- The Salaries and Remuneration Commission covers civil servants, state officers and teachers.
- The commission will review the situation after two fiscal years.
Public servants looking forward to a pay rise in July should brace themselves for pain after the remunerations' agency froze salaries and other perks for two years.
The move announced on Thursday by the Salaries and Remunerations Commission will jolt thousands of civil servants and teachers pushing for higher pay.
Teachers' unions, which have been calling for a new Comprehensive Bargaining Agreement with their employer will now have to wait for 24 months.
The stage is now set for a stalemate between the government and teachers over implementation of the new 2021-2026 CBA.
The 2017-21 CBA ends at the end of the month, but teachers will not receive any pay increase as the Treasury did not factor in monies for the new CBA starting on July 1.
The Ministry of Education was allocated Sh588 billion in the 2021-22 financial year budget unveiled by Treasury CS Ukur Yatani last week.
On Thursday, Kuppet secretary general Akello Misori said teachers expect nothing short of salary increment from next month.
Misori asked why the commission is blocking all salary reviews when some cadres in the civil service have been awarded salary and allowance increments in the current financial year.
"The SRC statement will not distract us from our demand. We have activated our organs to re-engage the Teachers Service Commission ahead of the expiry of the current CBA and consider all options available in coming weeks and months," he said in a statement.
However, the SRC said there will be no review of allowances and benefits paid in the public sector in the 2021-22 and 2022-23 financial years.
Most CBAs are coming to an end on June 30, in what could have paved the way to the next four-year cycle of remuneration based on job evaluations.
The implementation of the CBAs could cost Sh82 billion over four financial years.
SRC chairperson Lynn Mengich said the commission will review the situation at the end of the two fiscal years.
The review will be based on the status of the economy, guiding the way forward for the remaining two-year period of the third remuneration and benefits review cycle.
Mengich said the Treasury advised the commission to consider postponing the review for the next two fiscal years due to the effects of Covid-19 pandemic on the performance of the economy.
“The National Treasury will review the performance of the economy and advise SRC when the review can be done based on the prevailing circumstances to ensure affordability and fiscal sustainability,” she said.
Mengich made the announcement on Thursday while releasing the outcome of the third public sector remuneration and benefits review cycle.
Labour CS Simon Chelugui, SRC vice chairman Dalmas Otieno, CASs Simiyu Wafukho (National Treasury) and Joseph Ole Ntutu (Labour) were present.
Mengich said the commission arrived at the decision considering the advice of the Treasury, the constitutional principles and SRC Act principles on remuneration and benefits.
“The commission was cognisant of the government’s financial constraints, the current wage bill ratios, the need to release resources for investment in the strategic priorities of the government to jumpstart the Covid-19-ravaged economy,” she said.
In April, the government rejected a Sh68 billion request to finance increments of salaries and allowances for civil servants and teachers starting July 1.
The Treasury wrote to the SRC turning down the request that would have made money available to fund the next phase of pay reviews.
After securing a Sh253 billion loan programme in April, the government told the International Monetary Fund it was putting in place measures to put the country’s finances in order.
The National Treasury said controlling the government wage bill can yield significant savings, which they can use to “help protect high-priority social and development spending in the context of limited fiscal space".
“This will be accomplished through continued restraint in hiring and wage awards (including in the four-year wage agreement that will come into effect in the 2021-22 financial year) and by improved wage bill management,” Yatani and CBK Governor Patrick Njoroge said in a letter to the IMF managing director.
On Thursday, Mengich said the outbreak of the Covid-19 pandemic and the resultant containment measures have and continue to impact the global economy.
“The economic growth for 2018 and 2019 averaged 5.4 per cent. In 2020," she said.
The Covid-19 pandemic adversely affected the economy, lives and livelihoods and to a greater extent businesses and economic activities.
"As a result, the economy is estimated to have slowed to around 0.6 per cent in 2020, from a growth of 5.4 per cent in 2019,” Mengich said.
She said Kenya’s economy is projected to recover and grow to around 6.6 per cent in 2021. It will be supported by ongoing investments in strategic priorities under the Big Four Agenda and implementation of the economic recovery strategy.
She regretted the current public sector wage bill consumes a larger percentage of revenue than the target set in the Public Finance Management Act 2012.
It also consumes a larger percentage of the GDP compared to the average for developing countries.
She said the total wage bill for the 2019-20 was Sh827 billion, about 51.7 per cent of the ordinary revenue.
“To jumpstart the Covid-19-ravaged economy, more resources must be made available for investment in the government priority areas,” the SRC boss said.
The SRC also directed all public sector institutions to place all jobs within the existing salary structure for the next two years, pending a review.
“Public sector institutions may implement job evaluation results by placing jobs in their rightful job evaluation grading. [They must be] subject to confirmation to SRC the funding is provided for in the current budget,” Mengich added.
Treasury CAS Wafukho said the review of salary structures should be undertaken when the economy “has been put on a trajectory of growth".
“We are happy the SRC considered our advice after looking at the situation the country and indeed the whole world is facing. We are not living in usual times,” he said.
Wafuko added that salaries should be reviewed “in the context of affordability and sustainability".
Under Section 11(e) of the SRC Act, 2011, the commission set a four-year review cycle for remuneration and benefits in the public sector.
The first review cycle ran for 2013-14–2016-17. The second review cycle was during the years 2017-18–2020-21. The third review cycle is for 2021-22–2024-25, and was to commence in 2021-22.
The SRC is mandated to set and review the remuneration and benefits of state officers and to advise on the remuneration and benefits of all other public officers.
(Edited by V. Graham)