Public agencies asked to furnish SRC with details of allowances

What you need to know:

  • The SRC said it is its constitutional mandate to set, regularly review and advise on allowances paid to public service officers.
  • Commission to review and issue advice on allowances to individual public institutions by the end of April 2022.

Public institutions have up to November 30 to submit to the Salaries and Remuneration Commission (SRC) details of all allowances they pay to their employees.

The agency on Thursday issued 10 allowance policy guidelines for the public service, requiring the institutions to identify allowances that should be retained, restructured, merged and renamed, or abolished, before the SRC issues a final advisory on the way forward.

“Public service institutions shall furnish SRC with all allowances payable in their institutions, identifying allowances that fall into retention, restructuring, merging and renaming, and abolition. SRC shall set, review and advise on allowances to be retained, restructured, merged and renamed, and abolished,” said SRC Chairperson Lyn Mengich.

Failure to submit the data by the deadline, the commission warned, would render allowances paid by the respective institution legally inapplicable.

The policy guidelines are, among other things, aimed at streamlining payment of allowances in the public service, abolishing redundant and overlapping allowances, ensuring allowances are paid at the required rates and ensuring that public institutions implement mechanisms to ensure allowances are capped at a maximum of 40 per cent of an employee’s gross pay.

The SRC said it is its constitutional mandate to set, regularly review and advise on allowances paid to public service officers, indicating that the framework used to set allowances before its establishment – where different bodies were involved – ended up creating about 247 allowances as well as disparities and unfairness.

“The proportion of allowances to gross salaries as per a study by SRC in 2019 ranges from 43 to 259 per cent of gross salary, leading to a lower percentage of basic salary to gross salary in the public service. There shall be a streamlining of allowances to progressively achieve a proportion of basic salary to gross salary that is no less than 60 per cent while taking into account the impact on pension,” Ms Mengich said.

Allowances payment formula

She said after the November 30 deadline, the agency would review allowances on a case-by-case basis, then issue advisories to individual institutions by end of April 2022.

“Allowances that are currently obtaining shall continue to be paid until SRC issues an advisory to public service institutions. Submission of data on allowances by individual public institutions is expected by November 30, 2021. The commission will review and issue advice on allowances to individual public institutions by the end of April 2022, following which compliance checks to enhance adherence to policy guidelines will be conducted by the commission,” she said.

The decision many not, however, have an immediate impact, since government employees hired on contract will continue to enjoy the amounts they earn as allowances.

“Going forward, for new employees who join public service, the new guidelines will apply automatically. However, those with contractual obligations will not be affected,” Ms Mengich clarified.

The commission also requires that allowances in the public service be paid in absolute terms as opposed to being computed as a percentage of gross salary.

“Where an allowance is paid as a percentage of basic pay, it means every time the basic pay goes up, then the allowance also increases. Such allowances should not be increasing just because basic pay has increased. There must be some fundamentals that are being used for that allowance to increase,” said commissioner John Monyoncho.

The commission further said public institutions cannot cite ability to pay as a justification for paying higher allowances, saying all institutions will apply a standardised formula in payment of allowances to ensure fairness and equity.

“The ability to pay higher allowances by any public service institution shall not be sufficient justification for the increase in allowances. If it means that one group of public service employees will earn a gross remuneration package that is out of step with those of comparable groups of public officers,” Ms Mengich said.

Developing policy guidelines

The SRC has categorised allowances payable in the public service into house allowance, commuter allowance, job-related allowances – which account for the greatest proportion of allowances in Kenya’s public service, task-related allowances and labour-market-adjustment allowances.

“SRC shall set, review and advise on the allowances that constitute the five categories, outlining the purpose, eligibility criteria, rate and scope,” Ms Mengich added.

She said the commission is also developing policy guidelines that will provide guidance on pensionable pay and employer contribution levels in the public service, indicating that allowances shall not be used to compute pension as some institutions currently do.

The agency said it had already issued a standard template for institutions to key in data.

But the commission clarified the changes would be implemented progressively and that timelines for full implementation will be issued on an individual institution basis.

The commission also says it has not determined the amount of money to be saved in the public service through implementation of the guidelines, saying that will be clear once the implementation starts.

“If an institution fails to submit the data, it means those allowances cease to apply because they have not been properly advised,” Ms Mengich said.

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