CONFIDENTIAL

Staff Pay Disputes

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7. The Hong Kong Government experienced a rash of small disputes with civil servants and related unions. Though the industrial action involved was small scale by most standards it was unusual for Hong Kong. It was concluded that the fault lay partly with failure of staff relation resources to keep pace with expansion in many sectors of the public service, and partly with anomalies in relativities that had developed since the last Salaries Commission in 1971. More attention is being paid to staff relations and management, but the major and massive problem of relativities and pay scales was handed over to a new independent Standing Commission on Salaries and Conditions of Service. The Commission has a highly competent membership and is ably chaired by Sir Y K Kan. It got down fast to its mammoth task, and its awards have done much to assuage staff dissatisfaction. It is hoped that it will come to be accepted as an authoritative body, and that its availability will do much to remove friction between staff and management.

Vietnamese Boat Refugees

8. The arrival of boat refugees from Vietnam was the most dramatic and tragic event of the year. In the first nine months of the year about 70,000 of them reached Hong Kong how many died on the sea passage it is impossible to say, but probably at least 30,000 or more. They were landed as transients, and housed in specially erected or converted camps. In May and June there were days on which as many as 1,000 arrived in their leaky and overcrowded boats. None were turned away. No-one who saw the teaming sheds where arrivals were processed, or the packed boats awaiting their turn to land, will ever forget the sight. The strain on the public services was immense and the implications of the flood continuing at this rate really frightening. Against this background the Geneva Conference, under the vigorous prompting of HMG, and the result of it the halting of the exodus, the mounting of large resettlement programmes, and provision of funds for UNHCR - came as an enormous relief. During the last quarters of the year and the first months of this year, the traffic has been reduced to a trickle. Resettlement has been disappointingly slow, and at the end of March 47,000 were still here with a prospect of little more than 3,000 departures a month during the year. Providing there is no further

CONFIDENTIAL

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