New order freezes public service pay

A new order freezing salaries of civil servants, teachers and parastatal workers has sparked an uproar among trade unions.

At least 400,000 public servants are subject to the indefinite government ban on reviews of basic pay and allowances including house and medical perks.

The order was made through a circular by Head of Public Service Francis Muthaura dated May 25, just two weeks before the 2011/2012 budget statement was delivered in Parliament.

All salaries and allowances determined after August 27, 2010 when the new constitution was effected will also not be honoured, Mr Muthaura said.

Wage reviews will only start after the formation of the Salaries and Remuneration Commission in line with the new constitution, the circular said.

However, a number of union officials protested on Friday that the action was unconstitutional and amounted to abrogating the constitutional right of workers to negotiate terms.

“The government wants to run away from the rightful systems of determining salaries for public workers,” said Knut chairman Wilson Sossion, adding that the union had already written to President Kibaki citing “flaws” in the proposed Salaries and Remuneration Commission Bill.

He said the proposed commission’s function should be limited to advising the government on salaries but not “determining”.
A bill proposing the formation of the commission is currently before Parliament.

The country’s 215,000 teachers were expecting increments in house and commuter allowances in the next financial year that starts next month.
Lecturers of public universities were also expecting new salaries as were workers of Telkom and the Postal Corporation of Kenya. 

Mr Muthaura said only salaries that were approved before August 27 last year would be implemented. It means the 20 per cent salary increment for teachers agreed in 2007 will be implemented next month as agreed.

In a circular dated May 25, Mr Muthaura said past salary reviews, undertaken through various committees and commissions, collective bargaining agreements and independent reviews by individual state corporations, had become a source of inequity and disparities inn remuneration.
County governments

The Permanent Public Remuneration Review Board, meant to review the salaries, was constrained by lack of a legal framework to support the board’s mandate, he said.

“Following the establishment of the Salaries and Remuneration Commission in the new constitution with the mandate to determine and advise the national and county governments on remuneration for state and public officers, it has been decided that with effect from the date of this circular, no setting of review of salaries and allowances will be undertaken outside the purview of the (Salaries and Remuneration) commission.

“This (review) will therefore have to wait until the commission has been operationalised through an Act of Parliament and provides the necessary advice on these matters,” he said.

All the newly created commissions and independent offices under the constitution, he said, will adopt the remuneration structure provided for in the constitutional officers remuneration Act, 2009.

But this will change when the Salaries and Remuneration Commission provides a structure for each of the commissions.
“Previously approved remuneration levels contained in the collective bargaining agreements registered before August 27, 2010 when the new construction was promulgated may be implemented as provided for,” he said.

“Respective permanent secretaries and accounting officers responsible for various public service sub sectors are required to monitor and ensure compliance with the decision,” he wrote.

The circular is copied to the Attorney General Amos Wako, all ministers, the inspector general of state corporations, and the secretary of the state corporations advisory committee.

Workers likely to be affected would be those working in State House, the State Law Office, public universities, state corporations, parastatals and local authorities.

The circular is bad news for workers who are reeling from increasing inflation, which has continued to increase for the last eight months to stand at 12.95 per cent in May. This has been fuelled by high international oil prices in the face of a weak shilling and food shortages.
The Universities Academic Staff Union national chairman Sammy Kubasu termed the move a blow to public servants and proposed that it be withdrawn.

“We are in the middle to negotiating an overdue CBA and cannot be happy with the government decision,” Prof Kubasu said.
The union, he said, started discussing the 2010/2011 salaries negotiation last year and were expecting a response from university administrators.
The lecturers were demanding a salary increment of 300 per cent.

“That is now under jeopardy,” Prof Kubasu said adding the move would now be discussed in the next national executive council.

Negotiated terms

He said the decision would disadvantage lecturers because “our salaries are much lower than our colleagues in the region”.
“We are unsure any new salaries fixed by the proposed commission will match our expectations,” he said.

But the Kenya National Union of Teachers national chairman Wilson Sossion called for the withdrawal of the circular saying it was against the constitution.

He claimed it was the right of the workers to have unions that negotiated terms and conditions of service for all the workers.

Mr Sossion said the union was preparing to start a fresh salary negotiation process, which would be led by the TSC.

“We do not understand why the government is hurrying up to gag us from negotiating for our right to collecting bargaining agreements,” he said.
“Our freedom can’t be curtailed by a permanent secretary,” he said, calling for the circular’s withdrawal.

The Communication Workers Union secretary general Benson Okwaro faulted Mr Muthaura for not consulting before issuing the circular.
We shall continue to champion the interests of our members including better salaries and benefits for them,” he said.

He said rights to collective bargaining agreements were enshrined in the constitution and shouldn’t be denied to workers.
“The circular has been issued in bad faith and should be withdrawn immediately,” he said.

The union, with a membership of 6,000 workers, had received a salary offer for proposals for some of its members, which now appear to face the chop.
The Central Organisation of Trade Unions (Cotu) secretary general Francis Atowli opposed Mr Muthaura’s  notice arguing the Constitution guaranteed the right to collective bargaining agreement (CBA).

“It is misleading for Mr Muthaura to classify all these employees as addressed in his letter to be State officers as defined in the new Constitution and the role of this commission is purely advisory and not meant to determine the amount of money to be paid to an individual as a wage, “ he said..
The Cotu boss said in a statement that some of the institutions “are public organisations owned jointly by members of the public and listed on the Nairobi Stock Exchange and as such they cannot be confined, related and or equated to be operating under the Civil Service.”

Mr Atwoli termed the circular “baseless and should be ignored.”

Collective bargaining
“The new Constitution in chapter four part two, section 41(5) gives every employee the right to collective bargaining and for the government to direct in its letter that employees will no longer be allowed to engage their respective employers in collective bargaining, including the Head of Public Service unilaterally revoking existing Collective Bargaining Agreements, is itself unconstitutional and likely to spur massive industrial unrest in this country.”
He said Cotu and its 36 affiliates would ignore the circular.

Reading this year’s budget, Mr Kenyatta said: “Wage levels in Kenya are now among the highest in Africa thus posing a challenge for our competitiveness,” said Finance Minister Uhuru Kenyatta, in his budget speech on Friday.

He said in the public service, there were wage gaps among cadres of officers with more or less same level of training.
“This situation is occasioned by uncoordinated wage awards and reviews, “ Mr Kenyatta said, pointing out that the overall wage bill in the civil service, excluding Defence and National Security and Intelligence Service, now stands at 7.2 per cent of gross domestic product (GDP). This is an increase from about 6.9 per cent last year and it now costs the Exchequer Sh222.6 billion.

“Unless this level of wage bill is checked going forward, the government will not be able to provide adequate resources for operations and maintenance, let alone fund critical development programs,” he said.

He urged Parliament to fast-track the approval of the Bill establishing the Salaries and Remuneration Commission, which as per the Constitution will handle all salary reviews and awards in the civil service.

Early this year, Treasury promised the International Monetary Fund a three-year public sector wage freeze, meaning government employees face a tough sail in an economy under increased inflationary pressure.

The push from IMF means that employees should expect marginal or no adjustments to their pay in line with prevailing inflation rates, setting Treasury up for battle with the workers’ union.

Over the years, the government wage bill has been going up, increasing by 7.5 per cent from Sh243.8 billion in 2009 to Sh262 billion in 2010, according to the Economic Survey 2011.