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AG and Treasury oppose proposed huge pay increase for teachers

By Fred Makana | February 24th 2015 at 12:49:00 GMT +0300

National Treasury Cabinet Secretary Henry Rotich

The Attorney General and the National Treasury have opposed any increase in teachers’ salaries saying that it will trigger similar clamour from other civil servants.

AG Githu Muigai, who was enjoined in the suit as an interested party, and National Treasury Principal Secretary Kamau Thugge said this in their memorandum to the Industrial Court that is arbitrating the pay dispute between teachers and their employer.

In their response through lawyer Stella Munyi, the AG and the National Treasury said no salary increments should be negotiated before a job evaluation exercise for the entire public service is conducted.

“It is clear from key parameters of assessing sustainability, the current status of the economy cannot afford any further unplanned salary adjustment,” said the Treasury PS in his response.

Mr Thugge said that the Treasury had a way of cushioning public officers against cost of living and inflation and has accepted to implement recently approved allowances amounting to Sh19.6 billion of which teachers will receive Sh9.3 billion

Muigai and Thugge said job evaluation of public officers is set to be conducted in 18 months time, and the Treasury is concerned about the spillover effect that an increase in basic salaries of teachers would have on other public servants.

The PS said if the teachers were awarded the pay increase, then it would require the Treasury to institute additional tax measures especially on VAT from 16 per cent to 84 per cent which is over 400 per cent increase.

“This will push the price of basic commodities and services up and subject many Kenyans to abject poverty and is equally not feasible option,” said the PS in the court documents.

Last week, the Central Planning and Monitoring Unit (CPMU) of the Ministry of Labour proposed to the court that teachers deserve a 128 per cent salary increase of Sh137.2 billion which is to be spread over four years.

The teachers’ unions called off a two-week strike in January after Justice Nduma Nderi stepped in to arbitrate the pay dispute.

Analyse memorandums

The CPMU was tasked by the court to analyse memorandums of the Kenya National Union of Teachers (Knut) and Kenya Union of Post-Primary Education Teachers (Kuppet) against those of the Teachers’ Service Commission (TSC) and Salaries and Remuneration Commission (SRC) to guide the court in the negotiations.

But yesterday, Cabinet Secretary Kazungu Kambi said at a Press Conference that the Government cannot afford a salary increment at the moment and denied that the CPMU proposed a salary increment in its memorandum.

During the mention of the case yesterday, the TSC renewed its bid to have the application challenging the court’s jurisdiction to handle the matter heard as a priority.

TSC’s lawyer Allan Stima asked the court to assume that the application had been granted since Knut and Kuppet have not filed their replying affidavit to the application.

“The two unions have not filed an response to our application. I therefore ask the court to assume that the application challenging the jurisdiction of the court to preside over the salary negotiation process has been granted,” Stima argued.

But Justice Nderi directed both the application and the main petition on the salary increase be heard simultaneously once the hearing of the case commences on March 11.

“A proper reading of the report will make it clear that the Government cannot afford any salary increments. The report agrees with the Salaries and remuneration Commission that no salary increments are sustainable at the present moment,” Kambi said.

“In order for any salary increment to be done, there has to be job evaluation and that means we would need 18 months to conduct the same,” Kambi added.

The Treasury also told court that the Government’s huge investment in mega projects co-financed by development partners would not allow the exchequer to borrow to pay teachers’ salary demands.

The Government insisted that only the SRC is mandated by law to manage the public wage bill and its recent efforts to set and review remunerations and benefits was supported by the Government.

Thugge also said the SRC had harmonised salaries and allowances for teachers and civil servants and the demands by teachers would have to apply to the entire public service.

The institutionalisation of the SRC in the Constitution, according to Mr Thugge, was an important step towards reforming the public sector, because it linked remuneration to the cost of living, on-the-job performance and productivity, and ensured that salary awards were sustainable.

According the Treasury, if the teachers’ demands are effected, they would push the wage bill for the national government to Sh808. 1 billion from the current Sh568 billion.

“If the public wage bill is too large relative to the GDP, it takes a significant share of our country’s entire resources produced domestically. This places a huge burden to resources and weakens our national competitiveness,” Thugge said.

Wage bill

He said that the Government’s current wage bill accounts for 52 per cent of the revenue collected by the Kenya Revenue Authority for payment of salaries and allowances, and was in excess of the recommended 35 per cent.

“The option of additional borrowing means increased public debt. It is also not prudent to borrow, whether from foreign or domestic sources, to cater for recurrent expenditure, and in this case salary awards... No development partner will be ready to lend to finance payment of salaries,” Thugge said.

He said that increased domestic borrowing will crowd out private investment, push up interest rates up and undermine employment creation efforts and contravenes the principles of public finance as outlined in the Constitution.

“We cannot therefore afford to reduce the provision for operations and maintenance any further to cater for the salary increase. This leaves us with the option of reducing the development expenditure,” the Treasury PS said.

teachers pay rise Henry Rotich
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