Dispute looms over SRC’s plan to set pay for parastatals

Salaries and Remuneration Commission chairperson Sarah Serem and vice chairperson Daniel Ogutu at a press conference in Nairobi in January. Photo/File 

By ALLAN ODHIAMBO
 

There is also the cluster of State agencies such as the Communications Commission of Kenya (CCK), National Hospital Insurance Fund (NHIF), National Social Security Fund (NSSF), Capital Markets Authority and Energy Regulatory Commission that do not draw any money directly from the Consolidated Fund but are financed by fees chargeable on the public funds (in the case of NHIF and NSSF or industry players such as telecoms firms in the case of CCK.

The Salaries and Remuneration Commission (SRC) is seeking special classification of State corporations to help it set workers’ pay.

The salaries team said on Thursday the new categories would help it set fair compensation for employees based on performance as well as availability of funds.

“The objective of the study and classification is to reinforce the ongoing reforms in the public sector wage bill and productivity and performance in service delivery for purposes of ensuring equity and harmony in remuneration and benefits of the public service,” SRC said as it called for bids for study to guide the classification.

The plan by SRC is, however, expected to escalate a row with a section of trade unions, which barely a fortnight ago threatened to move to court to block the salaries team from “interfering” with the perks of State corporations employees.

“The law is very clear on the functions of the salaries commission and it should stop interfering with state corporations,” Ernest Nadome, secretary-general of the Kenya Electrical Trade and Allied Workers Union, an affiliate of Central Organisation of Trade Unions (Cotu) said.

The stand taken by the unions is supported by a recent legal opinion by Attorney-General Githu Muigai which excluded parastatals from the list of public entities whose

“From the definition of the terms public service and State organ, a person who is an employee of a State corporation or a member of the board or council of a State corporation cannot be considered to be employed in the public service because a State corporation is not a State organ by virtue of not having been established under the Constitution,” he said in November in a letter to the secretary of the State Corporations Advisory Committee.

Article 260 of the Constitution defines a public officer as “any State officer or any person other than State officer who holds a public office.”

It further defines a public office as “an office in the national, a county government or the public service, if the remuneration and benefits of the office are payable directly from the Consolidated Fund or directly out of money provided by Parliament.”

(Read: Governors protest against SRC over ‘low salaries’)

The opinion by Prof Muigai has, however, failed to settle the dispute between the two groups with the SRC vowing to push on with its quest to set the pay and perks of State corporations employees.

Kenya has a large number of State agencies that are referred to as parastatals despite the differences that exist not only in the nature of their work but also how they are financed and salaries they pay their employees.

The ambiguity of the definition of a public officer in the Constitution has not helped matters.

The Constitution’s definition of public office as any office in the public service whose “remuneration and benefits are payable directly from the Consolidated Fund or out of money provided by Parliament”, for instance, makes it impossible to exclude employees of the Kenya Revenue Authority, public universities as well as Kenyatta and Moi referral hospitals that receive annual grants from the Treasury payable from the Consolidated Fund.

There is also the cluster of State agencies such as the Communications Commission of Kenya (CCK), National Hospital Insurance Fund (NHIF), National Social Security Fund (NSSF), Capital Markets Authority and Energy Regulatory Commission that do not draw any money directly from the Consolidated Fund but are financed by fees chargeable on the public funds (in the case of NHIF and NSSF or industry players such as telecoms firms in the case of CCK.

The third group of State corporations includes agencies that generate revenue purely from their operations, part of which they use to pay the salaries of their employees and boards of directors without any support from the government. Power producer KenGen, Kenya Power, Kenya Pipeline, Kenya Ports Authority and Kenya Cooperative Creameries fall in this category.

Some analysts have argued that the AG’s opinion addresses this last group, whose remuneration does not directly come from the Consolidated Fund or what could be defined as public funds but fails to effectively deal with the first or second groups.