ALU interviews Hong Kong civil service union leaders whose members are facing a pay cut

Leung Chau-ting, Chairman, Hong Kong Federation of Civil Service Unions; President Hong Kong Clerical Grades Civil Servants General Union (CGCSGU), and Chan Wai-keung, First Vice-President of the CGCSGU
19 March 2002

ALU How many members do you represent, what is the rate of representation, and what kind of workers are they in general?
LCT We have 18 unions in the federation with about 10,000 members. These workers are about one third of the almost 30,000 eligible members, who are a mixture of staff including white collar, clerical, technical, parks and gardens, lifeguards, and police interpreters.

ALU How do you react to the announcement of a 4.75 percent reduction in staff pay?
LCT We cannot accept it because recent years’ pay reviews have shown there are three levels of pay increase - high, middle, and low. The high grades receive the biggest percentage increases while middle and lower ranks get the least. Where a 4.75 cut in pay will not make much difference to the highest paid, it is a big cut for the lowest paid and influences their lives.

ALU Are your members alarmed?
LCT Yes of course. Last year’s pay trend survey of the private sector, on which the government bases our annual increase, was from 2.38 to 4.99, and they want a similar rise this year but the lower and middle level staff only got 2.38 per cent salary increase. However this year they may face a cut of 4.75 percent.

ALU Have you made any representations to the government?
LCT We met the Secretary for the Civil Service (SCS) last Thursday [14 March]. He said he would consider the pay cut according to the pay trend survey indicator.

ALU But the pay trend survey for this year is not yet finished. So his proposal for a 4.75 percent cut is just a guess, or a hope that private sector pay will go down!
LCT Yes. The Financial Secretary’s budget speech indicated that the government expects a 4.75 percent reduction in the pay of the commercial sector after the survey is finished at the end of April.

ALU As the pay trend indicator is a collection of statistics contributed by private sector companies whose employees I think also don’t want a pay cut, do you have any plans to fight the employers over the wage cut together with non-civil service unions?
LCT Impossible. Most private sector workers do not join unions, and those that do will go along with the government’s position to cut. Look at all the bank workers at the Hong Kong and Shanghai Bank who were dismissed without protest from the unions.

ALU In 1999 Hong Kong’s Chief Executive (CE) was talking about privatisation and contracting work out of the civil service. How is this proceeding?
LCT It is well under way, though the unions have had some success. But civil servants now have no faith in the government. The government tries to contract out as many jobs as possible; even the CE’s post can be contracted out! (laughter)

ALU What did you say to the SCS at Thursday’s meeting?
LCT We said attention must be paid to basic grades. Their salary scale earns HK$11,000 [US$1 = HK$7.75] or below. So a 4.75 percent wage drop is like a cut to the flesh. So the 4.75 percent cut should not apply to the basic staff. The SCS himself admits that about 34,000 civil servants only get up to HK$15,000 - if we take the average of around HK$12,500, 4.75 percent less would leave them with HK$11,906.25 - this will really affect them.
When May comes there will be a big headache for the SCS and a crucial moment for the civil servants because the pay trend survey indicator will be made public and will probably show that the pay cut will be highest for the lowest private sector earners, and there may be no pay change for higher paid staff because in Hong Kong the richest get more and they don’t suffer the pay cuts. I should tell you that every time there is a salary increase in the civil service, the difference in pay between low and high grades gets bigger. So if they really want a pay cut, they better cut the higher grades pay, as this would help reduce the difference between the rich and the poor.
The SCS will need to legislate because pay cuts in the civil service have never been without legislation.

We asked the SCS if the legislation is for coming years or just this year. He said that planned legislation is just for this year, with the indicator included in the legislation.
Usually we sit with the government to negotiate pay, but if the government makes this legislation, negotiations will disappear and will hurt the civil servants. There will be no negotiations if legislation for a salary cut is established, because the government can use the regulation to avoid negotiations with us. Then the negotiation process we created over the past few years will be destroyed.
We also asked the SCS - if we don’t agree to the salary cut, could there be lay-offs or early retirement instead as happens in the private sector? Maybe our Federation would accept this instead of the pay cut, but not all of us agree to it; many of our members would support it. I personally don’t agree to it, because the first voluntary retirement scheme in 2001 attracted many of our members - 21,000 of them took early retirement, and all these jobs disappeared forever.
We are not satisfied with the SCS’ reply - he said “If you don’t like the system you can resign yourselves, [ironic laughter] and the meeting was not happily finished.”

ALU Do you have any plans for big May Day rallies this year?
LCT No. Because the 1999 May Day protests [civil servants demonstrating against escalating privatisation] bankrupted the union - it cost more than HK$110,000, and our finances are still not good. So now the union has no paid staff, all of our committee members are voluntary. But as a result of that protest, at least the privatisation programmes, especially for water and housing, were slowed down.

ALU I have read that the disciplined services [police, fire fighters, prison warders etc.] will consider taking the government to court if the pay cut violates agreements or laws. Do you support them?
LCT It is difficult for us to work closely with them because there is a conflict of interests and opposing policies between our unions and their unions. This is because they have fringe benefits that other civil servants don’t get, for example they get an extra 2.5 percent contribution from the government for the provident fund [pension contribution] that our members don’t get.

ALU How do you feel about the grading structure review the government is suggesting, and are there any other issues you would like to comment on?
LCT Under present circumstances the grading review should not be undertaken, as it will not be favourable towards civil servants, but the disciplined service unions support the government plans for it.
On downsizing. If the government reduces the size of the civil service, society will suffer. Youth and university graduates won’t be able to find work in the government. Now civil servants have lost hope in the government because they can no longer gain promotion - when many senior jobs become vacant, the jobs just disappear. Downsizing could cut civil service personnel from 180,000 to maybe 120,000.
The whole employment system has changed beyond recognition - the process is now three years on contract then three years probation, and even after these six years, staff may still not be permanent.
When Hong Kong’s Financial Secretary visited Hong Kong University, a student asked him why he wanted to cut pay for civil service staff. The FS replied that all workers in banks are now working longer hours for less money, and he said that if this is good for the private sector, then it is good for the public - he is an ex-banker. But we say it is bad for health to work regularly into the night, and this affects society’s health as a whole.
We strongly object to the government’s proposed sales tax [VAT] too, as it always hits the poorest hardest. meanwhile tax on company profit in Hong Kong is among the lowest in the world.

Thomas Cheuk Shing Tak,
Chairman, Union of Hong Kong Post Office Employees.
12 March 2002

ALU What is the make up of the union?
TCST We have about 1,800 members. These are from all grades, including management, postal officers, and uniformed staff. The union represents about one third of eligible workers.

ALU What is the union’s reaction to the government’s recent proposal to cut Civil Service pay.
TCST The government has proposed to cut our pay by 4.75 percent. We are currently in discussions with other Civil Service unions through the CTU [Hong Kong Confederation of Trade Unions]. Each time people say Civil Service pay is higher than the private sector’s. But they don’t realise that our pay increases one year at a time. When we first start work, pay is rather low; it takes many annual increases before we reach the maximum, which is an OK rate of pay, but this is not the rate all workers receive.
The economic situation is not very good and maybe the government’s finances this year have a problem - but reducing civil servant’s pay is not the proper or the best the way to solve the problem. If the government wants to improve the financial situation it should try to get more investment to create jobs then it will improve the economy of Hong Kong, and the government finances will also improve.

ALU Where should the government get the money to invest?
TCST They should try to attract investment from overseas. They should not borrow money from the IMF or World Bank, but sub-contract work instead.

ALU Have you had a meeting of union members for reaction to the pay cut announcement?
TCST We have not yet had time to arrange a meeting of our members, though we have had some discussions.

ALU What is the feeling you are getting from the staff about a pay cut?
TCST Most of them are not happy. Cutting our salary is not the best way to improve the government’s finances. We think it is just an excuse for capitalists to lower their employees’ pay. Once they cut civil service pay, the salary of workers in the private sector will follow. We want to discuss with other unions and the CTU the best way to educate workers and the public - the cut in salary is not the way. It undermines confidence and stability within the civil service - civil service stability is very important for Hong Kong.

ALU When I first arrived in Hong Kong over three years ago, Tung Chee-hwa [Hong Kong government’s head] was talking about the privatisation programme. I understand that as a Human Resource Management strategy, this has led to an intentional imbalance in how workers are paid? Are there different rates of pay for workers doing the same jobs for the Civil Service?
TCST Yes and it is a big problem for us. This is most obvious with contract staff who only receive about two thirds of permanent staff’s pay. We now have contract staff doing work for the Civil Service who only make HK$8,000 or HK$10,000 for work that an equivalent civil servant makes HK$12,000 per month, doing the same job. Regular staff have annual pay increases, remember the HK$12,000 I am talking about is starting pay for civil servants, but contract salaries are fixed by their contract. Contracted out work includes transport of mail. And contract staff have different rates of pay. Also they cannot join the union because my union constitution states that only civil servants can be members, so it would have to be changed before we can recruit contract staff.

ALU Will you change the constitution?
TCST We are having discussions to change the status of members. Next Saturday is our Annual General Meeting and we will try to change the constitution then. There is no need to change the name of the union for us to absorb the staff. But changing it is not simple because contract and non-contract staff have conflicts between them, and we have many complaints from our members. Yes our permanent staff want contract staff to be permanent also. This would solve many problems. For example if contract staff work overtime they are on different rates of pay. As contract staff numbers increase, jobs of permanent staff decrease. Also contract staff have no health insurance; if they have sick leave it means no pay; for annual leave, after one year they can have four to seven paid leave days per year. They get one rest day a week.

ALU Is increasing the number of contract staff a way to attack the union?
TCST Not really. The main reason the government wants contract staff is to lower costs. Over the last few years, the number of staff taken on for the Postal Officer grade is about thirty; uniformed staff is also around thirty. All we know is the central government wants zero growth in permanent staff. The civil service has recruited not many staff this year. There are around 1,500 contract staff, and the number is set to increase. This year. We expect the Post Office to use more contract staff this year. This is the trend. For example one month ago, Japanese postal workers who visited us said that over half of their 3,000 staff are contract workers, and we see the Hong Kong Post Office doing the same thing because it has made a HK$37 million loss this year.

ALU There have been many references in the media recently to the cost of living falling in Hong Kong, the implication is always that a wage cut wouldn’t hurt workers. What do you think?
TCST I don’t believe the overall cost of living is decreasing. Maybe some food items, but housing and travel are still very expensive and increasing.

ALU I have looked at the government’s Web site. Its retail price index (RPI) is split into three sections for some reason - basic necessities should be the same for everyone, but this RPI is divided up along class lines, depending on how much you earn. Does any organisation independent of the government monitor the government’s estimation of the RPI and challenge it?
TCST Maybe the CTU monitors the RPI. Anyway we don’t believe the government’s RPI statistics. But what we are really worried about is not the pay cut, maybe by the end of this year the government will review the Civil Service structure so that it can reduce the number of staff.

ALU How can you stop them from making staff redundant?
TCST We have to work with other unions especially those in the Civil Service to resist staff cuts. We must educate our members and private sector unions about what will happen under down-sizing. We need education before action.

ALU What about bad public relations from the media? Popular newspapers like The Sun [Tai Yang Bao] and radio phone-in programmes regularly say that there are too many civil servants sitting around doing nothing and earning too much money. It is then very easy for ordinary people to repeat such things when they don’t know the truth.
TCST Last week we had a joint meeting with other unions to discuss this problem. We want to use the media to express our viewpoint and our fears for the future.

ALU But how will you persuade media editors to repeat your viewpoint?
TCST Law Ping [HK Professional Teachers’ Union] is responsible for this. Soon the members will discuss the salary cut. Maybe we will have a positive solution. At a meeting last week civil service representatives were more worried about the Civil Service review than the pay cut. The structure will change and a pay survey will have a bad effect on our whole pay structure. The salary cut has implications for other countries too. The Union Network International (UNI) Asia Pacific Regional Secretary will arrive for a meeting to discuss this issue tonight.

ALU Any other challenges looming for you?
TCST It seems that retirement standards will change. Under the present system we retire at 55 years of age, but a new system we hear about will retire people at 60. The retirement lump sum and pension will change too. The current lump sum of HK$600,000 will double to HK$1,200,000; whereas the monthly pension will fall from HK$15,000 to HK$7,000.

Source: ALU Issue No. 42, January - March 2002