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Economy

Unions demand use of inflation in setting public service salaries

Parliament Buildings: The SRC has recommended major pay cuts for state officers beginning with the President, his deputy and Members of Parliament. File
Parliament Buildings: The SRC has recommended major pay cuts for state officers beginning with the President, his deputy and Members of Parliament. File 

Trade unions Wednesday warned the Sarah Serem commission that they will not accept remuneration schemes that do not reflect the prevailing cost of living in Kenya.

Speaking a day after the Salaries and Remuneration Commission (SRC) released proposed pay perks for senior State officers, the workers’ representatives also vowed to resist any cuts in public sector jobs and the four-year pay review cycle terming it ‘too lengthy to cater for their needs’.

“The international standard for salary review cycles is three years and this is what we expect from the commission. Lengthy cycles do not help our cause because the cost of living is dynamic,” said Wilson Sossion, the chairman of Kenyan National Union of Teachers (Knut).

Mr Sossion spoke as the SRC entered the final stage of setting the new public service pay scheme meant to arrest the rise in government wage bill and instill equity in the pay structure. The SRC has already released a proposed pay plan for senior State officers.

The commission, established under Article 230 of the constitution, has powers to set and regularly review the salaries and benefits of State officers and advise the national and county governments on the remuneration and benefits of other public officers to keep the total public compensation bill at a fiscally sustainable level.

On Wednesday, Mr Sossion’s hard stance got the backing of the Universities Academic Staff (UASU) that is also opposed to the four-year review circle.

“Keeping workers waiting for four years is not fair and we will stick to the international window of three years. As far as we are concerned we shall be coming for and demand for reviews every three years.”

A government taskforce appointed nine years ago had recommended a two-year review circle but SRC reckons that a four-year cycle is more practical given the delicate and comprehensive nature of engagement needed to attain sustainable deals.

The Union of Kenya Civil Servants (UKCS), however, broke ranks with the teachers and lecturers insisting that the commission is within the law to set the review cycle at four years but promised a thorough scrutiny of the packages offered.

“We shall keep an eye on the packages recommended and the actual indices on the cost of living. What is offered must reflect the reality on the ground,” said Jerry ole Kina, deputy secretary-general of the UKCS.

Mr Kina also warned that the union would resist any attempts to downsize the civil service as part of the efforts to ease pressure on the budget.

“We will not tolerate any attempts by the government to remove our members from service because it is the civil servants who do the actual job while State officers who are in the minority gobble up the bulk of the wage bill,” he said.

Finance minister Njeru Githae said on Tuesday that Treasury would consider job-cuts as part of the plan to tame runaway wage bill. “Experience elsewhere indicates that countries that have been able to reduce their wage bill and retain key skills have had to take bolder actions such as closing about one-third of their ministries,” he said at the launch of the new pay structure for state officers on Tuesday.

According to the Economic Survey 2012, Kenya had about 220,000 government employees at the end of 2011. Kenya’s public sector wage bill has risen at an average of 13 per cent annually in the past three years.

In the current financial year the wage bill rose by 30 per cent, saddled by hefty awards to teachers, lecturers, health workers and the police to stand at 12 per cent of the GDP up from about 9 per cent of GDP in 2011. This is nearly twice the 6.5 per cent sub-Saharan Africa average.

Initial signals of a looming job cuts first emerged in the Budget Policy Paper released in January where the Treasury indicated that a leaner public service would be a key focus in managing scarce resources in the next financial year.

“Choosing between competing objectives under tight fiscal strains will be needed at this moment. Therefore, difficult choices must be made to ensure that scarce resources are directed to priority areas of economic development,” the paper said.

The SRC has backed this proposal with a call for a freeze in new public sector hiring to curb the rising wage bill.

But Mr ole Kina insisted that the union would not accept any job cuts and urged the government to cut back on non-core activities.

“There is actually a shortage of staff in key sectors such as healthcare. This means that talk of job cut is misplaced. They need to first deal with the huge perks enjoyed by State officers who do little in the big offices,” he said.

The SRC has already recommended major pay cuts for the majority of the 3,760 state officers beginning with the President, his deputy and Members of Parliament.

In the new structure the commission has recommended that the Head of State be entitled to a maximum monthly gross salary of Sh1.75 million, down from the current Sh2 million while the deputy President’s pay will be slashed to Sh1.48 million from Sh1.93 million.

MPs, hugely unpopular for awarding themselves hefty salaries and allowances in recent years, have suffered the biggest blow with a cut in their gross pay to Sh740,927 from the Sh851,200 that members of the 10th Parliament earned.

The biggest blow to the MPs take-home however lies in the fact that the their gross pay is now fully taxable unlike in the past when the taxman was limited to having a share of the Sh200,000 basic pay allowing the legislators to walk home with more than Sh600,000 tax-free.

With income tax standing at the rate of 30 per cent, MPs are bound to take home less than Sh520,000.

Those running for Senate positions, however, appear to have suffered the biggest blow having been left in the same pay scale as their counterparts in the lower house despite the fact that they will represent the same territory as governors.

“We are introducing relativity in the Public Service pay scheme. This should translate into improvements at the lower levels as we cut back at the top or maintain what is there at the same level,” Mrs Serem said when she launched the new scheme in Nairobi.

Charles Nyachae, the chairman of the Commission on the Implementation of the Constitution (CIC), is among the top public officers who are headed for leaner times under the new pay scheme.

He will earn a salary of Sh1.08 million down from the current Sh1.24 million, translating to a net pay of about Sh700,000.

Mr Nyachae’s pay was the subject of heated exchanges with MPs after he opposed the legislators’ attempts to increase their pay in the dying days of the 10th Parliament.

MPs hit out at Mr Nyachae for pushing the State into paying him a salary that is higher than that of chairpersons of other independent commissions such as the Commission on Revenue Allocation (CRA) and the Independent Electoral and Boundaries Commission (IEBC).

The salaries commission has firmly dealt with the matter, putting Mr Nyachae at par with IEBC chairman Ahmed Issack Hassan whose pay will rise to Sh1.08 million, up from the current Sh874,720.

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