LegCo Paper No. CB(2) 1952/95-96
(The minutes have been seen by the Administration)
Ref : CB2/PL/PS/1

LegCo Panel on Public Service

Minutes of Special Meeting held on Monday, 23 December 1996 at 10:45 am
in the Chamber of the Legislative Council Building

Members present :

    Hon IP Kwok-him(Chairman)
    Hon Michael HO Mun-ka
    Hon Emily LAU Wai-hing
    Hon CHAN Wing-chan
    Hon CHENG Yiu-tong
    Dr Hon LAW Cheung-kwok

Members absent :

    Hon LEE Kai-ming (Deputy Chairman)
    Hon Allen LEE Peng-fei, CBE, JP
    Hon Ronald ARCULLI, OBE, JP
    Hon CHEUNG Man-kwong
    Hon LEE Cheuk-yan
    Dr Hon Anthony CHEUNG Bing-leung
    Hon David CHU Yu-lin
    Hon Mrs Elizabeth WONG, CBE, ISO, JP

Public Officers attending :

Secretary for the Civil Service
Crown Solicitor
Deputy Secretary (Civil Service) 1 Atg.
Ms Bernadette LINN
Principal Assistant Secretary(Civil Service) (Appointment)
Special Duties
Mr Thomas CHAN
Assistant Secretary (Civil Service) Appointments

Clerk in attendance :

Mrs Sharon TONG
Chief Assistant Secretary (2)1

Staff in attendance :

Mr Paul WOO
Senior Assistant Secretary (2)5

I. Meeting with the Administration

(LegCo Paper No. CB(2) 787/96-97)

(LegCo Paper No. CB(2) 701/96-97(01) - Court of Appeal judgment)

Briefing by the Administration on the course of action pursuant to the recent Court of Appeal judgment in connection with various government measures to implement the localization policy in the civil service

Secretary for Civil Service (SCS) informed members that, subsequent to the last Panel meeting held on 18 December 1996 at which the matter of judicial review on the localization policy of the civil service was discussed, the Administration had decided not to appeal to the Privy Council against the Court of Appeal’s judgment. The main reasons for the Administration’s decision were as follows :

  1. With regard to the two main matters ruled unlawful, viz. the demotion scheme and promotion restriction on transferees, and restriction on transferees from further transferring to permanent and pensionable (P&P) terms, legal advice from the Attorney General’s Chambers and the counsels representing the Government throughout the court case as well as the independent counsel commissioned by the Senior Non-expatriate Officers Association suggested that there was no reasonable chance of success in a further appeal. The other matters involved were relatively minor in nature which would not have far-reaching implications for the Government’s localization policy.

  2. Concerning the Chinese language requirement, the Court of Appeal had not ruled the principle to impose the language requirement on the basis of job requirements in respect of overseas agreement officers on transfer to local agreement terms as unlawful. The Court’s ruling which was unfavourable to the Government was only directed at the sweeping wording in the relevant civil service circulars which had departed from the original intention of imposing the requirement. The policy as regards the application of a Chinese language requirement for renewal of agreements still remained intact. The Court had not made a ruling on Chinese language requirement for appointments on permanent and pensionable terms.

  3. Save as some implementation measures which the Court had ruled to be in conflict with the Bill of Rights, the Court’s ruling had indeed made it clear that the localization policy was not unlawful, and various important aspects of it had been upheld. The judgment therefore had limited significant impact on the policy. A further appeal would only prolong the state of uncertainty about the localization policy and create additional conflicts amongst different classes of civil servants. It could also risk greater losses to the Administration as the Government might lose in some of the appeal matters previously upheld by the Court.

2. SCS emphasized that the Administration was firmly committed to implementing the localization policy. In the light of the Court’s judgment, the Administration would continue to uphold the Chinese proficiency requirement as an important consideration for civil service appointments, and consider the best way forward to resolve the various issues associated with transfer arrangements to local terms for overseas agreement officers. He assured members that any decision would be made in consultation with the Staff Sides and with the interest of the public in mind.

3. Ms Emily LAU and Mr Michael HO Mun-ka enquired of the measures which would be taken by the Administration to give effect to the judgment on Chinese language requirement. SCS said that the Court had held that the implementation of the language requirement in the transfer arrangements was lawful (page 30 of Court of Appeal judgment). What the Court had ruled unlawful was the broad proposition set out in the civil service guidelines which implied that if any one post within a particular rank required Chinese language proficiency then an officer transferring to local terms in that rank should meet the same requirement, even though he might not be required to take up the post requiring Chinese. Deputy Secretary (Civil Service)1 (DS(CS)1) added that in the actual implementation of the language requirement in transfer arrangements, government departments were taking a pragmatic approach in each case in assessing the needs in the rank and the post that the officer concerned might reasonably be expected to fill during the period of his agreement. It was difficult to be categorical across the board. In fact, transfer applications would be looked at individually with reference to different ranks and departments. This was in line with the Court’s opinion that due consideration should be given to the specific practical needs of the job. He said that the Administration would make necessary adjustments and revisions to the internal circulars to reflect more accurately the policy intention.

4. SCS said that the Court had made no ruling on the question of Chinese language requirement for transfer from local agreement terms to P&P terms. The Court’s view was that it was a mere provisional proposal which was not susceptible to judicial review. He remarked that it was only reasonable that the threshold should be higher than that for renewal of agreements because of the long term employment nature of P&P appointments.

5. In reply to Ms Emily LAU’s question on the career prospect of overseas agreement officers who might not be able to meet the Chinese language requirement, SCS said that the Administration would apply the requirement with due flexibility, taking into account the fact that there were posts within the civil service which did not demand Chinese language proficiency for discharging the duties, at least in the short term. He added that officers who were out-competed in the opening-up arrangements lost out mainly for merit reasons, rather than the language factor. Thus far there had only been eight cases where the officers concerned were not renewed contract on local terms because of the failure to meet the Chinese language requirement. SCS asserted that the Administration would work closely with the Staff Sides with a view to working out within a reasonable time-frame a satisfactory approach to deal with transferees’ applications. He undertook to revert to the Panel on any progress.


6. Mr Michael HO Mun-ka enquired of how the Chinese language requirement was implemented for those common ranks with large establishments and with officers spreaded over many departments. SCS and DS(CS)1 said that certain officers such as Administrative Officers (AOs) and officers in the Judiciary and the Police Force were not affected by the Court’s judgment since these officers were not subjected to transfer arrangements. For other grades, if an officer on overseas agreement terms applied for transfer to local terms, an assessment would be made as to whether that officer was currently in a post where Chinese language was needed and whether he might be moved to another post where the use of Chinese was not required. Other factors such as the number of officers already in that rank who were or were not able to communicate in Chinese would also have to be taken into account. The consideration would therefore vary for different ranks and different departments. A balance would have to be struck in the particular circumstances of the case and where that could be reached was a matter for the management whilst considering a particular officer’s application. Mr HO enquired if the Administration would specify the Chinese language requirement for individual posts in particular ranks. DS(CS)1 replied that the Administration would need to examine in detail how this could be implemented


7. In response to a further question by Mr Michael HO Mun-ka on whether Chinese language proficiency would be a prominent factor in considering an officer’s suitability for promotion, DS(CS)1 said that the matter would have to be looked at in the context of a continual process towards a biliterate, trilingual civil service, in particular in the case of long term appointments. It was an established policy of the Government to promote officers on the basis of merits and suitability of the officers for filling posts in the promotion rank. Due consideration would be given to the language proficiency of the officers, having regard to job requirements in the next higher rank. Because of the great variety of posts and ranks and the sort of posting requirements that officers might be subjected to, it was difficult to put down an exhaustive set of criteria that could cover all situations. He remarked that the Administration would make decisions sensibly in each and every case.

8. The Chairman was concerned about whether the appointment of civil servants who could not communicate efficiently in Chinese might hamper the implementation of the Basic Law provision on the use of Chinese as an official language in the Hong Kong Special Administrative Region. SCS stressed that the Administration was firmly committed to a biliterate/trilingual civil service. The requirement of proficiency in both the Chinese and English languages to reflect this policy had been embodied in the 1994 Common Terms proposals for appointment to the civil service, which had the wide support of the Staff Sides and the community at large. In processing applications for renewal of agreements on local terms, the Chinese language requirement had been duly balanced against the operational needs of the posts. Regarding posts in the Judiciary, the question of use of Chinese language would be dealt with as a matter of top priority.

9. Dr LAW Cheung-kwok enquired of the impact of lifting the promotion ceilings for overseas AOs in the ranks of AOSGA and AOSGB1 on the implementation of Article 101 of the Basic Law. SCS advised that the purpose of imposing the promotion ceilings a few years back was to expand, through administrative measures, the pool of local AOs for consideration for promotion to Policy Secretaries posts in due course. The Administration saw no harm in lifting the ceilings now because all Policy Secretaries had now been filled by local AOs and there was now an adequate pool of local officers for succession to these top posts in the two senior ranks below. SCS added that currently there were only two or three overseas officers serving in the ranks of AOSGA and AOSGB1. He further advised that the promotion of officers who were not Chinese citizens to the rank of AOSGA would not contravene Article 101 of the Basic Law.

10. In response to members’ queries with regard to the impact of the demotion scheme and promotion restrictions, SCS replied that a total of 91 officers had been affected, of whom 44 were transferred laterally and restricted from promotion. The remaining 47 were demoted for one rank while they could retain their original salary but restricted from promotion and lost salary increments. All 91 officers were former overseas agreement officers now on local agreement terms. Whereas promotion restrictions on demotees had been lifted in January 1996, promotion restrictions for the level transferees were still in place. So far 17 of the demotees had gained re-promotion on merit. Since the Court had ruled that the demotion scheme and promotion restrictions were unlawful, the Administration would have to discuss with the Staff Sides and issue new guidelines on promotion as soon as possible. SCS said that the demotion scheme and restrictions on promotion were time limited measures introduced in July 1994 for a limited number of officers with overseas agreements expiring before September 1995 and who transferred to local terms then. By now some of these officers had already left the Government. He stated that some officers concerned might take legal action individually against the Government for redress. It was impossible to assess the scale of the possible claims at the present stage. The next course of action was for the Administration and the Staff Sides to work out measures to give effect to the Court’s judgment. SCS took on board members’ view that any proposal for the creation of posts must be fully justified with genuine functional needs.

11. Mr Michael HO Mun-ka enquired if any review consequent to the Court’s judgment would cover the grades of AOs and those in the Judiciary and the Police Force. SCS responded that the Administration did not see the need to change the arrangements for localization in these grades, taking into account the fact that the localization policy had proceeded smoothly for these grades and the Administration had not encountered any serious problems in complying with the relevant provisions of the Basic Law. Crown Solicitor added that the Court of Appeal’s ruling only dealt with arrangements for transfer to local terms as applied to permanent residents. It would have no effect on those civil servants who were not, or would not become, permanent residents of Hong Kong.

12. The Chairman enquired on what steps the Administration would take to allay the concerns of local officers arising from the Court’s judgment. SCS remarked that the practical impact of the judgment might have been exaggerated. He informed members that among the 180,000 officers in the civil service, only some 700 officers were overseas agreement officers. The number was further reduced to some 300 after discounting the 400 odd officers who fell within those grades not affected by the transfer arrangements. In addition, overseas agreement officers would not automatically be transferred to local terms. Under the present system, these officers must first become permanent residents. Secondly, they must be prepared to accept local terms. Thirdly, those officers in the promotion ranks had to out-compete others under the opening-up arrangements in order to have their contracts renewed on local terms. Furthermore, they would have to fulfill the usual criteria for contract renewal and might have to meet a Chinese language requirement on the basis of job requirements. With the totality of these factors, the implications for the localization policy would be limited. SCS further remarked that during the past two years, controversies between local and overseas officers had arisen over the measures to implement the localization policy. Now that a clear judgment was in place, it was time that all the parties concerned got down to finding a right balance in the implementation of the localization policy and the Bill of Rights in a way that was fair and acceptable to all.

13. Referring to Mr Michael HO Mun-ka’s queries concerning agreement officers applying for transfer to local P&P terms, SCS said that, following the High Court ruling in October 1995 which held that it was unlawful to restrict overseas transferees from further transferring to permanent establishments, the Administration had attempted to freeze all such applications, including those from local agreement officers. Since the Court of Appeal now ruled again that the restriction was unlawful, the Administration would have to give effect to the judgment by lifting the restriction. He stressed that both local agreement officers and overseas transferees would be treated on equal footing when their applications were considered. SCS advised that new arrangements would be put in place as soon as an agreement with the Staff Sides was reached. He undertook to report any development to the Panel. He further advised that transfer to P&P terms would not be automatic and that in the past, there had been cases where applications for transfer from local agreement terms to local P&P terms were refused for failure to meet other essential standards such as service needs and performance etc.


14. In response to Ms Emily LAU’s question, Principal Assistant Secretary (Appointment) Special Duties informed members that there were some 200 overseas agreement officers with permanent resident status who succeeded in transferring to local agreement terms. The Administration had no information as to how many of the remaining overseas agreement officers were permanent residents. Crown Solicitor advised that the current residential requirement for naturalization to become a permanent resident was five-year ordinary residence. Under the Basic Law, the residential requirement would be seven years. At this point in time, a person could not become a permanent resident by naturalization because the deadline for application had lapsed on 31 March 1996. In reply to the Chairman’s question, DS(CS)1 said that the Administration had written to all overseas agreement officers in January 1996 to remind them of the deadline for naturalization. These officers should also be aware of the other eligibility criteria for applying transfer to local terms.

15. Ms Emily LAU asked whether other channels were still available to date for overseas agreement officers to acquire the permanent resident status. SCS said that overseas agreement officers who had yet to become permanent residents would have to await a decision at the Joint Liaison Group (JLG) as regards the definition of permanent resident of Hong Kong after July 1997. When the avenue would be re-opened for foreign nationals to apply for the permanent resident status would depend on the progress of JLG deliberations and thereafter the relevant legislative enactment.

16. The Administration undertook to update the Panel in due course on the progress of staff consultation on the various issues related to the implementation of the localization policy.


II. Close of meeting

17. The meeting closed at 12:15 pm.

LegCo Secretariat
1 April 1997

Last Updated on 21 August 1998