SECRET
FM HONG KONG
TO IMMEDIATE FCO
TELNO 1222
OF 231045Z JULY 93
SECRET
218 102371
MDHIAN 9874
Enter
TOP COPY Q DIST?
jesl?
PERSONAL FOR MORRIS, HKD FROM PS/GH
217
YOUR TELNO 701 : HMOCS
1. THANK YOU FOR THE SITREP AND INDICATION OF THE WAY FORWARD. WE HAVE THE FOLLOWING COMMENTS:
COMPENSATIONS SCHEME
2.
THIS SOUNDS MORE ENCOURAGING. WE BELIEVE THAT A GENERAL COMPENSATION SCHEME ALONG TRADITIONAL LINES WITH A CAP OF POUNDS 120,000 AT 1991-92 PRICES AND USING FACTORS ABOUT 20 PERCENT LOWER THAN THE HIGHER FACTORS IN OUR LIMITED COMPENSATION SCHEME (LCS) COULD BE PUT TO THE HMOCS ASSOCIATION. THE JUSTIFICATION WOULD BE THAT THE GENERAL COMPENSATION SCHEME, UNLIKE THE LCS, DOES NOT INVOLVE COMPULSORY RETIREMENT AND THE SLIGHTLY LOWER FACTORS ARE ON A PAR WITH THOSE IN MORE RECENT HMOCS GENERAL COMPENSATION SCHEMES (FIJI AND THE WESTERN PACIFIC) ELSEWHERE. WE DOUBT THAT REFERENCES TO THE JOINT DECLARATION PROVISIONS FOR CONTINUITY OF EMPLOYMENT WILL IN REALITY PROVE HELPFUL, BUT WE AGREE THAT SMALL IMPROVEMENTS TO DETAILED ARRANGEMENTS, SUCH AS ONE, OR AT MOST TWO, LUMP SUM PAYMENTS WOULD ASSIST.
3. HOWEVER WE WOULD WISH TO RE-EMPHASISE OUR VIEW THAT ACCEPTANCE OF THE LOWER TRADITIONAL FACTORS FROM HMOCS COMPENSATION SCHEMES ELSEWHERE SHOULD BE IN RETURN FOR TREASURY ACCEPTANCE OF THE STERLING SAFEGUARDS AND SPOS ELEMENTS OF THE PROPOSED HMOCS PACKAGE.
STERLING SAFEGUARDS
4. WHILST WE ACCEPT THAT THERE IS SOME SCOPE FOR NEGOTIATION ON THE MECHANISM FOR A STERLING SAFEGUARD, AN EXCHANGE RATE OF 16:1 REMAINS OUR BOTTOM LINE. AS YOU ARE AWARE THE HMOCS ASSOCIATION WILL ARGUE FOR A SIGNIFICANTLY BETTER EXCHANGE RATE AND WE DO NOT BELIEVE THAT ANYTHING WORSE THAN 16:1 CAN BE PUT TO THE ASSOCIATION FOR CONSULTATION AS PART OF THE PACKAGE TO SECURE SUCCESSFUL RESOLUTION OF THE HMOCS ISSUE.
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