TNAG-0991-FCO40-1210-Policy-on-salaries-and-pensions-for-civil-service-in-Hong-Ko-1980 — Page 334

ADVICE CONCERNING RELATIONSHIP BETWEEN CROWN AND ITS SERVANTS IN HONG KONG, AND IN PARTICULAR, SUSPENSION UNDER C.S.R. 611

1

In my opinion the Government has a very good prospect of legally

justifying the Suspension of Dispensers under C. S. R. 611, and could justify

further use of other Government Regulations similar to C.S.R. 611. This, I

am afraid, although touching upon this matter, leaves unanswered for the

moment the much more difficult question of the validity of the Colonial

Regulations and G. R.'s in a general sense. On close scrutiny I am now firmly of the belief that CHOI Sum and Others v. A.G. [1976] HKLR 609 ("The Demarcator's case") was in part wrongly decided. In my view, that

part of the Crown's argument which sought to justify the deduction of pay

as the exercise of a contractual right, relying upon C.S. R. 610 as having been imported into the contract of employment, (as was the decision to

Appeal on this as the sole ground) was based on a fundamental misconception (1)

As a note of explanation, if not mitigation, it must be appreciated that this

is a most esoteric branch of the law where decisions of the highest Courts and

most distinguished judges have differed, been overturned, or remain difficult

to reconcile. In my respectful view, Cons J's essential error was in his

conception of the Privy Council's judgment in Kodeeswaran v. A.G. of Ceylon [1970] A.C. 1111. Of that case his lordship states

"I should say that whatever views may have been held earlier

it is now well settled that the relationship between the Crown and its servants is one of simple contract my emphasis].

The comments of the Privy Council in Kodeeswaran v. A.G. of Ceylon

have put this beyond doubt. But each contract is subject to the

overriding power of the Crown to dismiss at will. It is a term

implied by law, unless that term is expressly excluded".

This view may perhaps be traced to the opinion of Goodstadt and Li, the

(2) authors of a widely known academic article on the subject,

who say:

"The Privy Council established in Kodeeswaran v. A.G. of Ceylon

that the Crown's relationship with its Servants is contractual".

The Kodeeswaran case concerned a Crown Servant in the Civil Service

of the Government of Ceylon. He was employed under a contract which, unlike those of the parties in earlier cases, contained an express provision as to

(1) In fairness, it appears that the "Contractual" argument was very

much a subsidiary one.

(2)

"The Iron Rice Bowl!!

Hong Kong Law regarding the Crown's Relationship with its Servants. 4 HKLJ (1974) p. 22, Leo Goodstadt & Andrew Li.