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LCQ10: Back payments to staff members of subvented organisations in relation to civil service pay adjustments
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     Following is a question by the Hon Ip Kin-yuen and a written reply by the Secretary for Education, Mr Eddie Ng Hak-kim, in the Legislative Council today (June 3):

Question:

     The Finance Committee (FC) of this Council approved the 2014 - 2015 civil service pay adjustment proposal at its meeting on January 16 this year. The Secretary for the Civil Service said at the meeting that the authorities would forthwith make administrative arrangements so that the employees of subvented organisations could receive back payments before the Chinese New Year.  However, I have recently received complaints from some former teachers of the Vocational Training Council (VTC), a subvented organisation, that they have not yet received back payments. In this connection, will the Government inform this Council:

(1) whether subvented organisations may set the following requirement on their own: employees must still be in service when FC approves the civil service pay adjustment proposal for them to be eligible to receive back payments; if so, of the reasons for that;

(2) of the amount of subventions additionally allocated, in each of the past five financial years, by the authorities to VTC as a result of civil service pay adjustments; whether such amounts included the sums required for making back payments to those teaching staff members who left service during the period between the beginning of the corresponding financial years and the time when FC approved the civil service pay adjustment proposals; whether it knows the number of such type of teaching staff members each year, and whether VTC made back payments to them; if VTC did not make back payments, of the reasons for that;

(3) whether it knows the surplus amounts of the subventions in each of the past five financial years as a result of VTC not making back payments to those departed teaching staff mentioned in (2) above; of the use of such balances, and whether such balances are required to be returned to the Government; and

(4) what measures are in place to ensure that the subventions additionally allocated by the authorities to subvented organisations for making back payments are all used for this purpose; whether it has reviewed the related arrangements; if it has, of the improvement measures?

Reply:

President,

     The Vocational Training Council (VTC) is a statutory body in Hong Kong established under the Vocational Training Council Ordinance (Cap 1130).  With recurrent funding from the Education Bureau (EDB) and the Labour and Welfare Bureau, the VTC provides vocational education and training to about 250 000 students and in-service personnel each year. My reply to the various parts of the question is as follows:

(1) According to section 20(1)(c) of the Vocational Training Council Ordinance, the VTC may make rules not inconsistent with the Ordinance for matters related to the conditions and terms of employment of persons employed or engaged by it.

     There are two remuneration packages, namely the old remuneration package (ORP) and the new remuneration package (NRP), in the VTC. For staff under the ORP, their salary is pegged to pay points of the civil service pay scales and their pay adjustment mechanism is similar to that of the civil service. That means even if they have left the service before the approval of the civil service pay adjustment proposal for the year, they are eligible to receive back payments with retrospective effect from April 1 of the corresponding financial year when the proposal is approved by the Finance Committee (FC) of the Legislative Council. The NRP is applicable to staff appointed on or after April 1, 2004. For staff under the NRP, their salary is set within a pay range with reference to their ranks. In addition to the rates of civil service pay adjustment approved by the FC for the corresponding financial year and the relevant data, their pay is also adjusted according to the general market condition and the staff recruitment and wastage position of the VTC. To be eligible for the pay adjustment, they must be in service when the pay adjustment proposal for the corresponding financial year is approved. Pay adjustment arrangements under the NRP were clearly specified in the VTC staff circular entitled "Annual Pay Review and Adjustment Mechanism for Staff on New Remuneration Package" in 2011. Such arrangements are also set out in the VTC staff circulars on annual pay adjustment matters.

(2) According to the financial arrangements with the EDB, the VTC submits its manpower figures on April 1 to the EDB each year for seeking funding support for back payments arising from pay adjustment. Upon formal approval of the civil service payment adjustment for the corresponding financial year by the FC, the VTC will arrange for back payments to eligible staff members under the ORP and NRP.

     The amount of additional subvention allocated to the VTC by the EDB as a result of the civil service pay adjustments in the past five financial years is as follows:

Financial year         Additional subvention
---------------        ---------------------              
2010-11                  $ 15,354,000
2011-12                  $112,268,000
2012-13                  $105,047,000
2013-14                  $ 65,910,000
2014-15                  $102,799,000

     The number of staff members who left the service, including those under the ORP and NRP, during the period between the beginning of the corresponding financial years (April 1) and the time when the FC approved the civil service pay adjustment proposals is set out below:

Financial year       No. of departed staff
--------------       ---------------------
2010-11                       41
2011-12                       57
2012-13                       59
2013-14                       66
2014-15                      358

     Only some staff members included in the above table, i.e. those under the NRP, could not receive back payments. For the 2014-15 financial year, a larger number of staff members left the VTC during the period between April 1 and the date of approval of the civil service pay adjustment proposal by the FC. This is because the relevant pay adjustment proposal was only approved in January while proposals for each of the previous four financial years were approved in July.

(3) and (4) Under the financial arrangements between the EDB and the VTC, expenses related to pay adjustments for all staff members appointed after April 1, whether for filling existing vacancies or newly-created posts for new projects or activities, are to be fully met by the existing resources of the VTC. The EDB will not provide any additional subvention to the VTC for this purpose. The manpower establishment of the VTC expanded progressively in the past few years. Although the VTC does not make back payments to departed staff members under the NRP, it has to bear the expenses arising from pay adjustments for new staff members appointed after April 1. Take the 2014-15 financial year as an example, there were 292 newly-appointed staff members after April 1, 2014. The expenses arising from pay adjustments for these new appointees were much more than the surplus subvention from non-making of back payments to departed staff members under the NRP.

     Regarding the additional subvention arising from civil service pay adjustment, the VTC has been following the relevant financial arrangements by making back payments to eligible staff members under the ORP and NRP. The EDB will review the relevant arrangement where appropriate in due course.

Ends/Wednesday, June 3, 2015
Issued at HKT 13:02

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