10 MAY '93 10:26
H M TREASURY HEF DIV
LCONFIDENTIAL
at the mischief
F.10
which the concept of dirence
brence because compensation is aimed is the loss of career (see for example, If that career is not paragraph 17 of the 1960 White Paper). actually lost altogether there is less to compensate for.
HMOCS are still losing the Secretary of State's course, protection etc and their promotion prospects may perhaps be less than what they were but that is reflected in the fact that they are still to be paid 50% of the traditional scheme.
Of
The other reason, which I gather may be more dominant in the minds of HMT, is that Hong Kong HMOCS are better off than were their colleagues in other territories. Because of their much higher remuneration and more satisfactory terms and conditions and circumstances generally, it is less appropriate to pay them as much as had been appropriate in the case of their less advantaged colleagues elsewhere. I think that this reason may well be open to successful challenge, if it forms part of HMG's reasoning on the compensation aspect of the scheme rather than its incentive aspect. Although HMG has a large amount of discretion, it must be remembered that paragraph 6(6) of the 1954 WP requires there to be 'compensation'. That is its purpose and HMG are constrained to treat that as its goal: see, for example, the reference, in paragraph 13 of the 1960 Paper to paragraph 9 (where the word 'compensation' is used in (e)) and the broad objectives. It is not a scheme to guard against financial hardship at an absolute level, it is a scheme to compensate Therefore, people for what they have lost or are to lose. someone who stands to lose a more remunerative or otherwise more covetable career than a colleague elsewhere, stands to lose more than that colleague has lost and therefore needs a commensurately higher payment to adequately compensate him for his loss. say that Hong Kong HMOCS stand to lose more, therefore they should be paid less in compensation, could be held to be so flawed in logic and to run so contrary to the purposes of the scheme as set out in the White Papers, that it amounts to HMG taking account of an irrelevant factor or acting irrationally.
If HMG believe that the existence of the retention provisions of the Joint Agreement would, on their own, justify a 50% reduction,
In it would be best to take the decision on that basis alone. that case, the scheme would, in my view, be very difficult to challenge, although a cast iron guarantee can never be given.
I shall be available throughout tomorrow, should you wish to discuss this by telephone, and I shall hold myself available to attend the meeting at the Cabinet Office on Monday afternoon, should my presence be thought desirable. Please note that I shall be in HMT for an unconnected meeting from 11 am on Monday.
yans sincerely умно
Charles Bautor
CN BARTON
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