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LCQ21: Severance payments, long-service payments and end-of-contract gratuities to non-civil service contract staff
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     Following is a question by the Hon Tang Ka-piu and a written reply by the Secretary for the Civil Service, Mr Paul Tang, in the Legislative Council today (June 19):

Question:

     In connection with the disbursement of severance payments (SPs), long-service payments (LSPs) and end-of-contract gratuities to non-civil service contract (NCSC) staff by various bureaux/departments (B/Ds), will the Government inform this Council:

(a) of the respective total amounts of employer's contributions made by various B/Ds to Mandatory Provident Fund (MPF) schemes in respect of their NCSC staff in the past five years;

(b) as an employer may offset LSP or SP payable under the Employment Ordinance (Cap. 57) with the accrued benefits derived from the employer's contributions made to an MPF scheme for the employee, of (i) the total amount of LSPs disbursed to NCSC staff and the total amount of LSPs payable before the offsetting arrangements; (ii) the total amount of SPs disbursed to NCSC staff and the total amount of SPs payable before the offsetting arrangements, in respect of each B/D in the past five years;

(c) as the recruitment advertisements for some NCSC positions have stated that the end-of-contract gratuities to such employees plus the amounts of contributions made by the Government to the MPF schemes of such employees would equal to 15% or 10% of the total amount of their basic salaries, of the total amount of gratuities disbursed to NCSC staff by each B/D in the past five years, as well as such total amount after including the contributions to MPF schemes; and

(d) whether the Government will consider taking the lead in cancelling the arrangements of reducing the payable end-of-contract gratuities by its contributions to MPF schemes as mentioned in (c), so that other employers will follow suit; if it will not, whether it will consider stating separately the formulas for calculating the end-of-contract gratuities and MPF contributions in the employment terms set out in the recruitment advertisements to let applicants better understand the employment terms of the positions concerned?

Reply:

President,

(a) The respective total amounts of employer's contributions made by bureaux/departments (B/Ds) to Mandatory Provident Fund (MPF) schemes in respect of their full-time (Note) Non-Civil Service Contract (NCSC) staff in the past five years are set out at Annex 1.

(b) The NCSC Staff Scheme, introduced in 1999, aims at providing B/Ds with a flexible means of employment to respond more promptly to changing operational and service needs.  Under the NCSC Staff Scheme, B/Ds have the full discretion to determine the appropriate employment package of their NCSC staff subject to the guiding principle that the terms and conditions for the NCSC staff should be no less favourable than those provided for under the Employment Ordinance (EO) (Cap. 57).  In this regard, B/Ds should follow the relevant provisions of the EO to pay for long-service payment (LSP) and severance payment (SP) to their NCSC staff.

     Under the NCSC Staff Scheme, Heads of Bureaux/Departments (HoDs) are fully accountable for the employment and management of their NCSC staff, and to meet from their own resources the entire cost for the employment of these staff.  Since the detailed calculation and disbursement of LSP and SP of individual NCSC staff are arranged and processed by their respective B/Ds, the Civil Service Bureau (CSB) does not have information on the breakdown of the amount of LSP and SP disbursed to NCSC staff and the amount of LSP and SP payable before offsetting the accrued benefits derived from the employer's contributions made to MPF schemes, in respect of each B/D in the past five years.

(c) The total amount of gratuities disbursed to full-time NCSC staff by each B/D in the past five years is provided at Annex 2.  However, CSB does not have information on the total amount of gratuities disbursed to NCSC staff and respective contributions to MPF schemes by B/Ds for individual years, and hence cannot provide the relevant breakdown.

(d) Under the NCSC Staff Scheme, HoDs have the full discretion to determine the appropriate employment package of their NCSC staff, having regard to such factors as the recruitment situation and employment market, and to decide whether to offer end-of-contract gratuity and the percentage rate of gratuity. In accordance with the prevailing guidelines, the gratuity, plus the government's MPF contributions in respect of the NCSC staff, is as follows:

(1) If the NCSC staff is required to perform skilled job (i.e. requiring skills in managerial, professional, technical, or other specialised fields), the percentage rate of gratuity, plus the government's MPF contributions in respect of the NCSC staff, should not be more than 15% of the total basic salary drawn during the contract period;

(2) If the NCSC staff is required to perform non-skilled job, the percentage rate should not be more than 10%.

     Since these terms of employment are specified clearly in the recruitment advertisement and stipulated in the employment contract, we do not see any need to alter the current recruitment advertisement arrangement.  In addition, both end-of-contract gratuity and government's contributions to MPF schemes are funded by the government.  There is no question of reducing the payable end-of-contract gratuity by the contributions to MPF schemes.

Note: "Full-time" means the employment is on a "continuous contract" as defined by the Employment Ordinance, namely an employee who works continuously for the same employer for four weeks or more, with at least 18 hours in each week.

Ends/Wednesday, June 19, 2013
Issued at HKT 15:22

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