The top court's ruling yesterday that civil service pay cuts are lawful is a sensible judgment that should pave the way for wider reform of Hong Kong's overstaffed and inefficient government bureaucracy.
The five justices held that laws passed to enable three pay reductions since 2002 were constitutional. Civil servants had argued that the ordinances breached Articles 100 and 103 of the Basic Law. The first guarantees that their terms of employment will be no less favourable than before Hong Kong returned to China in 1997. The second states that the pre-handover system of the civil service shall be maintained.
The Court of Final Appeal ruled that under the Basic Law, the government has the power to legislate a reduction in civil servants' pay. It also ruled that the stipulated continuity of the civil service system does not mean that no element of it can ever be changed. The justices, in effect, rejected the narrow interpretation of the constitution pursued by civil servants and advanced a view of the Basic Law as a flexible, living document. Their ruling is also consistent with the language of the mini-constitution.
This is the correct approach. It is not only unreasonable but unrealistic to suggest that every aspect of the civil service system should remain frozen in time for 50 years. This was not intended by the drafters of the Law.
Over the past eight years, Hong Kong has undergone significant changes, but there is a widespread perception that the civil service remains mired in old ways and has an old mentality. In order to manage the city's affairs more effectively, it must catch up with the times - fast.
When the suggestion to cut public-sector pay was first floated, Hong Kong was in the grip of a long recession and a deflationary spiral, which were putting intense downward pressure on businesses' profits and their employees' wages. The weak economy was also pushing the government's budget deeper and deeper into the red. Yet the civil servants continued to receive annual pay rises.