Newsletter Special Issue (2004)

Open Letter to Staff and Students of the University Dear colleagues and students, [1] You are certainly aware of the colossal funding cut to be borne by our Un i ve r s i t y. I f u l ly understand your concerns, doubts, and anxiety — some over the possibility of large salary cuts, others over unemployment i f jobs are to be outsourced. For one who has spent the last 30 odd years at The Chinese University, I myself have never felt so burdened. Over the past three months, University management has conducted extensive consultations through a variety of channels and held discussions with both teaching and non-teaching units over proposals to cope with the impending budget cut. Throughout the period we have also maintained close liaison w i th the two staff associations (CUTA and CUSA) to work on plans to reduce s t a f f i ng costs. Very careful and serious consideration has been given to all the suggestions put forward by the two staff unions, and those that are reasonable, practicable, and consonant with the interest of the University have been adopted one after another. The proposals therefore represent the general consensus reached with the two staff associations in a spirit of facing the difficulties together. They are designed to serve the interests of both the University and those working in it, and are geared towards two primary objectives: (i) to preserve as much as possible the University's strengths in teaching and research, so that its development can be sustained; (ii) to retain as many jobs as possible for staff, so that their livelihood w i ll not be affected. The proposals have now been approved by the University Council and we are now in the implementation phase. Implementation details w i ll be explained to you via your department and unit heads and other channels. [2] Notwithstanding the numerous consultation sessions, open forums, and meetings organized by the Personnel Office and the Bursary to explain University policies and to communicate with staff members individually or in groups, there are still various misunderstandings about the University's cost-saving measures. There are even deliberate misrepresentations and unsubstantiated accusations, alleging that the measures adopted are divisive, favouring the senior grades at the expense of the junior grades in disregard of popular sentiments. That is why I find it necessary to write this long letter to explain to you once again the true picture, and to enlist your understanding and support of our cost-saving plans. [3] When faced with a staggering annual shortfall of $384 m i l l i on in its operating budget, the University's response in respect of cost-saving is marked by the following features: (i) Phased implementation To achieve a reduction of $384 million in one go w i l l do irreparable damage to the University, entailing immediate layoffs on a large scale. The University has therefore decided to phase in the reduction over two to three years, using reserves and donations (for non-specified purposes) to meet the estimated shortfall in the first two years. (ii) Sharing of the burden The reduction is to be shared by three parties: (a) Allocations to centrally administered funds will be substantially reduced; such reductions plus transfers from University reserves w i ll account for half of the budget shortfall. (b) Teaching departments are to bear about two- thirds of the remaining half of the shortfall, which is broadly in proportion to the total appropriations they receive. (c) Non-teaching units are to shoulder about one- third of the remaining half of the shortfall, which is also broadly in proportion to the total appropriations they receive. Such sharing of responsibility can in no way be regarded as divisive or unfair across different units, (iii) Ruling out a uniform cut A budget cut like this w i l l inevitably entail a corresponding reduction in compensation levels. Apart from the 6 per cent downward adjustment to be implemented in line with the civil service pay- cut in 2004 and 2005, further revisions in salary structure will be made in the light of the following: • The University has already tightened remuneration for the teaching grades and revised the mechanism for salary reviews, resulting in a reduction in entry salary for new recruits and the abolition of automatic increments. However, the University recriuts worldwide for academic staff, and there is a need to benchma rk salaries against international standards. To remain competitive, the University has to offer packages comparable to those available at overseas universities of the same standing. (What we are now offering are already lower than those offered by our counterparts in the US.) • Non-teaching staff have all along been recruited locally. As the salary levels of comparable jobs in the local labour market have undergone a significant downward adjustment, the University as a publicly-funded organization has the duty to realign the pay levels of the grades concerned. [4] I would like to explain in greater detail the salary adjustments for non-teaching staff. According to a survey conducted by a professional consulting firm, compared with staff salaries in sizeable and well-established companies and public organizations in Hong Kong, the pay levels of CUHK Terms (A) non- teaching staff are higher than market levels by 1 to 10 per cent, and those of Terms (B) and (C) staff are higher by 16 to 30 per cent. To cushion the impact on the supporting grades, and to narrow the gap between Terms of Service (A) and (B)/(C) grades, the largest differential of 10 per cent has been adopted as the pay level adjustment for Terms ( A) staff and the smallest differential of 16 per cent has been adopted for Terms (B)/(C) staff. In other words, after discounting the 6 per cent adjustment in line with the civil service pay cut, Terms (A) non-teaching staff w i ll be subject to a further 4 per cent reduction upon contract renewal Terms (B) and (C) staff w i ll be subject to a further 10 per cent reduction. While the measures reflect the market, the impact on staff members on Terms (B) and (C) has been deliberately reduced and softened. There has been no preferential treatment for senior grades —— quite the reverse. I should emphasize too that these adjustments apply only to new recruits and those offered new contracts upon reappointment. For staff on regular-terms, the University is bound by contract and cannot cut their salaries unilaterally. Contractual obligations must be honoured. This is also one reason why the University cannot institute a salary cut across-the-board. The allegation that there is divisive treatment for those appointed on regular-terms and those newly recruited or being reappointed does not hold. What's more, the Audit Commission has criticized the University for not having economized on staffing costs through the outsourcing of services such as cleaning. The University has however made it a point when devising cost-saving measures to avoid outsourcing as far as possible, so as to minimize layoffs. Given that the current salaries of Terms (C) staff range from $8,000 to over $ 10,000, the only way to get round layoffs is to lower operating costs by reducing pay levels. Two special measures have in fact been introduced to protect the well- being of minor staff: (i) capping the level of salary reduction — the Estates Management Office has, for example, announced that any salary reductions for its staff will not exceed 10 per cent (on top of the 6 per cent reduction in line with the civil service pay cut); (ii) guaranteeing a minimum salary of $6,300 for new r e c r u i ts or those b e i ng r eappo i n t ed. (The corresponding figure for the market is $4,250). The salary levels of Terms (C) staff as suggested in our cost-saving plans are still way above the market. But then our decisions are a reflection of our appreciation of their contribution to the University. Who would not feel gratitude and appreciation for our beautiful and clean campus, the result of hard work by our colleagues, through rain or shine? [5] Dear colleagues and students, the magnitude of the funding cut is unprecedented in the 40 years of the University's history. It is indeed a grave challenge, and for our own well-being and the University's future development, we must manage the budget plan well. Hence Un i ve r s i ty management has consulted and communicated with teaching and non-teaching staff in various ways and through a variety of channels before finalizing the measures. University management has also had over 30 meetings with the two staff unions CUSA and CUTA. I believe the final plan for implementation has taken into full consideration the well-being of both the University and its staff, and has, to the extent possible, addressed the two primary objectives set out at the beginning of this letter. Of course any plan that is expected to achieve cost savings of $384 million a year necessitates some sacrifice from all members of the University. It is not what we would like, but the University has no better choice. I now appeal to all staff and students to be understanding. I have served The Chinese University for 34 years. I have always appreciated and cherished the spirit of solidarity among the staff and students in the face of adversity, and our collective ability to turn challenges into opportunities. The University again needs your support. Thank you. Ambrose King Vice-Chancellor 22nd March 2004