Salaries body to challenge new pay rise for legislators
Photo/Stephen Mudiari
Members of Parliament follow proceedings during the president's State of the Nation address in Parliament. They awarded themselves a gratuity that has sparked protests from the Salaries and Remuneration Commission.
Parliamentarians were on Tuesday headed for an epic battle with the Salaries and Remuneration Commission over last week’s passing of a new law that awards them a Sh3.72 million send-off pay.
The commission, which has the mandate to set and review salaries and allowances for all public officials, on Tuesday said it would write to House Speaker Kenneth Marende questioning the legality of the move.
“We have the overall mandate of setting and reviewing salaries and allowances of public officers and it is illegal for MPs to assume our role,” said Sarah Serem, the chair of the salaries commission.
Though the Constitution expressly bars MPs from enjoying the benefits of any law they pass on their own remuneration, the latest attempt by the parliamentarians to pocket more than Sh800 million at the end of their term appears to have been informed by a loophole in the transitional clauses.
The Sixth Schedule, which contains the transitional clauses, has frozen sections of Chapter 8 of the Constitution until the next general election – freeing the MPs from the limitation against setting their own pay.
Sections of Chapter 8 that are frozen deal with the role of Parliament, the Senate and include Article 116 of the Constitution which prevents sitting MPs from awarding themselves any form of monetary benefits.
The third clause of the article demands that in the event that MPs pass any laws affecting their pay, such benefits would be enjoyed by members of the next parliament.
“An Act of Parliament that confers a direct pecuniary interest on members of Parliament shall not come into force until after the next general election of Members of Parliament,” the Constitution says in Clause 3 of Article 116.
But the Sixth Schedule of the Constitution suspends the entire Chapter Eight until after the next general election – in effect ‘legalising’ the move by the parliamentarians.
The salaries commission has since described the MPs action as illegal, arguing that legislators cannot bypass it and award themselves any pay.
“Parliament should respect our mandate and our hope is that what was done last week is just but a proposal which is yet to be presented to us for consideration.”
Ms Serem said she had asked a legal team to examine the two conflicting clauses for a clear understanding of the legal position.
The pay deal that the MPs struck with Finance minister Njeru Githae last Thursday will see the 224 legislators — including the House Speaker and Attorney General — take home Sh833 million on the expiry of their five-year term in January.
The pay increment was legalised through an amendment to the Finance Bill, which the House debated and passed late in the night.
The amendment entitles each MP to a gratuity calculated at the rate of 31 per cent of their Sh860,000 basic pay for each year served. Each of MP is currently entitled to Sh300,000 annual gratuity payment translating to Sh1.5 million at the end of their term.
Members of the House bureaucracy also got generous pay-offs in the deal, including deputy Speaker Farah Maalim and members of the Speakers Panel who got responsibility allowances.
Mr Maalim is, for instance, set to receive a total of Sh9.6 million while the four temporary speakers will go home with Sh1.2 million each for every year served.
The 10 PSC commissioners were awarded Sh1.2 million in responsibility allowance for each year served, backdated to 2006.
Members of the Ninth Parliament who held similar positions are also set to benefit from the new payments.
Legislators have been the target of public anger over what is seen as an unjustified skewing of public sector pay in their own favour.
Fred Nyayieka, the executive director of Pensions Advisory Kenya, said the trend of MPs awarding themselves huge pay perks has become the norm every five years.
“MPs who have served two consecutive terms are already entitled to benefit from the pension scheme which is one of the most generous in the country,” said Nyayieka adding that a further payment of gratuity amounts to double compensation and is a clear attempt to cushion one-term lawmakers who do not make it back to Parliament and are therefore not be eligible for the pension.
The stage is now set for a battle between the SRC and Parliament with lawyers arguing that the commission’s mandate should be respected.
“Parliament cannot usurp the powers of an independent commission. The Constitution describes MPs as state officials and therefore their salary reviews automatically fall under the SRC,” said Kenneth Akide, a former Law Society of Kenya chairman.
Mr Akide said that the Constitution allows any member of the public to – as an interested party – seek interpretation from a constitutional court on such matters as one of the avenues of recourse.
MP Mohammed Affey has since argued that the amounts are justified given the enormous responsibilities MPs shoulder and challenged those who think the move is illegal to go to court.
MP Millie Odhiambo, who was the only legislator to oppose the gratuity increment, described the manner in which the amendment was brought into Parliament as “sneaky”.
“MPs may feel they deserve the money for all the work they have done in the past five years but it should have been done in an open and transparent way and most of all involve the SRC,” she said.
Last week’s gratuity allocation is just but one of the many carrots that the Ministry of Finance dangled before MPs to influence the passing of the Finance Bill.
It has emerged that MPs demanded a doubling of their winding up allowances to vote against a proposal by Gem MP Jakoyo Midiwo to cap commercial bank interest rates at four percentage points above the Central Bank Rate (CBR). The deal was reportedly struck at a luncheon hosted by Mr Githae.
In January, the Treasury increased the mortgage ceiling for Members of Parliament by Sh5 million each, raising the allocation to Sh20 million, up from Sh15 million.
The amendment to the Parliamentary Management Scheme Fund Regulations 2011 allowed MPs a longer time to repay the supplementary mortgage, before the 30th day of June, 2012 or two months before the General Election whichever date is later. The amendment was gazetted by former Finance minister Uhuru Kenyatta.
Loans under the scheme are charged an interest rate of three per cent per year, a discounted rate made possible because MPs are exempted from paying the low interest benefit tax, which is pegged on prevailing Treasury Bill rates of the previous six months.
This is much lower than banks’ average mortgage rate of 19 per cent.
