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 Bomeanisation 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 upto 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 Bomeo Divisions I and II and scale C4 to 6 of Division II and equivalent grades N5-7 and P8-9 (except in respect of the Pelice) serving in Federalised Departments will be seconded for an ndefinite 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 thal 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 Borco conditions of service until posted outside the Borneo States.
4. The Federal Government will he responsible for the emoluments of all officers serving in Federalised Departments and will pay all the officers direct Until mcome tax throughout Malaysia is made umform the remuneration of exi ting 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 Bomeo 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 Goverment to presenbe, 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 recrutment 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.
