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PUBLIC RECORD OFFICE

Reference :-

ELENCO. 882/11

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

that the Salaries Committee, when it ultimately reports, may propose modifications in the scheme which might not be acceptable to the Government. In that event I would write to you again. For the present it seems necessary to await the report of the Salaries Committee. The Chairman of the Committee (who is an Official Member of the Council) has been asked to use every endeavour to expedite the preparation of this report, but I doubt whether it will be in his power to accelerate progress very effectively.

7. As regards the second point, I shall be glad to have your ruling on the question which Mr. Fletcher undertook to refer to you-namely, what is the position of the Governor under Ordinance 6 of 1905, and how far is it permissible for him to authorise payment of pensions, retired allowances, and gratuities involving a new charge upon the revenue without obtaining the prior approval of the Legislative Council.

8. The question is one of some difficulty. It seems to me incontestable that, under any constitutional change, public officers who at the date of the change were in the Service of the Administration concerned should be protected against loss or pairment of their then existing and accruing rights. Provisions in this sense will be find in the South Africa Act, 1909, and in the present Constitutions of Southern and Northern Rhodesia. It is unfortunate, perhaps, that similar provision was not made here in explicit terms when the Ceylon (Legislative Council) Order in Council, 1923, transferred-subject only to the Governor's powers of certification, disallow- ance and financial initiative-the effective power of the purse from a Legislative Council in which the Governor was in a position to enforce his policy to a Legislative Council in which the majority of members were to be unofficial and elected. I would urge emphatically that in any future constitutional instrument applicable to this Colony a clause should be inserted safeguarding the existing and accruing rights of public officers who had entered the service prior to the commencing date of the new con- stitutional arrangements. At present, in the absence of any such explicit provision, it would presumably be the duty of the Government to resist and to prevent, if necessary by the exercise of the Governor's reserved powers, any withdrawal or diminution of the existing and accruing rights of public officers.

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9. The question might, no doubt, be asked whether any right, properly so described, to a pension can be said to exist here at present. Section 1 of the Pensions Minute states definitely that "Public Servants have no absolute right to any pension or, allowance under these rules," and Section 2 is framed throughout in permissive

entitled to pension (not in mandatory) terms. But in other sections the words occur, and I submit that it would not be equitable or in accordance with established practice to exclude a claim to a benefit under the provisions of the Pensions Minute from the category of the existing and accruing rights which are entitled to protection. You will remember that in the Territories of the South African High Commission (having regard to the possibility of the transfer of their administration from the Imperial to the Union Government) the permissively expressed Pensions legislation was replaced a few years ago by new Pensions Proclamations framed in mandatory terms. I submit that the recognition of a right to pensions which was thus conceded to the public servants of Basutoland, Swaziland and the Bechuanaland Protectorate should not be denied to the public servants of Ceylon, and for the purposes of this despatch I will therefore postulate the existence here of a right to the benefits covered by the provisions of the Pensions Minute, though I think that it may eventually become necessary to express the right in legally valid form.

10. Sir Hugh Clifford's view, if I understand it correctly, appears to have been that the rights of public servants under the Pensions law did not extend beyond such benefits as were already provided for in the Pensions Minute, and I find the following no matter what the legal powers con- sentence in one of his relevant office-minutes: ferred by the Pension Ordinance may be, it would be entirely opposed to the whole spirit and intention of the present Constitution were the Government to attempt to make amendments to the Minute, the effect of which would be to impose new charges upon the public revenue, without the consent and approval of the Legislative Council being first obtained."

11. The line of argument advanced in the memorandum of the Civil Service Association (with which the Public Service Association has associated In the light of that memorandum itself) proceeds from a different basis.

and of my conversations with the Committee of the Civil Service Associa- tion, I take their contention to be that, having entered a service of which, inter alia, the pension conditions were determined and determinable solely by a Governor responsible to and controlled by the Secretary of State, the present public officers of the Colony are entitled, subject to good conduct and efficiency, to claim as

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an existing and accruing right the preservation of that disposition of authority. If the Pensions Minute could not be amended in any substantial respect without prior con- sultation of the Legislative Council, and if the ultimate decision were to be affected by the result of such consultation, the effective supreme control over pension conditions would pass from the Secretary of State to the Legislative Council, and the public officers (in respect of pension conditions at any rate) would be transferred from dependence upon the Imperial authority, under which they had agreed to serve, to dependence upon a local authority, to which they had never agreed to subject themselves.

12. The Committee of the Civil Service Association specially called my attention to the wording of Section 2 of Ordinance No. 6 of 1905, which provides that " not- withstanding the repeal of the above-mentioned Ordinances, it shall be lawful for the Governor to issue his warrant for the payment of the several pensions, retired allowances, and gratuities which have been already granted or which may hereafter Under be granted in conformity with the provisions contained in the Minutes of Government relating thereto now in force, or which may hereafter be made and issued." this section there is no requirement that the Legislative Council should participate in any amendment of the Pensions Minute or in the appropriation of funds for the pay- ment of benefits authorised by the Minute or any amendments of the Minute. There would seem to be no illegality in appropriating such funds by Governor's Warrant. But, on the other hand, I see nothing in the Ordinance to preclude the adoption of the alternative method of appropriation under authority given by the Legislative Council, and if-as has been suggested-death gratuities could not be regarded as benefits covered by the provisions of the Ordinance, reference to the Legislative Council would The question whether or not death actually be necessary in respect of them. gratuities on the lines proposed in the amendments now under consideration are covered by the provisions of Ordinance No. 6 of 1905 is a point of law upon which I should be glad to have an authoritative ruling.

13. For the moment it will suffice to consider the principle enunciated by Sir Hugh Clifford and the contention advanced by the Civil Service Association in their bearing upon amendments of the Pensions Minute which confer benefits unques- tionably covered by the provisions of the Ordinance. I am impressed by the argument that the transference of the ultimate decision upon alterations in the Pensions Minute from a purely official European authority to a predominantly political Ceylonese authority is a change important enough to raise a serious question of its consistency with the preservation of existing and accruing rights. Some such transference is involved in the application of Sir Hugh Clifford's principle that the prior consent of the Legislative Council must be obtained to amendments of the Pension Minute which would have the effect of imposing new charges upon the public revenue, and the Civil Service Association would seem to contend that there was and is no necessity thus to interfere with their rights, inasmuch as procedure involving no such interference is authorised by Ordinance No. 6 of 1905.

14. I suggested to the Committee of the Civil Service Association that, although the Government would presumably feel bound to protect public officers now in the Service against any deprivation of benefits actually provided for in the Pensions Minute, the grant of increased or additional benefits was, for practical purposes, in a different position. It seemed to me unlikely that a Secretary of State would approve of an amendment of the Pensions Minute entailing any considerable new charge upon the public revenue, and that he would authorise the Governor to appropriate the necessary funds by Warrant, unless there were a reasonablé assurance that this would not provoke serious conflict with the Legislative Council. I thought that a Secretary of State, before giving his final sanction, would probably instruct the Governor to satisfy himself as to the eventual acquiescence of the Council; that in ordinary circum- stances the Governor would have no means of so satisfying himself without some formal reference to the Council or its Finance Committee; and that, if a due regard for the existing and accruing rights of public officers were held to preclude such reference, there would be little or no prospect of obtaining the Secretary of State's final sanction. The members of the Committee, if I understood them correctly, seemed to think that, if the Secretary of State considered a proposed amendment to be one which on merits was justified and desirable, he might be expected to allow or cause it to be made through the machinery provided by Ordinance No. 6 of 1905, and to support the Governor in dealing, if necessary by the use of his reserved powers, with any difficulties to which such action might give rise in the Legislative Council. Whether this anticipation or whether the apprehension expressed by me is correct will appear from your reply to the second question asked in the memorandum of the Civil Service Association.