Teachers, civil servants reject two-year pay increase freeze

The Salaries and Remuneration Commission (SRC) announced there would be no salary increments for all civil servants for two years beginning July, amid admissions from the National Treasury that it is struggling to get enough money to run government. 

Teachers and lecturers in public universities will also be affected by the decision. The suspension affects the workers’ basic salary, allowances and other benefits.

The new move will hit public-sector workers hard, coming just months after the SRC directed all public institutions to ensure workers’ allowances do not exceed 40 per cent of their pay.

Read: Can you answer this honestly: Is the government broke?

Implementation of the directive begins next month and will have the effect of reducing incomes earned by a majority of government workers who have been relying on allowances to make extra money.

“This means there will be no public university education for those two years. SRC wants to create a crisis as public sector workers will down their tools,” Universities Academic Staff Union (Uasu) Secretary-General Constantine Wasonga told the Daily Nation. 

The SRC Thursday said the decision to suspend implementation of the third remuneration review cycle had been prompted by the difficult economic times the country finds itself in, largely due to the Covid-19 pandemic.

“The National Treasury advised the commission that due to the effect of the Covid-19 pandemic on the performance of the revenue and the expected slow economic recovery, it should consider postponing the review for the next two fiscal years until the economy improves and the National Treasury will review the performance of the economy and advise SRC as and when the review can be done based on the prevailing circumstances to ensure affordability and fiscal sustainability,” SRC Chairperson Lyn Mengich said.

Two-year freeze

The commission said the government would save a substantial amount from the Sh82 billion it would have spent on implementation of the 2021/22 - 2024/25 remuneration review cycle.

Ms Mengich said the commission considered the government’s financial constraints, the current wage bill and the need to release resources for investment to jumpstart a Covid-19-ravaged economy.

In line with the new directive, no additional funding will be provided for implementation of job evaluation results in the financial year 2021-2022 and 2022/2023.

The commission also stated that public-sector institutions will be required to fully implement the Allowances and Benefits Policy beginning July, which now requires that all the allowances government workers earn should not exceed 40 per cent of their total pay.

Ms Mengich said the agency would review the situation after the two years “and based on the status of the economy, guide on the way forward for the remaining period of the third remuneration and benefits review cycle”.

“Public-sector institutions may implement job evaluation results by placing jobs in their rightful job evaluation grading, within the existing salary structures and approved budgets, subject to confirmation to SRC that the funding is provided for in the current budget,” she added.

The two-year freeze is a big blow to 330,671 government-employed teachers, whose current CBA expires in two weeks. 

Teachers have been eagerly waiting for the Teachers Service Commission (TSC) to table counter-offers to the pay increase proposals presented by the Kenya National Union of Teachers (Knut) and the Kenya Union for Post-Primary Teachers (Kuppet).

Lecturers in public universities, who have also been agitating for a salary increase, are also staring at bleak times ahead. 

Also read: Teachers: It’s pay rise or strike in July

Bad for workers

Knut secretary-general Wilson Sossion rejected the decision immediately it was announced, saying the government was using Covid-19 as an excuse to deny workers their rights. 

“It is fundamentally wrong for SRC to succumb to the Treasury. Even if the economy is bad, it’s bad for workers also. The government is spending too much on capital investments at the expense of the social sector,” he told the Daily Nation. 

His Kuppet counterpart, Mr Akelo Misori, also condemned the freeze, adding the union would issue a comprehensive statement after a meeting of the national executive committee of the union.
Last week, the union wrote to the TSC demanding a counter-offer to their CBA proposals. 

“To restate the obvious, teachers expect nothing short of a salary increment and the SRC statement will not distract us from our demand. We have activated our organs to re-engage the TSC ahead of the expiry of the current CBA and to consider all the options available to us in the coming weeks and months,” he said. 

The Union of Kenya Civil Servants also rejected the reasons advanced by the commission and vowed a fight to ensure their members are cushioned  from the high cost of living occasioned by the pandemic.

First Deputy Secretary-General Jerry ole Kina declared that SRC lacks the mandate to make the kind of pronouncement it made Thursday as it doesn’t collect taxes.

“Let the SRC focus on the mandate bestowed on them by the constitution. They don’t collect taxes and therefore lack the legitimacy to make the kind of decision they have done,” he said.

“The import of the statement is that it is only the economy that has been affected by the pandemic,” he said, adding that the decision amounts to condemning millions of Kenyans who have been hit by the pandemic in the last two years.

“SRC should come down from their ivory tower, consult stakeholders and make a decision based on public participation. Price indices have sky rocketed in the last two years forcing a steep down spiral in purchasing power for most of Kenyans workers,” Mr Ole Kina added. 

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Public wage bill

The SRC’s decision comes at a time Kenya’s public wage bill has been on an upward trend for over five years, growing by 34.5 per cent between 2015 and 2020.

Figures from the commission show the wage bill has grown from Sh615 billion in the 2015/16 financial year to Sh664 billion (2016/17), Sh733 billion (2017/18), Sh795 billion (2018/19) and Sh827 billion (2019/20).

“The current public sector wage bill consumes a larger percentage of revenue than the target set in the Public Finance Management Act 2012 and a larger percentage of GDP compared to the average for developing countries. To jumpstart the Covid-19-ravaged economy, more resources must be made available for investment in the government’s priority areas.

To release resources for investment in the priority areas, the wage bill-to-revenue and wage bill-to-GDP ratios must take a trajectory towards achievement of the target ratios,” Ms Mengich said.

She said if Treasury’s revenue targets are met in the coming financial year, the freezing of pay increments would have the effect of reducing the  wage-bill burden on Kenya’s revenues from 51.7 per cent to 48 per cent.

The decision also comes at a time Treasury has admitted the country is running broke, with disbursements to county governments, ministries, departments and agencies (MDAs) lagging behind.

“There is a challenge of revenue performance as a result of slowed economic activities and this is not unique to counties. We have challenges disbursing funds to the MDAs and are really falling behind,” Treasury CS Ukur Yatani told the Senate this week.

On Tuesday, TSC boss Nancy Macharia said the commission was waiting for advice from the SRC. 

“The unions have presented proposals to us, which we have studied. We are now awaiting advice from the Salaries and Remuneration Commission on the best way to proceed, based on an ongoing job evaluation. We request our teachers to remain calm as we await the SRC’s advice while remaining aware of the existing macro-economic situation of the country, which has been heavily impacted by the negative effects of Covid-19,” she said.

Additional reporting by Ibrahim Oruko