CONFIDENTIAL
Two separate compensation schemes, funded by the Hong Kong Government, nave ceen set up for those directed to retire from for especially sensitive positions, and for those passed over promotion to make room for local staff. It is possible that the Hong Kong Government will introduce a general right of early retirement, which would benefit HMOCS staff along with others. But the FCO judge it inconceivable that they would contribute to That would be funding any compensation and safeguard scheme. seen as spending Hong Kong money to provide favourable treatment for expatriates, and risk Chinese complaints of asset stripping.
Compensation
The FCO initially envisaged a scheme designed
designed both to compensate staff for loss of career prospects and removal of the Foreign Secretary's protection and, by limiting the amount of compensation payacle at the time of transfer of sovereignty, to give an incentive to continue serving after 1997. But the HMOCS Association in Hong Kong argued successfully that it was unfair
put
on staff pressure
to continue
an alien serving administration. Consequently it is now the intention that all staff committed to serve up to the transfer in mid-1997 should qualify for full compensation.
3.
compensation
be
The FCO
that propose
should payments calculated by reference to salary, age and length of service, using the same Government Actuary-calculated multipliers as have been used in previous cases. But the payments would be subject =0 a cap of £120,000 (at 1992 prices). The principle of a cap is not new, although the Governor considers the proposed level artificially low, since it would affect
75
per cent of staff. The Treasury agree with the methodology and the cap. they would cut the multipliers by half.
some
But
9.
The Treasury base arguments:
their
case for
half-factors
on three
a.
The Joint Declaration with China enables staff to stay in their jobs after 1997 on the same terms and conditions
that (save
some 30 of the most
be senior posts will reserved for local officers). Since their careers are not lost altogether, there is less to compensate for.
b.
Staff in Hong Kong, unlike those in other Dependent Territories have always been aware of the date on which the
CONFIDENTIAL
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