Panel on Public Service (Minutes) 17 May 99

Legislative Council

LC Paper No. CB(1) 72/99-00
(These minutes have been seen by the Administration)

Ref : CB1/PL/PS/1

Legislative Council Panel on Public Service

Minutes of meeting held on Monday, 17 May 1999 at 10:45 am in Conference Room A of the Legislative Council Building

Members present :

Hon TAM Yiu-chung, JP (Chairman)
Hon Mrs Sophie LEUNG LAU Yau-fun, JP (Deputy Chairman)
Hon LEE Cheuk-yan
Hon LEE Kai-ming, JP
Hon CHEUNG Man-kwong
Hon CHAN Kwok-keung
Hon CHAN Wing-chan
Hon Andrew WONG Wang-fat, JP
Hon Howard YOUNG, JP
Hon Ambrose LAU Hon-chuen, JP

Public officers attending:

For items III to VI
Mr LAM Woon-kwong: Secretary for the Civil Service
Ms Anissa WONG: Deputy Secretary for Civil Service 1
Mr D W PESCOD: Deputy Secretary for Civil Service 2
Mrs Susan MAK: Deputy Secretary for Civil Service 3
For item V
Mrs Marion LAI: Deputy Director of Social Welfare (Administration)

Clerk in attendance :

Miss Salumi CHAN: Chief Assistant Secretary (1)5

Staff in attendance :

Mr Matthew LOO: Senior Assistant Secretary (1)7

I. Matters arising

The Chairman advised that as proposed by some members at the special meeting on 29 April 1999, another special meeting had been scheduled for 31 May 1999 to meet academics on the "Consultation Document on Civil Service Reform". Non-Panel Members would be invited to the meeting.

II. Date of next meeting and items for discussion
(LC Paper No. CB(1) 1290/98-99(01) -- List of outstanding items for discussion LC Paper No. CB(1) 1290/98-99(02) -- List of follow-up actions)

Regular meeting for June 1999

2. The Panel decided to discuss with the Administration on the "Consultation Document on Civil Service Reform" at its next regular meeting on 21 June 1999, following its meetings with civil service unions and academics on the same subject.

3. The Chairman reminded members that in accordance with Rule 77(14) of the Rules of Procedure, the Panel should make at least one report to the Legislative Council for each session. The Panel agreed to consider, at its next regular meeting, the draft report to be presented to the Council on 7 July 1999.

Regular meeting for July 1999

4. The Panel noted the list of outstanding items for discussion and agreed that the Administration be invited to brief the Panel, at its regular meeting on 19 July 1999, on the result of the consultation exercise on Civil Service Reform, 1999 Civil Service Pay Adjustment, and the result of the Starting Salaries Review of the civil service. (Post-meeting note : At the request of the Administration and with the concurrence of the Panel Chairman:

the Panel was briefed on the result of the consultation exercise on Civil Service Reform and the 1999 Civil Service Pay Adjustment at the meeting on 21 June 1999;
the Panel was briefed on the result of the Starting Salaries Review at the meeting on 22 July 1999; and
the meeting on 19 July 1999 was rescheduled to 22 July 1999.)

Other outstanding items

5. The Panel also agreed to discuss the remaining outstanding item, "Consultative machinery in the Civil Service", at a later stage. As proposed by Hon LEE Cheuk-yan and Hon LEE Kai-ming, the Panel agreed to invite civil service unions to give views on the subject in due course.

III. Prevention of double housing benefits for civil servants and staff employed in publicly funded organizations
(LC Paper No. CB(2) 1638/98-99(01) -- Paper from the Administration)

6. Mr CHEUNG Man-kwong noted that the prevention of double housing benefits rules (DBR) were enforced by the Administration basically by way of requiring the officers concerned to report any subsequent changes of information contained in their applications, and by conducting surprise inspections on their accommodation. Mr CHEUNG suggested the Administration to consider adopting more effective measures, such as by establishing a computer network between the relevant government departments, and between the departments and publicly funded organizations so as to check whether any officer and his spouse were receiving double housing benefits. Deputy Secretary for Civil Service 2 (DSCS2) responded that within the civil service, the Civil Service Bureau (CSB) would verify the information provided by an applicant with the Housing Department (HD) to ensure that he and his spouse were not receiving public housing benefits. Arrangements had been made for CSB to gain access to the relevant records of HD. As regards publicly funded organizations which were independent of the Government, the Administration did not have the authority to gain access to the records of their staff. Nonetheless, these organizations had always been co-operative in providing the relevant information upon request by the Administration. Mr CHEUNG was of the view that these organizations would not object to his suggestion of establishing a computer network, subject to the privacy of their staff being protected. At Mr CHEUNG's request, DSCS2 agreed to look into the practicability of his suggestion.

7. Mr LEE Cheuk-yan asked how the Administration enforced the DBR in cases where private employers were involved. DSCS2 advised that normally, the Administration would contact the private companies concerned and see if housing benefits were provided to their staff. Formal arrangements had been made with some large companies, but it was more difficult to obtain the relevant information from the small ones. Mr Howard YOUNG pointed out that housing benefits offered by private companies might be in various forms. DSCS2 shared this view and said that some forms of housing benefits were identifiable while some were not. The Administration relied on the integrity of officers to report any changes of their circumstances and surprise inspections conducted by the Administration did pick up some unreported changes.

8. Responding to Mr LEE Kai-ming, DSCS2 advised that where necessary, verification of information provided by applicants would be carried out. However, it would not be necessary to do so if an applicant was single or his spouse was unemployed.

9. In response to some members, DSCS2 advised that the relevant CSB Circular Memorandum had been circulated regularly to remind officers of the DBR and the consequences of non-compliance. At the request of Mr LEE Cheuk-yan, DSCS2 undertook to provide the number of cases of non-compliance in the past three years and the level of punishment awarded to the officer(s) concerned in each case.

(Post-meeting note : The English and Chinese versions of the information provided by the Administration after the meeting were circulated to members vide LC Paper Nos. CB(1) 1535/98-99 and CB(1) 1558/98-99 respectively.)

10. Responding to Mr CHAN Wing-chan, DSCS2 advised that an officer who had failed to comply with the DBR and was disqualified from all forms of housing benefits would not be entitled to housing benefits again. However, in some cases, the Administration might apply punishment less serve than disqualification, having regard to the circumstances of the cases.

11. In response to Mr Howard YOUNG's enquiry, DSCS2 advised that there were time elements in the various housing benefits schemes. For example, an officer who had left the Home Financing Scheme could re-join the scheme within six months. Otherwise, he would lose his remaining entitlement to the scheme. The underlying rationale was to allow the Administration to cap its liability within the 10-year time frame.

12. At the request of Mr CHAN Kwok-keung, DSCS2 undertook to provide a breakdown showing the number of officers receiving each type of the civil service housing benefits for members' reference.

13. Responding to Mr Andrew WONG, DSCS2 confirmed that since 1997, staff of Hospital Authority had also been subject to the DBR. Mr WONG also enquired whether civil servants occupying official residence or departmental quarters were entitled to other forms of housing benefits. DSCS2 explained that official residence was a category of accommodation linked to a particular office and the officer concerned was entitled to housing benefits. For some of the posts in the disciplined services and other departments, the post holders were required to live in operational quarters. As the officers concerned had no choice in the matter, therefore, the DBR would not apply to them. However, the DBR would apply to officers occupying other departmental quarters.

14. Mr Andrew WONG asked whether the Chief Secretary for Administration occupying official residence was entitled to housing benefits. DSCS2 considered it inappropriate for him to comment on individual cases.

15. The Chairman and Deputy Chairman highlighted members' concern that the Administration should adopt more effective measures to enforce the DBR, particularly in cases where the spouses of the officers concerned were working in publicly funded or private organizations. DSCS2 shared members' concern that the DBR should be strictly enforced. He undertook to take members' views into consideration on how the situation could be improved.

IV. Provision of various job-related and non job-related allowances in the civil service (LC Paper No. CB(1) 1290/98-99(03) -- Paper from the Administration)

16. Mr CHEUNG Man-kwong noted that a great variety of allowances was currently payable to civil servants. He queried the justifications for some of the allowances, for example, On-call Duty Allowance and Typhoon Allowance. Mr CHEUNG considered that these two types of allowances could be abolished if the anticipated duties were included in the job descriptions for the officers concerned. He therefore urged for an overall review of the existing policy on the provision of allowances to civil servants. In response, DSCS2 pointed out that unlike the private sector where an individual officer could have a personal pay scale which was tailored to the particular nature of his job, most of the civil servants were paid in accordance with the Master Pay Scale. A range of allowances was therefore provided to compensate civil servants who were required for operational reasons to take up duties which were not normally expected of their particular grade or rank, and which had not been taken into account in the determination of the normal pay scale. Each of the allowances had been approved by the relevant advisory committees in previous years. A review was being conducted by the Administration to ensure that the various allowances remained appropriate under the current circumstances.

17. Responding to Mr LEE Kai-ming, Deputy Secretary for Civil Service 1 (DSCS1) advised that if an acting appointment lasted for longer than the specified qualifying period, the officer concerned would be granted an acting allowance in recognition of the additional duties and responsibilities shouldered by him. If the officer was appointed to act in a vacancy in a higher rank, the rate of acting allowance would be the difference in pay between the minimum of the acting office and the substantive pay of the officer concerned. If the officer was appointed to undertake temporarily the duties of another post in addition to his own, the rate of acting allowance would be one-sixth of the minimum pay of the acting office. DSCS1 further advised that the Administration was reviewing the rules for making acting appointments and paying acting allowance in consultation with departmental management. The consultation would be concluded by the end of May.

18. Mr LEE Cheuk-yan noted that as at 1 April 1999, there were a total of 85 officers posted to places outside Hong Kong and the expenditure on the allowances for these officers in 1998/1999 amounted to $45.8 million. At the request of Mr LEE, DSCS2 undertook to provide figures on the biggest and the smallest amounts of allowances granted to these officers in 1998/1999, and the rates of the Disturbance Grant and Special Posting Allowance payable to them.

19. Responding to Mr Howard YOUNG, DSCS2 confirmed that officers posted outside Hong Kong were not subject to overseas taxation.

20. Referring to the "1998-1999 Expenditure on Allowances by Categories" listed in the Annex to the paper provided by the Administration, Mr CHAN Wing-chan asked for a breakdown of the expenditure on each category of allowances granted to officers of the senior, middle and junior ranks. DSCS2 undertook to see if the requested information was available.

21. Mr CHAN Wing-chan noted that police officers who were required to take up driving duties were granted Extra Duties Allowance. He sought clarification on the rationale behind this arrangement and asked for an example of Hardship Allowance. DSCS2 advised that a police officer who provided services by driving, which was not part of his duties, would be eligible for Extra Duties Allowance. As regards Hardship Allowance, DSCS2 gave an example of engineering officers who were required to dive into water to inspect the foundation of piers. As it was an offensive and dangerous duty which was not inherent in the normal work of their grade, the officers concerned would be eligible for Hardship Allowance.

22. The Deputy Chairman considered that the provision of a great variety of allowances might undermine the sense of responsibility of civil servants. She therefore urged the Administration to review the principle governing the provision of allowances.

23. The Chairman pointed out that allowances were granted to officers who had taken up extra or unusual duties. He suggested the Administration to, in conducting the review on allowances, take members' views into consideration and consult the civil service unions. At the Chairman's request, DSCS2 undertook to report the outcome of the review to the Panel in due course.

V. Employment of non-civil service contract staff at 70% of basic salary by the Social Welfare Department

24. The Panel noted the following papers:

Paper from the Administration for this meeting (LC Paper No. CB(1) 1290/98-99(04));
Letters from three deputations to the Complaints Division of the Secretariat (LC Paper Nos. CB(1) 1290/98-99(05), (06) and (07));
Letters from the Administration to the Complaints Division of the Secretariat (LC Paper Nos. CB(1) 1290/98-99(08) and (09));
Extract from the minutes of the Panel meeting on 18 January 1999 (Extract from LC Paper No. CB(2) 1466/98-99);
Supplementary information provided by the Administration after the special meeting of Finance Committee on 16 April 1999 (LC Paper No. FC 140/98-99); and
Paper from the Administration for the Finance Committee meeting on 7 May 1999 (Paper No. FCR(1999-2000)11).

25. Members queried the justifications for the Administration to introduce non-civil service contract terms, and the Social Welfare Department's decision to employ non-civil service contract staff at 70% of the entry salary of comparable civil service ranks.

26. Mr LEE Cheuk-yan considered it inappropriate for the Administration to introduce the non-civil service contract terms for employing staff at non-directorate level. He noted from the paper provided by the Administration that non-civil service contract staff were distinct from civil servants in that they were not appointed to posts on the civil service establishment and were not remunerated on civil service pay and conditions. He pointed out that the non-civil service contract staff, though not appointed to the civil service establishment, were in fact required to perform the same duties as the civil servants of comparable ranks, yet remunerated on less favourable pay and conditions. Mr LEE Kai-ming, Mr CHEUNG Man-kwong, Mr CHAN Wing-chan and Mr Andrew WONG held the same view. They were concerned that this would create unfairness in the civil service.

27. SCS advised that during the recruitment freeze, departments might meet their additional or new service demands through other means that would not increase the civil service establishment. One of the means was to employ staff outside the civil service establishment on short term contracts. In this connection, the Administration had issued a circular providing guidelines to Heads of Department/Grade on the employment of non-civil service contract staff. It was clearly stated in the circular that non-civil service contract staff would not occupy posts on the establishment of the departments in which they were working. SCS quoted an example in which a department needed to recruit an officer for carrying out duties relating to human resource management, one of the major categories of duties of the Executive Officer (EO) grade. The department might recruit a Human Resource Officer (HRO) on non-civil service contract terms, instead of an EO on permanent and pensionable terms. Nevertheless, SCS added that Heads of Department might apply to the Civil Service Bureau and Finance Bureau for exemption if they had a genuine need to recruit staff to fill posts on the civil service establishment.

28. Mr LEE Cheuk-yan pointed out that in the example quoted by SCS, the HRO was only required to take up part but not all of the duties of an EO. In response to Mr LEE's enquiry, Deputy Director of Social Welfare (Administration) (DDSW(A)) advised that basically, the 324 non-directorate staff recruited/to be recruited by SWD on non-civil service contract terms were/would be required to perform more or less the same duties as the civil servants of comparable ranks. In view of their job duties being non-confidential and the fact that there was no need to retain the 324 posts on a long term basis, it was not justified for SWD to apply for exemption from the recruitment freeze. Mr LEE was not satisfied with the reply and sought clarification from SCS on whether it was more appropriate for SWD to recruit the staff concerned to fill posts on the civil service establishment. SCS reiterated that CSB had provided guidelines for the departments to follow and that there was no evidence showing that SWD had acted in contravention of the guidelines.

29. Mr LEE Kai-ming and Mr CHAN Wing-chan noted that the 324 non-civil service contract staff were recruited by SWD at market rates. They queried the basis on which the market rates, being equivalent to 70% of the entry salary of comparable civil service ranks, had been arrived at. DDSW(A) explained that in determining the market rates, SWD had made reference to the level of pay offered by private organizations in recruiting staff to fill posts with the same entry requirements. She also emphasized that the entry pay for the non-civil service contract staff concerned were set at market rates to ensure that public money was used in a cost-effective manner. It was nevertheless only a temporary measure during the recruitment freeze. SCS added that this measure was introduced in response to the views of the various sectors of the community that the Administration should be flexible in staff recruitment, such as by employing staff at market rates to meet short term operational needs. Members were however not satisfied with the Administration's response and considered that in the absence of scientific justifications, it was not clear as to how the "70%" had been arrived at.

30. At the request of Mr CHAN Wing-chan, SCS undertook to provide the number of cases, in the past three years, of employment of non-civil service contract staff at a starting salary below that of the comparable rank in the civil service, and the departments involved.

(Post-meeting note : The information provided by the Administration after the meeting was circulated to members vide LC Paper No. CB(1)1931/98-99.)

31. Mr CHEUNG Man-kwong considered that if the new measure was introduced to allow the Administration flexibility in staff recruitment, the measure should not only be targeted at staff at non-directorate equivalent level. In this connection, Mr CHEUNG noted from the paper provided by the Administration for Agenda Item VI of the meeting that the Administration proposed to retain/create two directorate posts to cope with the Civil Service Reform exercise for 18 months/12 months with effect from 1 July 1999. As these two posts would only be required on a short-term basis, Mr CHEUNG queried why the Administration did not seek to recruit non-civil service contract staff at market rates to perform the required duties. SCS advised that as the duties envisaged to be undertaken were closely related to civil service management issues, it was considered necessary to fill the posts by civil servants. He reiterated that where the duties so required, Heads of Department might apply to CSB for exemption from the recruitment freeze. For example, the several disciplined services had applied for exemption. In view of the nature of duties of disciplined staff, the Administration's initial view was that the application merited further consideration.

VI. Briefing by the Administration on the proposed retention/creation of two supernumerary directorate posts for the Civil Service Reform exercise
(LC Paper No. CB(1) 1290/98-99(10) - Paper from the Administration)

32. DSCS2 briefed members on the Administration's proposal to retain one Administrative Officer Staff Grade "C" (AOSGC) post and create one Principal Executive Officer (PEO) post in CSB for 18 months and 12 months respectively. The two supernumerary directorate posts were retained/created to facilitate and implement the Civil Service Reform exercise. The proposal would be submitted to the Establishment Subcommittee on 19 May 1999 for recommendation to the Finance Committee for approval.

33. Mr CHEUNG Man-kwong reiterated his view at paragraph 31 above that the Administration should recruit non-civil service contract staff at market rates to perform the duties concerned. In response, DSCS1 and DSCS2 advised that it was inappropriate to do so as the two officers were required to maintain close contact with various departments and to meet business groups, consultants and academics on the Civil Service Reform. It was therefore essential that the two officers were familiar with the civil service system.

34. Mr CHEUNG Man-kwong and Mr LEE Cheuk-yan were not convinced by the Administration's explanation as the two posts were only required on a short-term basis. Mr LEE also considered that non-civil servants might also be familiar with the civil service system. DSCS2 however disagreed and pointed out that the civil service system was not easy to understand. If non-civil servants were employed to fill the two posts, considerable time might be required for them to familiarise with the system.

35. Mr Andrew WONG supported the Administration's proposal. He was however concerned whether 18 months would be sufficient for CSB to complete the Civil Service Reform exercise. In response, DSCS2 said that the schedule was tight but the Administration would seek Members' further approval for retaining the two posts for a longer period, if warranted.

36. At Mr Andrew WONG's request, the Administration undertook to provide information on:

whether the various posts in the Central Policy Unit were on the establishment of the civil service; and
whether a civil servant might be appointed to a non-civil service post in the Government and if so, what the status of the appointment was and whether the civil servant concerned was still entitled to the fringe benefits of the civil service.

VII. Any other business

37. There being no other business, the meeting ended at 1:00 pm.

Legislative Council Secretariat
8 October 1999

Legislative Council

Legislative Council Panel on Public Service Minutes of meeting held on Monday, 17 May 1999 at 10:45 am in Conference Room A of the Legislative Council Building

Legislative Council Panel on Public Service

Minutes of meeting held on Monday, 17 May 1999 at 10:45 am in Conference Room A of the Legislative Council Building