Just over 170,000 civil servants in upper, middle and lower salary bands and the directorate are expected to be affected.
Hong Kong's Civil Service Bureau (CSB) announced on 8 June that it had made a proposal to a committee appointed by the government to freeze salaries of all civil servants for another year, effective retrospectively from 1 April, 2021.
Just over 170,000 civil servants in upper, middle and lower salary bands and the directorate are expected to be affected. Per government data as at 30 June 2020, the civil service employed about 177,300 people (excluding judges, judicial officers, officers of the Independent Commission Against Corruption and locally engaged staff working in overseas Hong Kong Economic and Trade Offices) or about 4.6% of Hong Kong's labour force.
The proposal was made after taking six factors into account: the net pay trend indicators, the state of Hong Kong's economy, changes in the cost of living, the government's fiscal position, the pay claims of the staff side, and the civil service morale.
"There are unfavourable and encouraging factors at the same time as far as the state of the economy is concerned. While the unemployment rate still stands at a high level, the state of the economy has shown a clear trend of recovery," a CSB spokesperson explained.
Notably, real gross domestic product (GDP) is forecast to grow by 3.5% to 5.5% in 2021, and real GDP resumed appreciable year-on-year growth of 7.9% in the first quarter of 2021.
"Although the COVID-19 epidemic in the past year has had a great impact on various industries in Hong Kong, labour market conditions will likely improve in the period ahead as the economy continues to recover, particularly so if the epidemic remains well contained. Local inflation may go up slightly alongside the recovering economy."
"The CE-in-Council will make a decision on the 2021-22 civil service pay adjustment after considering the response from the staff side and in accordance with the established mechanism," the spokesman added.
Further, the spokesperson expressed gratitude to civil servants, saying "the efforts and contributions in fighting the epidemic in the past year are worthy of recognition".