Big pay rise in private sector

Photo credit: NOAA Newswire 

By Samuel Kamndaya  (email the author)

Posted  Wednesday, May 29  2013 at  22:06

In Summary

• We have also raised basic salaries for four new sub-sectors--construction, private schools, energy and communication.

Dar es Salaam/Dodoma. The government has announced a rise of between 25 per cent and 65 per cent in the minimum wage of workers in the private sector. The change takes effect from July, about five years after the first attempt to do so failed.

The Labour and Employment minister, Ms Gaudensia Kabaka, told the National Assembly yesterday that her ministry has successfully completed a research as well as consultations and minimum wages for employees in 12 sub-sectors of the private sector will be raised officially on July 1.

“My ministry has thoroughly researched and consulted with employers in the 12 sub-sectors within the private sector and arrived at a conclusion that basic salaries should be raised on July 1, 2013,” she said, moving a motion requesting the National Assembly to endorse a total of Sh14.959 billion for her ministry in the 2013/14 financial year.

The pay rise comes in the wake of consultations with the private sector, employers and workers’ unions. The minimum wage for a worker in the industry and trade sub-sector will go up by 25 per cent. In the hotel and home services sub-sector, it will rise by 55.2 per cent.

The statutory basic salary for workers in the private security sub-sector will go up by 46.4 per cent. Their counterparts in the mineral sub-sector will enjoy a 25.2 per cent boost to their basic salaries. Workers earning basic salaries in the fisheries and marine sub-sector will earn 21.2 per cent more while those in the health sub-sector will get the highest increase--a cool 65 per cent.

The statutory basic salary for workers in the transport sub-sector will go up by 49 per cent while the basic salary in the agriculture sub-sector will rise by 42.9 per cent.

“We have also raised basic salaries for four new sub-sectors--construction, private schools, energy and communication,” she said, noting that inflation and the need to protect investments were considered in upgrading the basic salaries.

The decision to raise statutory minimum wages for private sector employees comes after years of debate dating back to November 2007, when employers put up stiff resistance to an abrupt increase.

The Confederation of Tanzania Industries (CTI) said the 25 per cent award in the industries and trade sub-sector was “reasonable”. The organisation’s member had recommended that same figure to the wage board.

CTI Executive Director Christine Kilindu told The Citizen: “We are ready to pay the amount recommended in the budget speech but if there are any additional changes in the wage order (to be published later in the Government Gazette) against our proposal, we will hold further consultations.”

Representatives of employers and workers said they were consulted during the crafting of new wages but they would have to establish the details of the wage order before making any comments. The secretary general of the Trade Union Congress of Tanzania (Tucta), Mr Nicholas Mgaya said: “Let’s wait for the government wage order to get a clear picture.”

Tucta will carry out an evaluation of the wage order before deciding what to do, he added. The unionists also intend to meet President Jakaya Kikwete after the budget parliamentary session in June to discuss worker demands. “If there are any complaints, we will not hesitate to tell the President,” Mr Mgaya added.

  

 

The executive director of the Association of Tanzania Employers, Dr Aggrey Mlimuka, told The Citizen: “I have to see the government wage order that will be published in the Government Gazette soon, then we will check the proposal we made to the wage board.”

Ms Kabaka said yesterday that the decision to conduct a study on the right amount to be paid in minimum wages for employees in the private sector stems from the fact that they have been complaining about low wages and requested the government, through its sectoral wage boards, to upgrade the package.

Wage boards, which are responsible for maintaining agreements between registered trade unions and employer organisations, have reportedly carried out research and considered issues that matter to employers.

She added: “Issues like living expenses, productivity of employers, employers’ capacity and availability of employment opportunities have all been considered in line with the Labour Institutions Act 2004. Actual minimum wages will officially be announced in the Government Gazette.” Ms Kabaka’s statement did not go unchallenged, however, with Opposition Spokesperson for the ministry, Ms Cecilia Pareso (Special Seats - Chadema), questioning the rationale behind spending millions of shillings on a study to ascertain something that is “well known”.

It was unfair of the government, she added, to spend Sh60 million in the 2012/13 financial year to facilitate the study. Ms Pareso added that it was equally lacking in merit for the government to spend another Sh55 million in 2012/13 to facilitate meetings for the 12 sectoral wage boards. In the 2013/14 financial year, a total of Sh82.925 million is being sought for the same purposes.

 “This, ironically, means that we have spent a total of Sh197.925 million to undertake a study to establish something that is already known….Did we really need to conduct studies and facilitate board meetings to establish that people in the private sector need salary increments?” she asked