FCR(98-99)18

For discussion
on 17 July 1998

ITEM FOR FINANCE COMMITTEE

CIVIL SERVICE PAY ADJUSTMENT 1998

    Members are invited -

  1. to approve, with effect from 1 April 1998, an increase in salary of 6.03% for civil servants in the upper pay band and Directorate Pay Scale Points 1 and 2 (D1 and D2) and equivalent, and an increase in salary of 5.79% for civil servants in the middle and lower pay bands, and similar pay adjustments for the judicial service and those subvented non-government organisations (NGOs) whose salary adjustments follow those in the civil service;

  2. to approve the grant of a "pensionable personal allowance" for officers at Directorate Pay Scale Point 3 (D3) and above and equivalent serving on pensionable terms who leave the civil service in 1998-99 and receive pension benefits on or before 1 April 1999, and similar arrangements for the judicial service and ex-civil servants working in subvented or public organisations who serve on mixed service pension or frozen service pension or special no pay leave;

  3. to note that supplementary provision of about $4,602 million will be required in 1998-99 for the civil service, the judicial service, reimbursement to the Housing Authority, the auxiliaries and NGOs subvented on a deficiency grant basis; and

  4. to note that supplementary provision of about $1,261 million may be made available, on application, for NGOs subvented on a discretionary grant basis, having regard to the merits of each case.

PROBLEM

The 1997-98 Pay Trend Survey of private sector companies has revealed movements in private sector pay over the 12-month period from 2 April 1997 to 1 April 1998. We need to consider how these changes should be reflected in the pay for civil servants, members of the judicial service and staff in subvented NGOs whose salary adjustments follow those in the civil service.

PROPOSAL

2. We propose to adjust salaries with effect from 1 April 1998 by 6.03% for civil servants in the upper pay band and D1 and D2 and equivalent, and by 5.79% for those in the middle and lower pay bands, and similar pay adjustments for the judicial service and staff in subvented NGOs. We have decided that there will be no adjustment to the pay of officers at and above D3 level and equivalent in the civil service, judicial service and the relevant NGOs in subvented sector for 1998-99. The revised civil service pay scales and the revised Judicial Officers' Salary Scale are at the Enclosure.

3. Further to the decision of no pay adjustment for officers at D3 level and above and equivalent, we propose to grant a "pensionable personal allowance" to civil servants at D3 and above and equivalent who leave the service in 1998-99 and receive their pension benefits on or before 1 April 1999 for the day preceding the day of their leaving the service which is between 2 April 1998 and 1 April 1999 inclusive. This also applies to those in the judicial service, and pensionable ex-civil servants serving in subvented or public organisations.

JUSTIFICATION

4. The Pay Trend Survey for the period 2 April 1997 to 1 April 1998 produced the following results -

Pay band Gross pay
trend indicator
(A)
Payroll cost of
civil service
increments
(B)
Net pay
trend indicator
(A) - (B)
Upper
($43,941 to $87,430 per month)
7.30% 1.27% 6.03%
Middle
($14,330 to $43,940 per month)
7.04% 1.25% 5.79%
Lower
(Below $14,330 per month)
6.25% 1.24% 5.01%

5. We propose to increase the salaries for the middle and upper pay bands in line with the net pay trend indicators (PTIs). For the lower pay band, we propose to bring the level of adjustment up to that for the middle pay band, in accordance with a recommendation of the 1988 Committee of Inquiry which was accepted by Government.

6. The Staff Sides of the Disciplined Services Consultative Council, the Police Force Council, and the Senior Civil Service Council have accepted the pay offer. The Staff Side of the Model Scale 1 Staff Consultative Council (Mod 1 Council) has asked that the pay adjustment for the lower band should not be lower than that for the upper band. We consider that apart from the adjustment accorded to the lower band as set out in paragraph 5 above, there are no overriding reasons to further depart from the net PTIs. The PTIs reflect what happened in the private sector in the past year. Staff in the upper salary band in the private sector received a higher pay adjustment than those in the middle and lower salary bands, a fact the Government cannot ignore in determining the pay adjustment for civil servants. It is not possible, therefore, to meet the pay claim of the Staff Side of the Mod 1 Council.

7. For the directorate, we propose that the salary adjustment for those at D1 and D2 and equivalent should follow that for the upper pay band, i.e. 6.03%. For those at D3 and above and equivalent, we have decided on no adjustment for 1998-99. The economic turmoil in the last few months has brought hardship to many in the community. During these exceptional times, the public looks to the top echelons of Government for leadership. We have therefore decided not to adjust the salary of these officers as part of our response to the severe economic adjustment that Hong Kong is facing, to demonstrate that those responsible for decision-making in Government understand and are prepared to share the hardship caused by the current economic turmoil.

8. It is Government's policy to extend the annual civil service pay adjustment to the judicial service and to those subvented NGOs whose salary adjustments follow exactly those in the civil service. For parity, the freeze in salary adjustment would also apply to their staff at D3 and above and equivalent.

9. With the salary adjustment freeze described in paragraph 7, pensionable officers at D3 and above and equivalent leaving the service in 1998-99 on retirement or for other reasons (e.g. death) and receiving their pension benefits on or before 1 April 1999, will lose out permanently in pension benefits. This is because their pension benefits are calculated on the basis of their highest pensionable emoluments, which are usually determined with reference to their highest substantive salaries before leaving service. As the salary adjustment freeze is not intended to undercut the pension benefits of these officers, we propose the grant of a one-off "pensionable personal allowance" to officers at D3 and above and equivalent serving on pensionable terms who leave the service in 1998-99 with pension benefits payable on or before 1 April 1999. As a corollary, this allowance should also apply to any officers at D3 and above and equivalent who are killed or injured on duty in 1998-99 with entitlement to pension benefits calculated on the basis of their pensionable emoluments in the year. We further propose that the allowance should be granted for the last day of the officer's pensionable service within 1998-99, and be calculated at 6.03% of his substantive salary for the last day of his pensionable service within 1998-99. We also propose that the mechanism be applied in the same manner to the judicial service. With this one-off grant of personal allowance, the pensionable emoluments (for the purpose of calculating pension benefits) of eligible officers in the civil and judicial services will be restored to the level that would have applied under a normal pay adjustment, even though they are not entitled to any salary increase in 1998-99.

10. For ex-civil servants working in subvented or public organisations who are on mixed service pension 1 or frozen pension 2 or special no-pay leave 3 and leaving the service in 1998-99 on retirement or similar grounds, we propose that the allowance should also be granted to them in the same manner as proposed in paragraph 9 above.

FINANCIAL IMPLICATIONS

11. The cost of the proposed pay adjustment for the civil service, the judicial service and subvented NGOs in terms of salary and allowances, after taking into account the estimated savings of $67 million arising from the pay adjustment freeze in paragraphs 7 and 8 above, is estimated to be $5,863 million 4 in 1998-99, calculated as follows -


$ million
(a) Civil service (excluding seconded staff and staff working in trading funds 5) and judicial service 2,440
(b) Reimbursement to Housing Authority in respect of services carried out for Government 24
(c) NGOs subvented -
    (i) on a deficiency grant basis 6
2,120
    (ii) on a discretionary grant basis 7
1,261
(d) Auxiliaries 18
Total 5,863

12. The $3,381 million for subvented NGOs is made up as follows -


$ million
Education (excluding universities) 1,125
Universities 584
Health 1,234
Social welfare 281
Vocational Training Council 105
Others 52
Total 3,381

13. The "pensionable personal allowance" referred to in paragraphs 9 to 10 above carries little financial implications because of its one-off nature, the small amounts involved and the small number of officers at D3 and above and equivalent likely to be eligible.

14. We have not made any specific provision under individual heads of expenditure for the proposed pay adjustment and "pensionable personal allowance" in the 1998-99 Estimates. Subject to Members' approval of the proposal, we shall approve under delegated authority the supplementary provision required by individual departments and NGOs. We shall offset the supplementary provision, as necessary, by deleting an equivalent amount under Head 106 Miscellaneous Services Subhead 251 Additional commitments.

15. It is not possible to quantify at this stage the exact amount of supplementary provision needed under each head of expenditure. We estimate the total supplementary provision required for the civil service, the judicial service, reimbursement to the Housing Authority, the auxiliaries and organisations subvented on a deficiency grant basis at $4,602 million. As regards organisations subvented on a discretionary grant basis, Members have previously agreed that their requests for additional funds to implement salary increases similar to those for the civil service should be considered on their individual merits, having regard to the extent to which each organisation can afford to meet the cost from its own resources. We estimate the total supplementary provision required by these organisations at $1,261 million.

BACKGROUND INFORMATION

16. Government's policy is that annual adjustments in civil service pay should be broadly comparable to pay adjustments in the private sector. To this end, we conduct annually a survey of pay trends in the private sector over the previous year. The results of the survey, after being discounted by the payroll costs of civil service increments, provide the basis for considering the size of the annual pay adjustment. We also take into account other factors including increases in the cost of living, the state of the economy, budgetary considerations, civil service morale, Staff Sides' pay claims and any other relevant factors. Each year's pay adjustment is a separate and independent exercise, determined by the circumstances prevailing at the time.

17. This system of annual pay trend surveys has been in operation since 1974. The survey is conducted by the Pay Survey and Research Unit (PSRU) of the Standing Commission on Civil Service Salaries and Conditions of Service (the Standing Commission) and is monitored by the Pay Trend Survey Committee, which comprises members of the Standing Commission, the Standing Committee on Disciplined Services Salaries and Conditions of Service, the Staff Sides of the central consultative councils and Civil Service Bureau. This year the PSRU collected data from 69 Hong Kong companies from major sectors of the economy, covering the period from 2 April 1997 to 1 April 1998. The survey covers all full-time employees with basic salaries equivalent to non-directorate staff in the civil service, divided into the following three pay bands - upper band ($43,941 per month to $87,430 per month), middle band ($14,330 per month to $43,940 per month) and lower band (below $14,330 per month).




Civil Service Bureau
July 1998


Enclosure to FCR(98-99)18


Master Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






49

83,105

88,115


48

80,220

85,055


47

77,435

82,105


46 (44B)

74,725

79,230


45 (44A)

72,135

76,485


44

69,615

73,815


43

67,190

71,240


42

64,425

68,310


41

61,765

65,490


40

59,210

62,780


39

56,765

60,190


38

54,255

57,525


37

51,870

55,000


36 (33C)

49,535

52,520


35 (33B)

47,335

50,190


34 (33A)

45,240

47,970


33

43,940

46,485


32

41,965

44,395


31

40,085

42,405


30

38,285

40,500


29

36,575

38,695


28

34,920

36,940


27

33,355

35,285


26

31,860

33,705


25

30,430

32,190


24

29,100

30,785


23

27,790

29,400


22

26,540

28,075


21

25,340

26,805


20

24,135

25,530


19

22,990

24,320


18

21,900

23,170


17

20,865

22,075


16

19,860

21,010


15

18,915

20,010


14

18,010

19,055


13

17,145

18,140


12

16,165

17,100



Master Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






11

15,215

16,095


10

14,330

15,160


9

13,515

14,300


8

12,690

13,425


7

11,905

12,595


6

11,170

11,820


5

10,505

11,115


4

9,845

10,420


3

9,245

9,785


2

8,675

9,180


1

8,150

8,625



Model Scale 1 Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






8

10,615

11,230


7

10,405

11,010


6

10,190

10,785


5

9,995

10,575


4

9,800

10,370


3

9,615

10,175


2

9,430

9,980


1

9,245

9,785



Police Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






59

181,050

181,050


58

(154,150)

149,600

(154,150)

149,600


57

(135,550)

(131,700)

127,900

(135,550)

(131,700)

127,900


56

(116,800)

(113,400)

110,000

(123,850)

(120,250)

116,650


55

(101,400)

(98,300)

95,350

(107,500)

(104,250)

101,100


54

87,430

92,700


53

84,040

89,110


52

80,660

85,525


51

77,645

82,325


50

74,765

79,275


49

72,090

76,435


48

69,575

73,770


47

67,085

71,130


46

64,655

68,555


45

62,330

66,090


44

60,035

63,655


43

57,885

61,375


42

55,770

59,135


41

53,675

56,910


40

51,775

54,895


39

49,900

52,910


38

48,080

50,980


37

46,470

49,270


36

44,965

47,675


35

43,865

46,405



Police Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$


34

42,290

44,740


33

40,545

42,895


32

38,840

41,090


31

37,130

39,280


30

35,465

37,520


29

33,830

35,790


28

32,220

34,085


27

30,610

32,380


26

29,280

30,975


25

28,405

30,050


24

27,570

29,165


23

26,745

28,295


22

26,135

27,650


21

25,480

26,955


20

24,810

26,245


19

24,180

25,580


18

23,510

24,870


17

22,850

24,175


16

22,220

23,505


15

21,610

22,860


14

20,995

22,210


13

20,400

21,580


12

19,825

20,975


11

19,340

20,460


10

18,690

19,770


9

18,130

19,180


8

17,575

18,595


7

17,070

18,060


6

16,550

17,510


5

16,065

16,995


4

15,595

16,500


3

15,120

15,995


2

14,670

15,520


1

14,240

15,065



Note : Figures in brackets represent increments.



General Disciplined Services (Commander) Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






4

162,650

162,650


3

(135,550)

(131,700)

127,900

(135,550)

(131,700)

127,900


2

(116,800)

(113,400)

110,000

(123,850)

(120,250)

116,650


1

(101,400)

(98,300)

95,350

(107,500)

(104,250)

101,100

Note : Figures in brackets represent increments.


General Disciplined Services (Officer) Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






38

87,430

92,700


37

84,040

89,110


36

80,660

85,525


35

77,645

82,325


34

74,765

79,275


33

72,090

76,435


32

69,575

73,770


31

67,085

71,130


30

64,655

68,555


29

62,330

66,090


28

60,035

63,655


27

57,885

61,375


26

55,770

59,135


25

53,675

56,910


24

51,775

54,895


23

49,900

52,910


22

48,080

50,980


21

46,470

49,270


20

44,965

47,675


19

43,865

46,405


18

42,290

44,740


17

40,545

42,895


16

38,805

41,050


15

37,050

39,195


14

35,310

37,355


13

33,615

35,560


12

31,925

33,775


11

30,370

32,130


10

28,910

30,585


9

27,490

29,080


8

26,060

27,570


7

24,650

26,075


6

23,260

24,605


5

21,830

23,095


4

20,600

21,795


3

19,630

20,765


2

18,650

19,730


1

17,850

18,885



General Disciplined Services (Rank and File) Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






27

26,660

28,205


26

25,895

27,395


25

25,115

26,570


24

24,395

25,805


23

23,770

25,145


22

23,110

24,450


21

22,475

23,775


20

21,885

23,150


19

21,300

22,535


18

20,715

21,915


17

20,105

21,270


16

19,555

20,685


15

19,010

20,110


14

18,465

19,535


13

17,925

18,965


12

17,385

18,390


11

16,850

17,825


10

16,320

17,265


9

15,810

16,725


8

15,280

16,165


7

14,755

15,610


6

14,290

15,115


5

13,705

14,500


4

13,325

14,100


3

12,955

13,710


2

12,575

13,305


1

12,230

12,940



Judicial Officers' Salary Scale


Officer

As at 31.3.1998

$

W.e.f. 1.4.1998

$






Chief Justice, Court of Final Appeal

216,650

216,650


Judge, Court of Final Appeal

210,750

210,750


Chief Judge of the High Court

210,750

210,750


Justice of Appeal of the Court of Appeal of the

High Court

189,900

189,900


Judge of the Court of First Instance of the

High Court

181,050

181,050


Registrar, High Court

149,600

149,600


Chief Judge of the District Court

149,600

149,600


Deputy Registrar, High Court

(144,750)

(140,550)

136,400

(144,750)

(140,550)

136,400


Judge of the District Court

(135,550)

(131,700)

127,900

(135,550)

(131,700)

127,900


Chief Magistrate

(135,550)

(131,700)

127,900

(135,550)

(131,700)

127,900


Assistant Registrar, High Court

(116,800)

(113,400)

110,000

(123,850)

(120,250)

116,650


Member, Lands Tribunal

(116,800)

(113,400)

110,000

(123,850)

(120,250)

116,650


Principal Presiding Officer, Labour Tribunal

(107,450)

(104,450)

101,400

(113,950)

(110,750)

107,500



Judicial Officers' Salary Scale


Officer

As at 31.3.98

$

W.e.f. 1.4.1998

$






Principal Adjudicator, Small Claims Tribunal

(107,450)

(104,450)

101,400

(113,950)

(110,750)

107,500


Principal Magistrate

(107,450)

(104,450)

101,400

(113,950)

(110,750)

107,500


Coroner

(98,300)

(95,350)

92,650

(104,250)

(101,100)

98,250


Presiding Officer, Labour Tribunal

(98,300)

(95,350)

92,650

(104,250)

(101,100)

98,250


Adjudicator, Small Claims Tribunal

(98,300)

(95,350)

92,650

(104,250)

(101,100)

98,250


Magistrate

(98,300)

(95,350)

(92,650)

(86,050)

(84,040)

82,035

(104,250)

(101,100)

(98,250)

(91,240)

(89,110)

86,980


Special Magistrate

(55,950)

(54,630)

53,325

(59,325)

(57,925)

56,540

Note : Figures in brackets represent increments.


Directorate Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






D10

216,650

216,650


D9

204,800

204,800


D8

181,050

181,050


D7

175,600

175,600


D6

162,650

162,650


D5

154,150

154,150


D4

(149,600)

145,150

(149,600)

145,150


D3

(135,550)

(131,700)

127,900

(135,550)

(131,700)

127,900


D2

(116,800)

(113,400)

110,000

(123,850)

(120,250)

116,650


D1

(98,300)

(95,350)

92,650

(104,250)

(101,100)

98,250

Note : 1 - Figures in brackets represent increments.

2 - The Chief Executive's salary is fixed at 125% of that of a D10 officer

(i.e. $270,800 as at 31.3.1998 and also w.e.f. 1.4.1998).


Directorate (Legal) Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






DL7

193,050

193,050


DL6

162,650

162,650


DL5

154,150

154,150


DL4

(149,600)

145,150

(149,600)

145,150


DL3

(135,550)

(131,700)

127,900

(135,550)

(131,700)

127,900


DL2

(116,800)

(113,400)

110,000

(123,850)

(120,250)

116,650


DL1

(98,300)

(95,350)

92,650

(104,250)

(101,100)

98,250

Note : Figures in brackets represent increments.


Training Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






16

18,870

19,965


15

17,965

19,005


14

17,105

18,095


13

16,355

17,300


12

15,350

16,240


11

14,070

14,885


10

12,920

13,670


9

12,165

12,870


8

11,420

12,085


7

10,720

11,345


6

10,070

10,655


5

9,445

9,995


4

8,870

9,385


3

8,335

8,820


2

7,810

8,265


1

7,340

7,765


Technician Apprentices' Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






4

9,145

9,675


3

8,335

8,820


2

7,535

7,975


1

6,930

7,335


Craft Apprentices' Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






4

7,230

7,650


3

6,620

7,005


2

5,985

6,335


1

5,385

5,700


Independent Commission Against Corruption Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






44

(154,150)

149,600

(154,150)

149,600


43

(135,550)

(131,700)

127,900

(135,550)

(131,700)

127,900


42

(116,800)

(113,400)

110,000

(123,850)

(120,250)

116,650


41

(101,400)

(98,300)

95,350

(107,500)

(104,250)

101,100


40

87,430

92,700


39

84,040

89,110


38

80,660

85,525


37

77,645

82,325


36

74,765

79,275


35

72,030

76,375


34

69,530

73,725


33

67,020

71,060


32

64,585

68,480


31

62,055

65,795


30

59,745

63,350


29

57,410

60,870


28

55,105

58,430


27

52,770

55,950


26

50,455

53,495


25

48,165

51,070


24

45,855

48,620


23

43,705

46,235


22

42,380

44,835


21

40,435

42,775


20

38,435

40,660


19

36,465

38,575


18

34,490

36,485


Independent Commission Against Corruption Pay Scale


Point

As at 31.3.1998

$

W.e.f. 1.4.1998

$






17

32,510

34,390


16

30,995

32,790


15

29,490

31,195


14

28,235

29,870


13

26,990

28,555


12

25,735

27,225


11

24,480

25,895


10

23,195

24,540


9

21,950

23,220


8

20,715

21,915


7

19,560

20,695


6

18,435

19,500


5

17,295

18,295


4

16,095

17,025


3

14,895

15,755


2

13,705

14,500


1

12,700

13,440

Note : Figures in brackets represent increments.


1.Ex-civil servants transferred to organisations (e.g. the Hospital Authority) on mixed service pension would continue to enjoy pension benefits for their service with the subvented NGOs. Pension payments will be apportioned between the Government and the NGOs.

2.Ex-civil servants transferred to organisations (e.g. the Hospital Authority) on frozen pension have their frozen civil service pension or allowance computed on the basis of their last substantive civil service salary point before transfer and the corresponding salary prevailing when they retire from the subvented NGOs in approved circumstances.

3.Civil servants may be granted special no-pay leave to serve in organisations such as the Independent Commission Against Corruption. Any salary revision during the period of special no-pay leave will be taken into account in the computation of his pension benefits.

4.The pay adjustment will also lead to an increase in pension payments for those who retire during the year, estimated at $234 million in 1998-99.

5.Salaries and allowances for civil servants seconded to non-departmental public organisations or working in trading funds bodies are recovered from the respective organisations/trading funds.

6.A deficiency grant is designed to meet the difference in full between a subvented organisation's income and expenditure for a programme of activities approved by Government.

7.A discretionary grant is designed to assist organisations to meet the cost, either in whole or in part, of a programme of activities approved by Government. The degree of financial assistance is entirely at Government's discretion.