3.11 Audit has recommended that the governing body of each institution should:
(a) before the establishment of a new remuneration system under the government initiative to delink the university pay from the civil service pay, ensure that the relevant FSTB guidelines are followed for the provision of contract gratuity, i.e. at a rate of no more than 10% of the basic salary for the award of new contracts, as well as for the renewal of contracts, for the general administrative and support staff (see para. 3.10 above); and
(b) in developing a new remuneration system for its institution, critically review the scope for reducing the contract gratuity rate for their staff, in the light of the current employment market situations (see para. 3.10 above).
Response from the Administration and the institutions
3.12 The Secretary for Education and Manpower has said that he agrees with Audit’s recommendations on contract gratuity (see para. 3.11 above).
3.13 The Secretary for Financial Services and the Treasury has said that, following the decision of the Chief Executive in Council to remove the subvention guideline premised upon the “no better than” principle, he will promulgate the removal of the relevant FSTB guidelines on contract gratuity for subvented staff.
3.14 The Secretary-General, University Grants Committee has said that the UGC envisages that under a delinked environment, the institutions are free to devise their remuneration packages to suit the employment market situations. In the interim, the institutions should observe the FSTB guidelines, subject to legal and contractual obligations being met.
3.15 The Vice-Chancellor, The University of Hong Kong agrees with the audit recommendations on contract gratuity. He has said that:
(a) the retention of the 15% contract gratuity rate for the majority of the appointees employed on fixed-term contracts on a salary below MPS 34, notwithstanding the FSTB guidelines in May 1999, is to maintain parity with the HKU’s contributions to retirement benefits of appointees on substantive terms and the majority of local institutions in terms of recruiting and retaining the best appointees;
(b) he agrees with the audit recommendation in paragraph 3.11(a) above, in spite of the Government’s proposal of delinking institutional pay from the civil service salary scales from 1 July 2003 (which would allow institutions, including the HKU, to set their own terms and conditions of service). With immediate effect, the HKU has reduced the contract gratuity rate to 10% in normal conditions during the interim period; and
(c) regarding the audit recommendation in paragraph 3.11(b) above, the HKU agrees that the review of the contract gratuity rate for different types of contracts will be among the areas to be considered, should the Government’s delinking proposal from the civil service be accepted by LegCo (which will result in the HKU requiring to establish its own system to determine pay and conditions). Factors such as market conditions, the need to recruit and retain the best appointees (in particular the best scholars), and the HKU’s financial and operating positions will be fully considered. As recommended by the recent review of governance and management of the HKU, there will be a need to set up a remuneration committee and to appoint a professional Director of Human Resources with appropriate qualifications and experience. Their major tasks will be to look at the status quo and how to set up new systems and processes in a deregulated environment.
3.16 The Vice-Chancellor, The Chinese University of Hong Kong has said that he appreciates Audit’s advice to review the scope for reducing the contract gratuity rate for the CUHK staff, in the light of the current employment market situations. He has also said that:
(a) in 1999 when the UGC referred the FSTB guidelines on contract gratuity to the institutions for reference, the CUHK did not implement the revised gratuity rate
immediately. At that time, the CUHK noted that there were going to be more changes in the civil service terms and benefits, and therefore decided to wait for the Government’s decision on such revisions in order to implement all changes in one go to avoid multiple sets of terms for staff joining at different times of the year;
(b) since 1 January 2003, the CUHK has reduced the rate of contract gratuity to 10% for Terms of Service (B) and equivalent staff. The revised rate applies not only to those who are not on “professional” rank, but also those “professional” staff below MPS point 34;
(c) a flexible arrangement is already in place in the self-financing units of the CUHK, where the gratuity provision is based not purely on the length of service, but a portion of which is performance-linked and will be released to good performers only; and
(d) the CUHK will conduct continuous review on the subject.
3.17 The President, The Hong Kong Polytechnic University has said that:
(a) it has been the PolyU’s policy to appoint all non-professional and supporting staff on superannuable terms of service with 15% employer contribution. This category of staff was only appointed on contract terms with an end-of-contract gratuity as a transitional arrangement in response to retirement funding issues and budgetary uncertainties. In view of the then impending civil service reforms of the terms and conditions of service which might have some bearing on the university remuneration package, the level of gratuity was retained at 15% to maintain parity with sister institutions; and
(b) nonetheless, the PolyU will critically review the level of contract gratuity in conjunction with the impending review of the remuneration package.
3.18 The President, City University of Hong Kong has said that the current gratuity rates for different categories of staff in CityU are already in line with the FSTB’s guidelines.
3.19 The President, The Hong Kong University of Science and Technology has said that he has no specific comments on contract gratuity.
3.20 The President and Vice-Chancellor, Hong Kong Baptist University has said that he has no difficulty with accepting Audit’s recommendations in paragraph 3.11 above, since the HKBU is already practising what are being recommended therein. He has also said that:
(a) the HKBU had actually taken the initiative to reduce the gratuity for non-professional and support staff to 10% in January 1999; and
(b) in devising the new pay packages upon delinking, he does not envisage a departure from the current practices, unless in some cases (expected to be few) market force considerations could justify making exceptions.
3.21 The President, The Hong Kong Institute of Education has said that the HKIEd Council has already approved changing the rate of gratuity for non-academic staff remunerated at MPS point 33 and below to 10% of their basic salary. The change will apply to all such new staff effective 1 April 2003 as well as to all such serving staff upon their contract renewal from 1 September 2003 (see para. 3.11 above).
3.22 The President, Lingnan University has said that regarding paragraph 3.11(a) and (b) above, the LU is in the course of reviewing its staffing systems and the gratuity arrangements for all staff will be revisited.
PART 4: ADMINISTRATION OF LEAVE
4.1 This PART reviews the administration of leave in the institutions and examines areas where improvements could be made.
Background
4.2 Except for salaries (see PART 2), the terms and conditions of service for staff of the institutions do not need to be formally approved by the Government. However, in accordance with the UGC Notes on Procedures, the terms and conditions of service of the staff of the institutions were subject to the guiding principle that they should be broadly comparable to, and no better than the civil service terms.