Annual Pay Adjustment

Civil Service salary adjustments are considered annually. Under the established annual civil service pay adjustment mechanism, the Government decides on the size of the annual adjustment having regard to the following factors: net pay trend indicators (PTIs) derived from the annual pay trend survey (PTS), the state of the economy, changes in the cost of living, the Government's fiscal position, the Staff Sides' pay claims and civil service morale.

The purpose of the annual PTS is to track the year-on-year pay movements in the private sector. The survey produces the gross PTIs, which represent the movements in private sector pay for the three salary bands during the period from 2 April of the previous year to 1 April of the survey year. The payroll cost of civil service increments (expressed as a percentage of the total payroll cost for each salary band) is then deducted from the gross PTIs (which take into account additional payments such as year-end bonuses) to produce the net PTIs.

The PTS is commissioned and overseen by the Pay Trend Survey Committee (PTSC) and results of the PTS are subject to its validation. The Chairman and Alternate Chairman of PTSC are nominated from members of the Standing Commission on Civil Service Salaries and Conditions of Service (Standing Commission). The PTSC also comprises representatives of the Standing Committee on Disciplined Services Salaries and Conditions of Service, the Secretary General of the Joint Secretariat for the Advisory Bodies on Civil Service and Judicial Salaries and Conditions of Service, Staff Sides representatives of the central consultative councils and the Administration.

On 13 March 2007, the CE-in-Council endorsed an improved methodology (PDF format) of the PTS, under which smaller companies with 50-99 employees are included in the survey field of the annual PTSs and a gross-up factor of 25% is applied to these companies. The CE-in-Council also decided that the 2007 PTS (covering the period 2 April 2006 to 1 April 2007) should be conducted based on the improved methodology. This represented the outcome of months of extensive consultation with Staff Sides representatives.