# Report of The Inter-Governmental Committee, Malaysia/Annex B

ANNEX B THE PUBLIC SERVICE
1. The arrangements for the Public Service have three main purposes: to provide for the proper functioning of the Federalised and State Departments in the Borneo States when Malaysia comes into being while preserving the existing terms of service of serving officers, to provide for the progressive Borneanisation of the State Departments and over an interim period of the Federalised Departments, and subject to these interim arrangements provide for the full integration of the Federalised Departments with the Federal Public Service as a whole. The means recommended for achieving these purposes are set out below.
Arrangements on the Establishment of Malaysia
2. When Malaysia comes into being, about one half of the posts filled by serving officers will be in Federalised Departments. The rest of the existing Public Services will be in State Departments, and the officers in these Departments will thus continue in State service with their conditions of service unchanged. Officers in Borneo Divisions IV and V and in Division III up to the maximum of scale C3 and equivalent grades N4 and P7 (except in respect of the Police) serving in Federalised Departments will also remain in State service; their conditions of service will be unchanged and they will be subject for all purposes of appointment, discipline, promotion and termination of service to the State Public Service Commissions.
3. Officers in Borneo Divisions I and II and scale C4 to 6 of Division III and equivalent grades N5-7 and P8-9 (except in respect of the Police) serving in Federalised Departments will be seconded for an indefinite period to the Federal Public Service. They will retain their existing conditions of service, including the application to them of the State pensions legislation and Widows and Orphans Pensions and Provident Fund legislation, and they will remain subject to the disciplinary control of their parent State Public Service Commission. It will be open to local and non-designated expatriate officers at any time to opt to transfer to the Federal Public Service and promotion will be conditional on transfer to that Service. Designated officers will not be eligible to opt to join the Federal Public Service and therefore their promotion will not be conditional on their transfer to that Service. Officers whether seconded, transferred or promoted to the Federal Public Service will not be liable for service outside the Borneo States save with their consent. Once an officer has transferred to the Federal Public Service he becomes in all respects subject the jurisdiction of the Federal Public Service Commission. Officers transferring to the Federal Public Service and officers newly appointed to Federalised Departments will serve on Borneo conditions of service until posted outside the Borneo States.
4. The Federal Government will be responsible for the emoluments of all officers serving in Federalised Departments and will pay all these officers direct. Until income tax throughout Malaysia is made uniform the remuneration of existing officers serving in Federalised Departments in the Borneo States will be subject only to income tax under the legislation in force in the Borneo State concerned.
The Interim Period
5. Borneanisation of the Public Services in the Borneo States is a major objective of policy. For a number of years to come special arrangements will be necessary to secure this objective and to protect the legitimate interests of the Native peoples. There are two problems: the preference to be given to Native over other candidates for State and Federalised posts and the laying-down of suitable schemes of service.
6. In relation to the State Service there will be provision in the State Constitution on the lines of Article 153 of the Federal Constitution to empower the State Government to prescribe, from time to time, the extent which preference will be given to Natives. The term "Native" will be defined in the Constitution by adopting—
Similarly the State Governments will prescribe in respect of the State Services their own schemes of service and decide how far external recruitment is needed. If such recruitment is needed the State may either make its own arrangements through the Department of Technical Co-operation or from any other sources acceptable to the Federal Government or ask for the help of the Federal Government. ​7. In relation to posts in the Federalised Departments Article 153 of the Federal Constitution will be construed as if Natives were substituted for Malays. The Yang di-Pertuan Agong will continue to exercise his powers under Article 153 on the advice of the Federal Cabinet, but in relation to the Borneo States there will be provision that such advice shall be given only after consultation with the Chief Minister of the State concerned. In relation to the Public Service as a whole (as distinct from the Federalised Departments in the Borneo States) Natives should be included with Malays for the purposes of the application of Article 153.
8. Until the Federal and State Governments agree otherwise, in filling posts in Federalised Departments in the States the full qualifications normally required by the Federal Government for candidates for each grade of the Service will be brought into line with the qualifications at present in force in the States. Instructions to the Public Service Commissions will provide that when a local candidate is in sight no vacancy will be filled except on a temporary or contract basis or by promotion of a serving officer.
9. To reassure officers seconded or transferred to the Federal Public Service, and to reassure officers in the States that Borneanisation will be given first priority in the Federalised Departments, the Federal Constitution will provide for the establishment of a separate branch of the Federal Public Service Commission in each State. Subject to the directions given to them in relation to Borneanisation and schemes of service, these branches will have full authority, except as provided in paragraph 2 above, in respect of all appointments, promotions and discipline in the Federalised Departments, saving that the discipline of seconded officers will be a matter for the State Public Service Commission. The Federal Government will undertake that the members of these branches will be the members of the respective State Public Service Commissions together with not more than two members of the Federal Public Service Commission nominated by the Federal Government. These arrangements will be subject to review five years after Malaysia Day. While they are in force the State Governments will consult the Federal Government before making any new appointments to the State Public Service Commissions.
10. Recruitment to Borneo Divisions IV and V and to Division III up to the maximum of scale C3 or equivalent grades will be by the State Public Service Commission for service in the State. Recruitment to and promotion to posts above this scale will be by the Federal Public Service Commission whether for federal service in the State or for federal service throughout Malaysia. To facilitate such recruitment and general liaison between the Federal and State Public Services, the Federal Government will establish branches of the Federal Establishment Office in the States.
11. New recruits to Federalised Departments and local and non-designated expatriate officers serving in these Departments who opt for liability to serve outside Borneo will receive equal consideration for promotion with officers throughout Malaysia who are similarly liable. Within Federalised Departments officers without this liability will be eligible for promotion within the area of their original service equally with officers who are so liable.
12. Certain problems also arise from the citizenship requirements under the Federal schemes of service. Many serving officers in the Borneo States are British subjects (and probably also citizens of the United Kingdom and Colonies) who were born in Hong Kong, Burma or other former British possessions in South East Asia; some of these officers may not qualify for Malaysian citizenship by operation of law immediately on the creation of Malaysia. The citizenship requirements of Federal schemes of service should not be applied to officers otherwise eligible to opt to join the Federal Public Service serving in Federalised Departments in the Borneo States on Malaysia Day. But in view of the traditional composition of the existing Borneo Public Services there will be further provision relaxing the citizenship requirements of the Federal schemes of service to the extent that it is the clear intention of candidates for service to obtain Malaysian citizenship they will be eligible for appointments on contract or other temporary terms. When they subsequently acquire Malaysian citizenship they will be eligible for permanent appointment with up to four increments on the salary scale, and the back-dating of their appointments for pension purposes only to the date of their original appointment on contract or temporary terms.
Designated Overseas Officers and Members of Her Majesty's Overseas Civil Service
14. There are about 630 overseas officers either designated by the British Government under the Overseas Service Aid Scheme or members of Her Majesty's Overseas Civil Service, serving in the two States. On Malaysia Day those servicing in Federalised Departments will, like their local colleagues in these Departments, be seconded to the Federal Service on their existing terms of service. They will not be eligible to opt to join the Federal Public Service. Subject to the overriding requirements of Borneanisation they will be equally eligible with their local colleagues for promotion within the Federalised Departments according to current service principles and the provisions of paragraph 11 above. Pensions legislation will need to be amended to make such promotion effective for the purpose of pensions. While on secondment they will remain subject to the State pensions legislation and retain the benefits of the existing State Widows and Orphans' Pensions and Provident Fund legislation. The North Borneo Government have tabled a study of the prospects of future service by overseas officers. The Sarawak Government are engaged in a similar study These studies will be further considered by the Governments concerned and the intention is that they should enable these Governments to advise individual overseas officers of the minimum length of service likely to be open to them.
15. The inducement allowances, education alloawnces and half the passage costs of these officers are met by the British Government by reimbursement of the State Governments under the Overseas Service Aid Scheme Agreements concluded with the Governments in 1961. The Agreements are for a period of 10 years and payments will therefore continue after Malaysia Day. Payments will continue to be to the State Governments in respect of the designated officers remaining in State Service. In respect of officers seconded to the Federal Public Service for service in Borneo and in respect of judges, since these officers will be paid by the Federal Government the British Government are willing to enter into an O.S.A.S. Agreement with the Federal Government to make similar reimbursements to that Government. Such an Agreement will extend only to overseas officers serving in the Borneo States on Malaysia Day or overseas officers subsequently recruited under the arrangements in paragraph 17 for service in the Borneo States.
16. Once the Federal Government assumes a general financial responsibility for Service pensions, the British Government will also, under the proposed O.S.A.S. Agreement with the Federation, reimburse the Federal Government in accordance with the principles of the Scheme the proportion of an officer's pension attributable to the pensionable element in the inducement allowance provided by the British Government.
17. Under the Scheme it will be possible for the Federal and State Governments, subject to agreement with the British Government each year about overall costs, to continue to recruit on contract from overseas to fill gaps in the Services while Borneanisation proceeds. Save in exceptional cases new recruitment under the Scheme will be confined to citizens of the United Kingdom and Colonies and of the Irish Republic. The British Department of Technical Co-operation are willing to be agents for such recruitment and will need in any case to receive particulars of new recruits to discharge their statutory responsibility for the designation of officers under the Scheme.
18. Since the allowances under the Scheme are variable in accordance with changes in economic and other living conditions the British Government will wish to keep in touch with the Federal and State Governments about the working of the Scheme and, subject to their concurrence, with the staff associations concerned
Judicial and Legal Officers
19. As stated in paragraph 26(9) of the Report, the existing members of the Unified Judiciary in the Borneo States will continue in office as judges of the High Court of the Borneo States. In view of the overriding requirements of Borneanisation the term of office of those existing judges who are overseas officers will be for a period of years after Malaysia Day to be prescribed by The Federal Government. There should be provision to preserve the eligibility for full lump sum compensation payable by instalments for the existing judges who are overseas officers and they should remain designated officers under the Overseas Service Aid Scheme.
Compensation and Public Officers Agreements
21. In accordance with undertakings given by the British Govemment to Her Majesty's Oveseas Civil Service, a compensation scheme on the lines of the attached draft will be brought into force on Malaysia Day for entitled officers serving in the Borneo States.
22. The compensation scheme should be brought into effect by an Order in Council, which will preserve the continuing rights under the scheme of an officer who is seconded to Federal Service within the Borneo States. To all officers, other than those who may be required to retire under procedures laid down in the scheme, compensation is to be paid by instalments over a period of five years. These capital payments are exempt from income tax in the United Kingdom. The Order in Council should provide for a similar exemption from tax in the Borneo States, and insofar as this may be necessary the Federal Government will secure that these payments (but not any interest payable on them) are exempt from tax under Federal law.
23. Certain features of the compensation scheme have special implications for the Federation:—
24. Public Officers Agreements on the lines of the attached draft should be concluded with the Federal and State Governments to safeguard the conditions of service of overseas officers, and in particular their pensions. These Agreements should come into effect on Malaysia Day.
Designated Contract Officers
25. Over 100 contract officers from overseas are serving in Departments due to be Federalised. The great majority of these are serving on contracts for a single tour. The Federal Government and the Borneo Governments wish to reassure these officers that the terms of their existing contracts will be observed and that they can expect to complete the full term of their contracts on secondment to the Federal Service but without liability to serve outside Borneo.
26. The terms of service of the small number of officers serving on long-term contract will also, of course, be observed. It appears likely that these officers too will complete the full term of their contracts and the Governments of North Borneo and Sarawak are confident that this will prove to be the case. It is however, desirable both as a protection for officers and a proper provision for Government that a regular procedure should be laid down for localising the posts of these officers if and when this becomes possible, similar to the procedure for localising the posts of pensionable overseas officers. This would involve a special payment to the officer to compensate for any premature termination of contract.
Officers other than Designated Officers serving on certain overseas terms
27. Some officers serving in the Borneo States, although not eligible for designation under the Overseas Service Aid Scheme and not in receipt of overseas inducement pay, have within certain limits been recognised as overseas officers, primarily by according them overseas passage terms. These officers will be treated in all respects as local officers, so that no question of the Borneanisation of their posts will arise and they will throughout their careers be equally eligible for promotion with local officers. Since the establishment of Malaysia is not to disturb existing conditions of service, they will continue while serving in the Borneo States to enjoy their existing overseas passage terms on a personal basis unless they opt to surrender them at some future date as part of a generally favourable change to new conditions of service.
Police
29. Principles similar those set out above for the State Public Services should apply to the North Borneo Police Force and the Sarawak Constabulary. Designated officers will be seconded to the Federal Police Service retaining their existing terms of service and they will be eligible for promotion within the Borneo States according to the principles in paragraph 14. All Police Officers and all non-designated officers serving with the Police Forces will also be seconded to the Federal Police Service. It will be open to non-designated officers at any time to opt to join the Federal Police Service and promotion will be conditional on transfer to that Service. Officers will not be liable for service outside the Borneo States, save with their consent. For disciplinary purposes officers transferred to the Federal Police Service will be subject to the Federal Police Service Commission. Officers seconded from the State Public Service will be subject to a State Police Board with the following membership:—
          The State Commissioner of Police, and
          A representative of the Inspector General of the Federal Police Service.
The State Police Board will have powers similar to the Federal Police Service Commission to delegate its authority and it is recommended that it should delegate this authority to the full extent that the Federal Police Service Commission delegates its authority. Once the Police Service is fully federalised the State Police Boards will cease to exist.
General
30. The arrangements set out above should go far to meet the representations made by the North Borneo Civil Service Union and the Sarawak Government Asian Officers Union which have been taken into account. They should also secure the smooth transition of the existing Public Services in the Borneo States into the Federal Public Service, where appropriate, on the establishment of Malaysia and preference for local officers for promotion in the Borneo States. They must not, however, be allowed to impede a constructive partnership within the future Federal Public Service. In the longer term, Malaysia will be an unreal creation unless the principle of Malaysianisation is accepted. In its absence, the Borneo States will be the first to suffer. Borneo officers must play their part in helping to frame Federal policies in the Federal Capital and enjoy opportunities of entering Federal Departments of which the Borneo States have no present counterparts. Similarly Malayan officers in the Federal Public Service must be brought to view problems from a Malaysian point of view that takes full account of the interests, anxieties and hopes of the Borneo States. They can never do this until numbers of them have had reasonable opportunities of serving in the Borneo States and of being made to be directly responsible for their interests. If the safeguards provided for Borneanisation were used for the permanent exclusion of Malayan officers from Federal posts in the Borneo States, Federal policies could not take full account of the views of the Borneo States.
31. During the early years of Malaysia it desirable that a limited number of suitably qualified officers from the Borneo States should be posted to other parts of Malaysia. The opportunity will also be taken of posting to the Borneo States a limited number of Federal officers or officers from other States. If any designated overseas officers are posted on secondment from the Borneo States, either as a part of these exchanges, or in the interests of the Borneo States to Federal Ministeries and Departmental headquarters, they will continue to be entitled to the benefits of the O.S.A.S.
32. It is recommended that the Federal and State Governments should as soon as possible set up a joint Commission to enquire into and make recommendations on bringing terms and conditions of service throughout the Federal Public Service in Malaysia into line; to recommend whether officers in Divisions III to V serving in Federalised Departments may opt to join the Federal Public Service of Malaysia; and to recommend whether Federal conditions should apply to officers who join the Federal Public Service but continue to serve in the Borneo States.
NORTH BORNEO AND SARAWAK SCHEME OF RETIREMENT BENEFITS FOR MEMBERS OF HER MAJESTY'S
OVERSEAS CIVIL SERVICE AND FOR OFFICERS DESIGNATED UNDER THE OVERSEAS SERVICE (NORTH BORNEO/SARAWAK) AGREEMENT 1961.
1. Date of Introduction of the Scheme
(i)The Scheme shall come into operation on the date (which shall be the "operative date" of the Scheme) on which North Borneo/Sarawak becomes part of the Federation of Malaysia, or on the date on which the Public Service Commission enjoys executive powers, whichever is the earlier.
(ii) The details of this Scheme will be embodied in an Order in Council.
(iii) With effect from the operative date, entitled officers, as defined in paragraph 2 below, will be entitled to lump sum compensation which shall be calculated and paid in accordance with the provisions of this Scheme.
2. Definition of Officers Entitled to Compensation
(i) Pensionable overseas officers, who are members of Her Majesty's Overseas Civil Service or who are designated officers under the Overseas Service (North Borneo/Sarawak) Agreement, 1961, and who were either (a) selected for appointment or (b) were admitted to the pensionable establishment or (c) were transferred to the service of the North Borneo/Sarawak Government from other scheduled service, before the 1st January, 1963, shall be entitled officers and are referred to hereinafter as "entitled officers" for the purposes this Scheme.
(ii) Officers aged 55 or over, judges aged 62 or over, officers seconded or temporarily transferred to North Borneo/Sarawak from other public service and officers on leave pending retirement on the operative date (other than those who. before that date, have been called upon to retire for constitutional reasons) or who, without the agreement of the Government, have given less than six months notice of retirement under paragraph 10 below shall not be entitled officers.
(iii) Entitled officers who are borne on the establishment of the Government of North Borneo/Sarawak, who, on the operative date, are seconded for service outside North Borneo/Sarawak, will be treated in the same way as other entitled officers, and the compensation will be paid to them in accordance with paragraph 6 of this Scheme. Where an entitled seconded officer was, serving on an incremental scale at the time of his secondment, compensation will be calculated on the basis of the point on that scale which he would have reached had he not been seconded.
(iv) An officer who is serving on probation on the operative date, but who otherwise satisfies the requirements for entitlement set out in sub-paragraph (i) above, shall, subject to the provisions of paragraphs 6 (viii) and 13 (v) below, become entitled to compensation with effect from the date on which he is confirmed in his appointment and his compensation will be calculated with effect from that date. Service on probation will be "service" for the purposes of this Scheme.
3. Termination or Continuation of Service
(i) As soon as possible after the publication of this Scheme, the Government shall notify every entitled officer whether he will continue to be employed in the pensionable service of the Government and if so for what minimum period. At the conclusion of that or any further minimum period, Government shall notify every entitled officer whether he will continue to be employed in the pensionable service and if so for what further minimum period.
(ii) Every entitled officer shall as from a date not less than four months before the operative date be permitted to give by notice in writing in accordance with paragraph 10 below, notice of retirement to take effect from a date not more than four months before the operative date.
(iii) An officer who continues in pensionable service after the operative date may at any time after that date give notice of retirement in accordance with paragraph 10 below. ​4. Eligibility for Pension
(i) The effect of the Scheme on pensions (in view of the provisions & the Pensions Laws and Schemes in North Borneo/Sarawak and in other territories) is as follows.
(ii) Any entitled officer who (a) elects to retire from the pensionable service under this Scheme (whether he accepts an offer of a contract appointment or not) or (b) retires from the service on medical grounds or (c) is required to retire from the service either in accordance with the provisions of paragraph 12 or 13 below or to facilitate the reorganisation of the Public Service or on the grounds of public interest or because of the abolition of his office or on grounds of age will be eligible to receive such pension from the Government of North Borneo/Sarawak as he has earned by his pensionable service in North Borneo/Sarawak irrespective of whether his length of service in North Borneo/Sarawak is less than ten years and of whether he has attained the minimum retiring age at the date of his retirement or has served the minimum period under the Scheme applicable to him.
(iii) Where an entitled officer has other scheduled service, his eligibility for pension in respect of that other service will depend on the pensions law relating to it. An entitled officer who elects to retire before he has completed ten years' total pensionable service (including qualifying service which is not in itself reckonable for the computation of pension) will be eligible only for a gratuity in respect of that part of his scheduled pensionable service which was not served in North Borneo/Sarawak; provided that reciprocal arrangements will so far as possible be made by the Governments of the Federation of Malaya, Singapore, Sarawak, Brunei and North Borneo so that an officer who retires under this Scheme with less than 10 years' total pensionable service which includes other scheduled pensionable service in Malaysia will receive pension in respect of his pensionable service under those Governments notwithstanding that his length of pensionable service is less than 10 years.
(iv) The pension of any entitled officer who is called upon to retire under this Scheme (either for constitutional reasons or to facilitate the localisation of the Public Service or to facilitate the reorganisation of the Public Service or because of the abolition of his office or on grounds of age) (paragraphs 6 (vi) to (viii), 12 and 13 below refer) will be calculated on the basis of the pensionable emoluments which he is drawing at the date on which his leave prior to retirement expires, and the averaging provisions of the Pensions Ordinance will not apply to such officers.
5. Calculation of Compensation
(i) An entitled officer will be eligible for compensation to be calculated and paid as set out below.
(ii) Compensation shall be calculated as a lump sum in accordance with the tables (Appendices I and II) which have been drawn up by the Government Actuary in the United Kingdom. These tables take account of length of pensionable service up to ten years. The maximum amount of compensation payable under this Scheme shall be £12,000.
(iii) Compensation shall be calculated by multiplying the officer's annual pensionable emoluments at the date taken for calculation by the factor appropriate to his age and length of service at that date.
(iv) The dates taken for calculation shall be—
Provided that at each date taken for calculation after the operative date, the point in time in relation to which the calculation is made shall be the point most favourable to the officer between the operative date and that date. ​(v) Service (whether under the North Borneo/Sarawak Government or under a scheduled Government) shall count for compensation to the same extent as it counts in the computation of the officer's retirement benefits in respect of service under a scheduled Government as defined in the Pensions Ordinance.
(vi) The pensionable emoluments to be taken for calculation will be the pensionable emoluments which the officer is drawing on the date taken for calculation.
(vii) The compensation due to officers who remain on the pensionable establishment will not decrease below the figure as assessed on the operative date. The compensation of these officers will be recalculated each year to take account of changes in age, salary and length of service or promotion, where, this will result in an increased assessment, and the officers' entitlements will not thereafter fall below the increased amounts. This process will continue after the sixth instalment has been paid and any further compensation will be paid on each anniversary of the date taken for calculation.
(viiii) The tables shall be interpreted on the basis of completed months of age and service only where this is to the advantage of the officer concerned. In all other cases. the compensation factor of an officer shall be based on completed years of service and his age on his last birthday before the date taken for calculation.
(ix) Every entitled officer who is offered promotion carrying an increase in his pensionable emoluments after the operative date will (irrespective of the effective date of the promotion) be required, as a condition of the offer of promotion, to undertake to serve the Government of North Borneo/Sarawak for a further period of not less than 24 months' residential service from the date of notification of the promotion. The recalculation, on any date subsequent to the operative date of officer's entitlement to compensation, will also be made on the basis of the pensionable emoluments which the officer is drawing on such subsequent date, except that if the officer breaks his undertaking by retiring without the agreement of the Government before serving for 24 months' residential service, his compensation will be calculated on the basis of the annual pensionable emoluments he was drawing immediately before the date of his promotion, or on the basis of the average of his annual pensionable emoluments during the three years before his retirement, whichever is the greater. An officer who accepts promotion, after giving an undertaking to serve for not less than 24 months' residential service, and who might, in order to complete his 24 months, have to return to North Borneo/Sarawak for a final tour of less than 12 months may be required by the Government to serve for a final tour of not more than 12 months.
(x) The compensation of an entitled officer who continues in the pensionable service after the operative date will be increased by an amount arrived at by multiplying his annual pensionable emoluments on each anniversary of the operative date or finally on his retirement by a factor of 0.10 in respect of each completed period of 12 months service (and pro rata for each completed month) since the operative date or the previous anniversary as the case may be. This compensation shall not be affected by the ceiling of £12,000 provided for in sub-paragraph (ii) above and shall be paid in one lump sum on each anniversary of the operative date and finally on retirement. For the purpose of this sub-paragraph deferred leave as at the operative date shall not be reckoned as service.
(xi) Each entitled officer will be given an initial certificate of the amount of compensation to which he is entitled on the occasion of its initial calculation and (in the case of officers who continue to serve on pensionable terms) on the occasion of any subsequent recalculation. Where an officer retires from the pensionable service before the final instalment of compensation has been paid to him, he will be given a final certificate of his entitlement as soon as possible after his retirement leave has expired and after all details of his age, salary and length of service at the date of his final retirement have been taken into account.
(xii) Some officers may wish to use the certificates provided under (xi) to establish their creditworthiness with vanous lending institutions. To assist in this Her Majesty's Government have informed the major financial institutions in the United Kingdom which provide credit — the banks, insurance institutions and buildings societies — of the existence of compensation schemes providing for capital payments by instalments to which Her Majesty's Government contribute, and of the provision of certificates entitlement to individual officers. These institutions have informed their branches accordingly and have left it the responsibility of their branch managers to take ​account of these certificates to the extent they think appropriate in assessing the credit worthiness of individual officers. The Department of Technical Co-operation are prepared, on request from an entitled officer, to write to a particular bank or similar institution confirming the status of the certificate that the officer may have shown to the institution. The Governments of North Borneo and Sarawak will consider whether these certificates should be made negotiable.
6. Method of payment
(i) Subject to the provisions of sub-paragraphs (v) to (viii) below and to the provisions of paragraphs 12 and 13 of this Scheme, the lump sum compensation calculated in accordance with paragraph 5 above shall be payable over a period of five years from the operative date in six instalments, of which the first shall be paid as soon as possible after the operative date. Subsequent instalments shall be paid at intervals of one year from the operative date.
(ii) Those instalments shall be paid to all entitled officers whether they elect to retire from the Public Service or to remain on the pensionable establishment or to retire from the pensionable service and accept an offer to remain in the Public Service on contract terms (see paragraph 9 below).
(iii) Subject to the provisions of paragraph 7 below, the initial instalment of compensation shall be £1,000 or one-sixth of the total compensation payable, whichever is the greater, except that where the total compensation is £1,000 or less it shall be paid in full at once. Subject to the provisions of sub-paragraph (iv) below, one-fifth of the balance of compensation due will be paid as a second instalment, one-fourth as a third instalment and so on.
(iv) If on any anniversary of the operative date, the instalment due does not exceed £400 then, if the total amount of the balance of compensation payable is more than £400, an instalment of £400 shall be paid; if the balance of compensation payable is less than £400, then the balance shall be paid at once. If, when any instalment is paid, the balance of compensation after payment of the instalment would be less than £100, it will be paid in full forthwith.
(v) An entitled officer who attains the age of 55 (or, in the case of a judge, the age of 62) shall be paid forthwith the balance of compensation due to him.
(vi) An entitled officer who is required to retire at any time on medical grounds or in the public interest shall be paid forthwith the balance of compensation due to him.
(vii) An entitled officer who is required to retire at any time either to facilitate the reorganisation of the Public Service or because his office is abolished or on grounds of age in accordance with the provisions of the Pensions Ordinance shall be paid forthwith the balance of compensation due to him and shall also be given the additional benefits set out in paragraph 13 (iii) or (iv) as may be appropriate.
(viii) Ifa n officer serving on probation (who is otherwise an entitled officer within the meaning of paragraph 2 (i) above), is required to retire either to facilitate the reorganisation of the Public Service or because his office is abolished or on grounds of age in accordance with the provisions of the Pensions Ordinance, he shall be deemed to have been confirmed in his appointment and the provisions of sub-paragraph (vii) of this paragraph shall then apply to him.
7. Officers who undertake to continue to serve on pensionable terms for a minimum further period of 24 months of residential service.
(i) An entitled officer who gives a written undertaking to continue to serve on pensionable terms for a further minimum period of 24 months of residential service, and whose undertaking is accepted by Government, shall receive an initial compensation payment of £2,000 if the compensation due to him exceeds £2,000, or the total due to him if his entitlement is less than £2,000. In subsequent years, payment will be one-fifth, one-quarter, etc. of the reassessed balance of compensation, subject to the provisions of paragraph 6 (iv).
(ii) An entitled officer who enters into this arrangement and who might, in order to complete his 24 months of residential service, only have to return to North Borneo/Sarawak for a final tour of less than 12 months, may be required by the Government to serve for a final tour of not more than 12 months. ​(iii) An entitled officer who, having received an initial payment of £2,000, breaks his undertaking to serve on pensionable terms for a further minimum period of 24 months of residential service by retiring without the agreement of the Government, shall be liable to lose one-half per cent of the total compensation due to him (as calculated, if appropriate, in accordance with the provisions of paragraph 5 (vii) above) in respect of each month or part of a month by which he has failed to serve.
(iv) An entitled officer who enters into this arrangement may proceed in one of the following ways:—
8. Payment of Interest
(i) Interest at 5 per cent per annum, based on the previously assessed balance of compensation due, will be paid at the time of the payment of the next instalment. Where a recalculation of the entitlement to compensation is made on an anniversary of the operative date interest will become payable on the reassessed balance from the date when the recalculation is made.
(ii) Where a recalculation is made on the occasion of an officer's retirement interest will be paid, at the time the next instalment of compensation is due, calculated as follows:—
5 per cent per annum on the balance of compensation due at the previous anniversary of the operative date for the period between the anniversary of the operative date and the date of retirement, plus 5 per cent per annum on the balance of compensation due on recalculation at the date of retirement from the date of retirement to the next anniversary of the operative date.
(iii) For the purpose of calculating interest the first instalment of compensation will be deemed to have been paid on the operative date.
9. Contract Appointments
(i) An entitled officer may request re-engagement on contract terms and, with the approval of the Public Service Commission, such officer may be so re-engaged on terms which are not more favourable than those he enjoyed before he retired. Such entitled officer will not be required to give the normal period of notice of retirement.
(ii) The contract will commence with effect from the first day of the month following the officer's acceptance of the offer of contract employment. The day immediately preceding the effective date for the commencement of the contract will be regarded as the last day of the officer's pensionable service for the purpose of computation of his pension and of final calculation of his compensation entitlement. Re-engagement on contract terms will not affect the officer's entitlement to payment of pension and compensation under this Scheme as from the date of his retirement from the pensionable service.
(iii) Any leave due to the officer on the day on which his contract service starts will not be regarded as pensionable service, but will be added to leave earned under the contract and will earn gratuity. ​10. The giving of notice by entitled officers who elect to retire from the Service
Giving of Notice While in North Borneo/Sarawak
(i) An entitled officer may, at any time after the date on which this Scheme is announced. give notice of his intention to retire from the Public Service. An officer will normally be required to give six months resident service notice of retirement, provided that:—
(ii) An entitled officer who gives notice of his intention to retire under this Scheme and who proceeds on leave prior to retirement before the expiration of the normal tour prescribed for him will be entitled to the full retirement passage and baggage concessions, prescribed by Standing Orders, which he would have been entitled to if he had completed the normal tour prescribed for him.
Giving of Notice While on Vacation Leave
(iii) An entitled officer who is absent from North Bornco/Sarawak on vacation leave may (at any time after the announcement of this Scheme) give notice of his intention to retire from the Service, provided that no period of notice can start more than four months before the operative date.
(iv) The Government may require the officer concerned to return to North Borneo/Sarawak after the expiration of the leave granted to him for a period of six months' residential service to work out his notice, in which event, the Government will pay the full cost of passages for the officer and his family to and from North Borneo Sarawak and will give the officer full retirement baggage concessions on his final journey from North Borneo/Sarawak, as if he were returning for and completing a full normal tour of service. The Government will avail itself of its right to require an officer to return to North Borneo Sarawak in these circumstances, only if this is essential in the public interest.
(v) If it is agreed that the officer need not return to North Borneo/Sarawak to work out a period of notice, he will forthwith be granted any balance of leave (including any deferred leave) earned up to the day on which he proceeded on leave; he will be allowed the retirement baggage concessions prescribed in Standing Orders, to enable him to transport his effects from North Borneo/Sarawak; and his service will be deemed to finish on the expiration of the leave due to him.
(vi) If the officer himself expresses a wish to return to North Borneo/Sarawak to settle up his affairs, he will be permitted to do so, but the cost of his and his family's passages will be paid by the Government only if he completes on his return a final tour of not less than 12 months.
Withdrawal of Notice
(vii) An entitled officer may request permission to withdraw his notice of retirement, but it will be for the Government to decide whether or not he should be permitted to do so.
11. Arrangements on Transfer
(i) If an entitled officer is offered, after the operative date, a transfer to pensionable public service scheduled under the Pensions Laws without a break in his service, and if he accepts such a transfer, he will be liable to return any instalments of compensation paid to him; and it will be for the Government of North Borneo/Sarawak to satisfy itself as to the arrangements made with the officer for this repayment (The amount of the refund will be shared equally between the North Borneo/Sarawak Government and the United Kingdom Government). ​(ii) If an entitled officer accepts a transfer (as defined in sub-paragraph (i) above) to a post carrying lower pensionable emoluments than his post in North Borneo/Sarawak, he will be granted compensation either:—
whichever is the less, and the compensation shall be paid as set out in paragraph 6 above.
12. Officers who are required to retire during 1963 and subsequently to facilitate the introduction of constitutional changes
(i) An entitled officer who is required to retire in the circumstances described above will be entitled to the following benefits:—
(ii) The decision whether or not a particular retirement falls within the terms of this paragraph will rest with the Public Service Commission.
13. Officers who are required to retire to facilitate the localisation of the Public Service
(i) The Government may inform the Service Commissions that, as a general policy, expatriate officers should be required to retire in sufficient numbers whenever suitably qualified local candidates are available for appointment or promotion and sufficient vacancies are not available to accommodate them; or, alternatively, it may inform the Service Commissions of the application of this policy to particular cadres from time to time. It will be for the Service Commission concerned to determine whether suitably qualified local candidates are available who cannot be accommodated in existing vacancies and, if so, to select the individual expatriate officers who should be required to retire.
(ii) No officer who has been notified that he will continue to be employed for a minimum period in accordance with paragraph 3 above shall be required to retire under this paragraph before the expiry of that minimum period.
(iii) It will be for the appropriate Service Commission to determine, in the light of the public interest, what period of notice should be given to an entitled officer who is required to retire in these circumstances, provided:—
​(iv) Every entitled officer who (while in North Borneo/Sarawak) is required to retire in these circumstances shall be entitled to the following benefits:—
(v) If an entitled officer is given notice to reture in these circumstances while on vacation leave, he shall be granted the following benefits:
(vi) If an officer serving on probation (who is otherwise an entitled officer within the meaning of paragraph 2 (i) above) is required to retire in these circumstances, he shall be confirmed in his appointment forthwith and shall then be entitled to compensation and other appropriate benefits set out in this paragraph.
14. Death of an Entitled Officer
(i) The dependants or the legal personal representatives of an entitled officer who after the operative date dies while still serving or while on leave prior to retirement and before all payments of compensation due to him have been made, shall receive the outstanding balance of compensation and the death gratuity for which provision is made in the Pensions Ordinance. provided that the death gratuity shall, where applicable, be calculated by reference to the special table of factors provided for in paragraph 15 (i0 below and to the additional commutations of pension provided for under paragraph 15 (ii) below.
(ii) Where an entitled officer dies after he has retired, his dependants or legal personal representatives shall receive the outstanding balance of any compensation and any other benefits due to them under the Pensions Ordinance.
15. Commutation of Pensions
(i) Entitled officers retiring under this Scheme shall be entitled to commute up to one-quarter of their earned pension (whether that pension has been earned solely by service in North Borneo/Sarawak or partly by service in North Borneo Sarawak and partly by service under another Government or administration which schedules North Borneo/Sarawak in its pension law) in accordance with the special table of commutation factors which is set out in Appendix IV. The North Borneo/Sarawak Government will bear the cost arising from the difference between these factors and the commutation factor provided for in the pensions law of the other Government or Administration. These special factors shall also apply to the commutation of pensions of entitled officers who retire after the final instalment of compensation has been paid. ​(ii) Entitled officers who remain in the Service on pensionable terms after the operative date shall be entitled, on retirement, to commute a further one-sixteenth of their pensions earned in respect of their service in North Borneo/Sarawak for each completed year of service after the operative date, in accordance with the special table of commutation factors set out in Appendix IV provided that deferred leave (ie. vacation leave due to an officer in excess of vacation leave earned in respect of his final tour of service) shall not count as service in respect of which the officer may commute an extra one-sixteenth of his pension.
(iii) An entitled officer will be permitted to commute the whole or any part in excess of the statutory provisions of the pension earned in respect of his service in North Borneo/Sarawak up to a maximum of £300 in accordance with the special table of commutation factors set out in Appendix IV, but any excess of pension over £300 will be forfeited.
(iv) Officers who are pensionable under the Overseas Superannuation Scheme are not entitled under the Regulations of that Scheme to commute any part of their pensions but instead receive a smaller pension and a lump sum which is equivalent to one-quarter of a normal pension multiplied by a factor of 10. North Borneo/Sarawak will add to this lump sum to bring it up to the amount which would have been payable if the officer had not been eligible for a pension and a lump sum but had been eligible for a pension calculated on a pension constant of one-six hundredth for each month of service and had been able to commute one-quarter of that pension in accordance with the table referred to in sub-paragraph (i) above.
16. Incidence of Income Tax
(i) Compensation payments (whether paid in a lump sum or by instalments), disturbance grants and capital sums paid in respect of commutation of pensions, whether paid to the officer or (in the event of his death) to his dependants or his legal personal representatives shall not be liable to income tax either in the United Kingdom or in North Borneo/Sarawak.
(ii) Interest paid on the balance of compensation due to an entitled officer (after the initial payment has been made) may be liable to income tax either in the officer's country of residence or in North Borneo/Sarawak or in both, according to the circumstances of the officer and subject the provisions of any Double Taxation Agreement where applicable.
17. Disciplinary proceedings which may affect the pension or compensation of an entitled officer serving after the operative date.
(i) If any decision of a Service Commission has the effect of withholding, suspending, reducing or otherwise altering to his detriment any pension, compensation or other retiring benefit due to or in respect of an entitled officer, he or his legal personal representatives as the case may be shall have the right to appeal against the decision to an Appeals Board whose decision shall be final. The Appeals Board will be composed of one member selected by the Chief Minister, one member selected by an association representing public officers or a professional body nominated by the entitled officer concerned, and one selected by the two other members jointly, to be Chairman of the Board. An officer shall be entitled to legal representation before the Board.
(ii) If an entitled officer, who has retired from the pensionable service with compensation and has been engaged on contract terms, terminates his contract or has his contract terminated for any reason. this will not affect the payment of his pension or the payment of any balance of compensation due to him.
18. Officers on temporary transfer from the Home Civil Service
An officer on temporary transfer from the Home Civil Service who is in the service of the North Borneo/Sarawak Government on the operative date and who would then have been an entitled officer if he had not been serving on temporary transfer if he returns to the Home Civil Service to a post carrying lower pensionable emoluments than the post he holds in North Borneo/Sarawak, shall receive (after the date of his return to the Home Civil Service) compensation calculated as in paragraph 11 above, provided:—
19. Arrangements regarding the refund of compensation on established appointment to the Home Civil Service (including the Foreign Service)
(i) An entitled officer who enters the pensionable establishment of the Home Civil Service through a competition conducted by the Civil Service Commissioners will not be required to refund his compensation if there is a break between the last day of his pensionable service under the North Borneo/Sarawak Government and the first day of his established service in the Home Civil Service.
(ii) An officer who takes up an established appointment in the Home Civil Service without a break in service may be regarded for the purpose of the North Borneo/Sarawak Pensions Law as having been transferred to the Home Civil Service. Subject to the provisions of paragraph 11 above, he will be required to refund any instalments of compensation he has received and will not be eligible to receive a pension from the North Borneo/Sarawak Government (or any other scheduled government which he has served) until his final retirement from public service.
(iii) An entitled officer who, having been formerly a pensionable member of the Home Civil Service, returns to a pensionable appointment in that Service, otherwise than as the result of a competition conducted by the Civil Service Commissioners, within twelve months of the expiration of his retirement leave from North Borneo/Sarawak, shall receive either compensation calculated in accordance with paragraph 11 above, or half the compensation to which he is entitled, whichever is the less and will be required to refund any instalments of compensation in excess of this amount which he may already have received. The amount of the refund will be shared equally between the North Borneo/Sarawak Government and the United Kingdom Government. The compensation shall be paid as set out in paragraph 6 above.
20. Abolition of office terms
(i) An entitled officer shall not be eligible to receive any addition to earned pension or gratuity provided for in the Pensions Ordinance or Scheme in respect of abolition of office if he receives compensation for loss of career.
(ii) An entitled officer who before the operative date gives notice of retirement under this Scheme may at his option on his retirement receive the abolition addition to pension provided for in the pensions law or Scheme instead of the compensation provided for under this Scheme.
21. General
Any compensation or gratuity payable under this Scheme to an officer or to his personal representatives or dependants shall be paid in accordance with any requests made from time to time by such officer, his personal representatives or his dependants, as the case may be, in any of the following countries:—
APPENDIX I
NORTH BORNEO AND SARAWAK COMPENSATION FACTORS—OFFICERS
Appendix II
NORTH BORNEO AND SARAWAK COMPENSATION FACTORS JUDGES—NORMAL RETIREMENT AGE 62
Appendix III NORTH BORNEO AND SARAWAK
COMPENSATION IN RESPECT OF TRANSFERRED OFFICERS
FACTOR TO BE APPLIED TO REDUCTION IN SALARY SUSTAINED ON TRANSFER
Appendix IV NORTH BORNEO AND SARAWAK
COMMUTATION OF PENSION UNDER COMPENSATION ARRANGEMENTS Table showing the lump sum to be paid for the Commutation of each £1 p.a. of Pension
​PUBLIC OFFICERS AGREEMENT BETWEEN HER MAJESTY'S GOVERNMENT IN THE UNITED KINGDOM AND THE GOVERNMENT OF
Her Majesty's Government in the United Kingdom and the Government of have agreed as follows:—
Interpretation 1. (1) In this Agreement—
             (i) who was selected for or offered appointment to the Public Service of by a Secretary of State; or
             (ii) whose appointment to the Public Service of was approved by a Secretary of State; or
             (iii) who had entered into an agreement with the Crown Agents for Oversea Governments and Administrations to serve in the Public Service of ; or
             (iv) who (although not an officer falling within heads (i), (ii) or (iii) of this sub-paragraph) is or has been a member of Her Majesty's Overseas Civil Service or Her Majesty's Overseas Judiciary, or has been a member of a former Colonial Unified Service, or is or was a designated officer for the purposes of the Overseas Service Agreement 1961;
(2) "Substantive holder" in relation to any office includes a person serving in that office on probation but does not include a person (other than a person serving under a probationary agreement) serving in the office for a specified term under a contract.
Conditions of Service 2. The conditions of service applicable to an overseas officer who continues to be the substantive holder of a pensionable office in the Public Service of on or after the appointed day shall not be less favourable than those which were applicable to him immediately before the appointed day.
Retirement and Pensions 3. The entitlement to retire and the eligibility to receive a pension of any overseas officer who continues to be the substantive holder of a pensionable office in the Public Service of on or after the appointed day or of his widow, children, dependants or personal representatives shall be as provided for in the laws, regulations and administrative directions in force on the appointed day or in such other laws, regulations and administrative directions made thereafter as are not less favourable; and pensions shall be granted and paid to such officers and other persons accordingly.
Preservations of Pensions 4. The pension of any overseas officer who has ceased to be the substantive holder of a pensionable office in the Public Service of before the appointed day, or of the widow, children, dependants or personal representatives of any such officer, shall be granted and paid, or if granted before that date shall continue to be paid, in accordance with ​the laws, regulations and administrative directions governing those pensions immediately before the appointed day or in accordance with such other laws, regulations and administrative directions made thereafter that are not less favourable.
Payment of Pensions 5. (1) A pension shall, at the option of the person to whom it is payable, be paid either in or in the country in which he is residing or in any other country to which he had an entitlement to a free passage for the purpose of leave of absence upon the completion of a tour of duty as may from time to time be requested by him in writing.
(2) An option exercised under paragraph (1) of this Article—
(3) Pensions payable outside after the appointed day shall be paid in the currency of the country in which payment is to he made, and the amount of the payment shall be such as would produce, at the official rate of exchange prevailing at the date of the payment, the amount in sterling of the pension calculated as at the official rate of exchange prevailing on the appointed day: Provided that there is a general revision of salaries consequent upon the revaluation of the currency in use in as a result of which the pensionable emoluments of an overseas officer may be increased the Government of may require that officer to agree that any pension that may be granted to him shall be calculated at the rate of exchange prevailing at the date of the revision of salaries before granting him the benefit of the increase of pensionable emoluments.
(4) Where the person to whom a pension is payable is a minor, his or her lawful guardian may exercise the option conferred by this paragraph.
Options 6. For the purposes of this Agreement, in so far as the law, regulations or administrative directions applicable to the grant of a pension or to other conditions of service depends on the option of the person to or in respect of whom the pension is granted or is to be granted, or of the overseas officer to whom the conditions of service apply, the law, regulations or administrative directions for which such person or officer opts shall be taken to be more favourable to him than any other law, regulation or administrative direction for which he might have opted.
Officers in H.M.O.C.S and H.M.O.J 7. (1) Overseas officers who are members of Her Majesty's Overseas Civil Service or of Her Majesty's Overseas Judiciary shall continue to be eligible for consideration by Her Majesty's Government in the United Kingdom for transfer or promotion to employ in the Public Service of some other territory.
(2) The Government of shall comply with any reasonable request that may at any time be made by Her Majesty's Government in the United Kingdom for the release of an overseas officer for transfer or promotion in pursuance of paragraph (1) of this Article and shall take any action that may be necessary to preserve his pension rights when he is so transferred or promoted.
(3) Before he is released an overseas officer shall be required to make arrangements satisfactory to the Government of for the repayment to that Government of any compensation or instalments of compensation he may be required to make under the (Compensation Scheme), but not of any interest paid on outstanding instalments.
Appeals Board 8. Section (Appeals Board) of the ( Constitution), relating to benefits, to which Section of the ( Constitution) applies, that may be granted or that may have been granted to or in respect of any overseas officer, shall not be revoked or amended to the prejudice of the interests of any such officer.
Citation and Commencement 9. This Agreement may he cited as the Public Officers ( ) Agreement, 196, and shall come into operation on the date of signature.
Done in duplicate at this day of , 196 . . Signed on the behalf of Her Majesty's Government in the United Kingdom Signed on the behalf the Government of
* ↑ Note:—The factor corresponding to the officer's age and service in years and completed months should be obtained by interpolation.
* ↑ Note: These factors apply where the judge has at least ten years' service. The factors corresponding to the judge's age in completed months should be obtained by interpolation.
* ↑ Note:—The factor corresponding to the officer's age in years and completed months should be obtained by interpolation.
* ↑ Note: The factor corresponding to the officer's age in years and completed months should be obtained by interpolation.