee (FC/ESC), the Civil Service Bureau (CSB), the Controlling Officers and the departmental establishment committees and advisory bodies together provided the necessary checks and balances to ensure that additional posts, both at the directorate and other levels, were only created when functionally justified. The "establishment ceiling", which was the limit placed on the size of the non-directorate establishment and expressed in terms of the total notional annual midpoint salary value of all non-directorate posts in the permanent establishment, was another effective mechanism used to monitor the growth of the civil service as a whole.

8. The Chairman noted that there had been a marked increase in the number of proposals for creation of directorate posts submitted to the FC/ESC since the handover. Upon the Chairman's request, the Administration undertook to provide more up-to-date statistics on the number of newly created directorate and non-directorate posts during the period from 1 July 1997 to 31 December 1997, and the figure for the corresponding period in 1996. Adm

9. As regards increase in the total number of permanent posts, DS(CS)2 advised that the absolute rate varied between years. An important factor affecting the actual increase would be the undertaking of major development projects in the territory. He said that if one looked at periods of, say, five years, the rate of increase had been steady.

10. In response to Mr LEE Kai-ming's enquiry about creation of supernumerary posts to cover pre-retirement leave, DS(CS)2 explained that it was a system used to cover situations where it was necessary to accommodate a replacement officer when the officer on pre-retirement leave still effectively occupied a position in the civil service. As soon as the officer had exhausted all his leave and formally went on retirement, the supernumerary post lapsed. DS(CS)2 said that whether or not the replacement officer performing the duties of the retiring officer would eventually be promoted to the post was a separate issue and each case had to be dealt with on its own merits.

11. The Chairman enquired about the mechanism for creation of supernumerary directorate posts. DS(CS)2 said that Controlling Officers might, under authority delegated by the Financial Secretary, create supernumerary directorate posts, subject to CSB's approval and funds being available, for not more than six months for any purpose. The intention was to provide a flexibility for the Administration to be able to respond quickly and effectively to urgent, changing situations. Where there was a proposal to extend the original supernumerary creation beyond the initial six-month period or to convert it into a permanent post, FC's approval had to be sought. In such case, the test was whether the post in question was functionally justified as a permanent post or a supernumerary post.

12. At the Chairman's request, the Administration agreed to provide information on increase in departmental establishment ceilings approved by FC in 1997-98. Adm

V. Staffing proposal for the Central Policy Unit

(PLC Paper No. CB(2) 912(03) on "Work and Resources of the Central Policy Unit")

13. Head, Central Policy Unit (H/CPU) gave a presentation on the work of the CPU, in particular its enhanced role and scope of responsibilities after 1 July 1997, and explained the proposals for creation of posts within the CPU consequential to the expansion of the Unit's duties. The post creation proposals, which included the addition of ten posts (of which four were directorate posts), were for the purpose of :

  1. bringing the organization of the CPU in line with the existing situation;

  2. enhancing support for the increased level of research activities; and

  3. providing Secretariat support to the Commission on Strategic Development.

14. In response to members’ enquiries about the work of CPU on research and related activities, H/CPU advised that CPU conducted studies on subjects requested by its clients (namely, the Chief Executive, the Chief Secretary for Administration and the Financial Secretary). The non-civil service full-time members were tasked with leading specific, ad hoc projects assigned to them according to their expertise. The Unit also conducted studies on its own initiative particularly under extraordinary situations. During the recent bird flu crisis, for instance, the Unit acted expeditiously to collect information from all available sources with a view to helping the Government make decisions on measures to deal with the problem. H/CPU added that to increase the transparency of the research work and to seek the best advice available, CPU would be organizing more conferences and seminars for public participation. Such activities would be increased from three in 1997/98 to eight to ten in 1998/99. Rather than indulging in technically detailed studies, these conferences and workshops aimed at enhancing brainstorming and promoting experience and knowledge sharing among the participants.

15. Regarding support to the Commission on Strategic Development, H/CPU said that the Commission would look at Hong Kong's development in its macro context and initiate research studies. These studies would be of a more in-depth nature, focussing on important issues of concern of a longer-term horizon of up to 20 to 30 years into the future. They would examine and review the long-term planning scenarios and implications from all perspectives to ensure that the vitality of Hong Kong's economic development was maintained. Having regard to the outcome of these studies, the Commission would then make recommendations to the Government on possible strategies for development.

16. In reply to members’ enquiries, H/CPU said that where urgent action was called for by the circumstances, CPU would deploy resources within its means to undertake special tasks. However, as CPU would be working against tight schedules under such circumstances, it was not always possible for CPU to offer concrete solutions on highly scientific or technical issues. Normally, professional advice would be given by the responsible Bureaux/Departments.

17. H/CPU took note of members’ view that where events happened arousing wide public concern, CPU should help in providing the necessary guidance and advice to ensure that the community at large had the proper understanding of the issues involved.

18. Mr Ambrose LAU Hon-chuen expressed reservation about turning the post for Head, CPU into a civil service post, which might undermine the independence of the job. The Administration explained that when CPU was established in 1989, the post for Head, CPU was a non-civil service post with his remuneration package on negotiated terms. Since 4 August 1997, a Director of Bureau was appointed as Head, CPU. It was therefore necessary to create a Director of Bureau post to reflect the present situation. As CPU was operating within the Administration with no autonomy in finance matters, the proposed post creation involved a technical accounting arrangement for the redeployment of funds from an existing subhead to another subhead covering civil service salaries. The Director of Bureau post would be a supernumerary post for an initial period of three years to allow flexibility for the Government to review the situation at a later stage as to whether the CPU should continue to be headed by a civil servant. Secretary for the Civil Service (SCS) added that the independence or otherwise of the post was not related to whether the holder of the post was a civil servant. As in the past, H/CPU was accountable to the Chief Executive, the Chief Secretary for Administration and the Financial Secretary.

19. SCS said that CSB was satisfied of the need to provide four supernumerary directorate posts under the new organizational structure of CPU. It also considered that the grading and ranking of the posts were commensurate with the responsibilities.

20. The Chairman said that the purpose of discussion by the Panel was for the Administration to respond to members’ views on the work of CPU and its staffing proposals. He concluded that the Panel should not take a stand on whether the proposals should be supported, which was a matter for the FC/ESC.

VI. Mechanism for pay scale review of individual grades

(PLC Paper No. CB(2) 912(04) - submission of Disciplined Services Consultative Council (Staff Side);

PLC Paper No. CB(2) 912(05) - Administration's response to Disciplined Services Consultative Council (Staff Side)'s submission; and

PLC Paper No. CB(2) 934(01) on "Review of pay scales of individual grades" tabled at the meeting)

Meeting with representatives from Disciplined Services Consultative Council (Staff Side)

21. Representatives from Disciplined Services Consultative Council (Staff Side) (DSCC(Staff Side)) briefed members on their submission which set out the background and developments concerning DSCC (Staff Side)'s request for a pay review for the five disciplined services, comprising Correctional Services, Fire Services, Customs and Excise, Immigration and the Government Flying Service. They said that following the creation of the Hawker Control Officer (HCO) grade in 1993, which resulted in a considerable number of disciplined services staff transferring to the HCO grade, DSCC(Staff Side) together with the Junior Police Officers Association (JPOA) had been pressing the Administration to review their respective pay scales. Recently, JPOA's demand had been acceded to with the appointment of an independent Consultant to look into the JPOs’ request and the subsequent recommendation by the Consultant for an adjustment to the JPO pay scale. The claims of the five other disciplined services, however, were still neglected by the Administration. Representatives from DSCC(Staff Side) said that given that the adjustment to JPOs’ pay scale was based on changes in the duties and responsibilities of JPOs, the same rationale held for the case of the other disciplined services, whose scope of responsibilities, which virtually covered every aspect of public safety and welfare, had expanded significantly during the past few years. DSCC(Staff Side) wished to seek Provisional Legislative Council Members’ support for urging the Administration to conduct an independent consultancy pay review for the five disciplined services.

22. DS(CS)2 explained the policy on civil service pay and the means for establishing and reviewing pay scales of individual grades as highlighted in PLC Paper No. CB(2) 934(01). He said that where the Administration received proposals to review and adjust the pay scales of particular grades/ranks, which might be initiated by the staff, the departmental management or CSB, the matter would be examined first by CSB (with the aid of consultants as appropriate) in consultation with the Head of Grade and the affected staff concerned. If the proposal was supported, the relevant Advisory Committee would then be consulted (i.e. the Standing Commission on Civil Service Salaries and Conditions of Service; the Standing Committee on Disciplined Services Salaries and Conditions of Service; and the Standing Committee on Directorate Salaries and Conditions of Service respectively). The Advisory Committee as appropriate would carry out its independent assessment of the case for a review and submit its advice to the Chief Executive. After formal acceptance of the Advisory Committee's advice, a submission would be made to FC for approval.

23. In response to members’ enquiries about the DSCC(Staff Side)'s demand, the Administration advised that prior to 1997 the submissions made by JPOA and DSCC(Staff Side) for pay reviews were rejected by CSB and the Standing Committee on Disciplined Services Salaries and Conditions of Service (the Standing Committee) on the ground that it was not appropriate to compare their salary scales with that of the HCO grade, given the different job nature and requirements. The consultancy study on JPOs’ pay scale was conducted following a new submission put up by the Police Force management in July 1997, based on the changes in JPOs’ duties and without comparing with the HCO grade. Whether or not a consultancy study was an appropriate means to take forward any other request for pay review would be examined, having regard to the merits of the case. The Administration had not ruled out the possibility to engage a consultancy study on the pay scales of the disciplined services. However, the first step would be for CSB to look into the justifications put forward by the Staff Side for a review without any reference to the HCO grade.

24. In response, Mr WONG Wai-hung said that the request of DSCC(Staff Side) had been made clear in its previous submissions to the Administration and the Standing Committee since 1995. DSCC(Staff Side) was of the opinion that the grounds for a pay review held true for both the JPOs and staff of the other disciplined services. He said that it was unfair to require them, or the departmental management concerned, to make new submissions.

25. DS(CS)2 said that as the Police Force were on a different pay scale to other disciplined services, it was necessary to consider cases separately. He said that the Administration would deal with each case fairly and objectively under the established mechanisms to decide how best to respond.

26. The Chairman pointed out that when the matter of the establishment of the HCO grade was discussed, the Panel on Public Service of the then Legislative Council had queries about the HCO grade having more favourable terms and conditions then that for the basic ranks of the disciplines services, which gave rise to the demand of the disciplined services officers for a pay review. He said that as the Panel only dealt with general policy issues, it would not be appropriate for the Panel to make judgment on pay and conditions matters affecting specific grades/ranks. The Chairman opined that CSB should look further into the grievances of disciplined services staff. He called upon the Administration, the Staff Side and the departmental management to act jointly and positively, with the interests of the public in mind, to work out a mutually acceptable solution to the matter.

VII. Close of meeting

27. The meeting ended at 12:55 pm.


Provisional Legislative Council Secretariat
26 February 1998