2003 legislation behind a negotiated deal with unions is ruled unconstitutional
The government yesterday lost a second key legal battle on civil service pay cuts, with the Court of First Instance ruling that legislation enacted in 2003 to facilitate a negotiated deal with unions was unconstitutional.
In November last year, the Court of Appeal found that pay-cut legislation enacted in 2002 breached the Basic Law.
The 2003 law was enacted after the government dropped its annual pay-adjustment, based on a pay-trend survey, in favour of negotiating a package with staff unions. The deal set out a pay freeze for one year, followed by cuts averaging 3 per cent in 2004 and 2005.
In his judgment, Mr Justice Michael Hartmann said he was bound by the upper court's ruling to find that the 2003 legislation was also inconsistent with the 'no less favourable' clause on working conditions, in Article 100 of the Basic Law. The clause means pay scales cannot be reduced to below their levels at the 1997 handover.
But he dismissed a new argument that the decision to drop the pay-trend survey breached Article 103, which supports the continuity of public-service management.
'I do not find the conduct of a pay-trend survey to be so inherent to the established system of determining pay adjustments that a failure to conduct a survey will of itself, no matter what the circumstances, constitute a breach,' he said.
