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Archive -Seychelles

New law addresses public service salary review |20 December 2013

The salaries of public service employees will as of next year be reviewed based on a newly introduced salary table for employees of this sector and the National Assembly yesterday unanimously approved the legislation to make this possible.

The Public Service Salary Bill, the first of its kind to be published in Seychelles, was tabled before the Assembly by Vice-President Danny Faure in his capacity as the minister responsible for Public Administration.

Vice-President Faure also tabled a series of amendments to various emolument acts relating to different categories of employees in the public service to bring them in line with the new Public Service Salary Bill. All the amendments also received the Assembly’s approval.

Presenting the Bill Vice-President Faure pointed out that human resource is the most important asset that any country and any organisation can have, therefore adopting a fair remuneration scheme is vital in order to have a motivated and effective public service.

“We are today embarking on a process which I am confident will help us improve on the reward mechanisms in the public service,” said VP Faure.

“It is a process that we intend to build upon and strengthen in the months and years ahead,” he added.

He pointed out that salaries of posts in the public service are based on a system of job evaluation which takes into account such factors as the complexity of the work involved, the level of education and training required for the job, the level of supervision exercised in the post, the level of interaction required with other officials, the level of experience required and other special circumstances of the job.

VP Faure noted that this method works well for most general public service posts, but becomes more arbitrary and market‐oriented as we reach the level of chief executives and constitutional appointees.

He explained that chief executives in the public sector are employed on three‐year contracts, and their salaries are reviewed on a performance basis each time their contracts are renewed.

“The pay of constitutional appointees, such as members and leaders of the National Assembly, judges, ministers, the Vice-President and the President are prescribed by law, and are revised every so many years,” VP Faure explained.

He gave as example the salaries of constitutional appointees which were set in 1993 at the start of the Third Republic and were not generally revised for 15 years, meaning that the last revision was in January 2008.

“By then, chief executive officers had started by‐passing the salaries of ministers and judges, so the new salaries set in 2008 were calculated to give constitutional appointees a salary increase that reflected the average salary increases of chief executives over the 15‐year period,” he said.

Meanwhile, VP Faure noted that the economic reforms introduced in November 2008 reduced the earning power of the rupee, yet the net salaries of constitutional appointees have not been revised since then.

He noted that over this period, chief executives and other public sector workers have continued to benefit from salary enhancements from time to time.

“We have once again reached a stage where some chief executives in the public sector are drawing salaries well beyond the level of judges, ministers, and in a few cases even that of the President,” VP Faure explained.

“We do not think that adopting the same strategy as we did in 2007 to revise salaries of constitutional appointees will solve the problem. If we do so, in only a few more years, we will be back at square one,” he stressed.

He said the government has therefore felt it necessary to adopt a more objective, a fairer and a more transparent approach to determining the basic salary of every post in the public service.

“In designing the new salary table for the public service, we have considered that the salary of every post in the public service must be higher by a certain percentage than the post just below it.

We have also considered it fair that this percentage increase from one post to the next must be the same for every post in the public service,” he explained.

“In this way, we have defined 300 post levels in the public service. We have arranged these 300 levels into 20 vertical bands, with each band having 15 horizontal steps across. The salary progression from one step to the other is uniform throughout for all the 300 steps,” he said.

He pointed out that the base salary, that is the salary in step 1 of band 1, must by law not be less than the national minimum wage. The national minimum wage will be R4,050 per month from January 1, 2014, but in the new salary table, the lowest salary for a full‐time employee working 35 hours per week in the public service will be R5,485 per month.

He noted that this figure has been chosen for band 1 step 1 of the salary table because it is exactly 20% higher than the lowest salary (R4,571 per month) in the wage grid currently in use in the Seychelles public service.
 
Since the government has announced a 20% wage increase for employees in SG1 to SG4 in the present wage grid, the minimum salary in the new salary table will be exactly what the new salary on the current wage grid would have been in January 2014.

The VP explained that the next important consideration is the ratio of the salary in step 1 in the highest band – band 20 – to the salary in step 1 base pay in lowest band – band 1 – in the salary table.

The ratio of the highest paid to the lowest used to be about 7:1 in Seychelles in the early 1990s, but government was obliged to review this ratio upwards in order to attract and retain talent in the public service, bearing in mind the much more attractive pay in the private sector. He pointed out that today, in Seychelles this ratio is about 10:1 in the government sector, but we are still not finding it competitive enough.

The VP said there is a growing demand across the world for top salaries to be capped at a socially justifiable ratio in comparison with the lowest paid. In 2012, the French government proposed that a fair ratio would be 20:1. In November this year, voters in a referendum in Switzerland voted against capping top pay at 12:1.

“Here in Seychelles, the Salary Bill before us would in theory allow a 20:1 ratio, but in practice government wishes to use a 15:1 ratio for the time being, taking into account all economic factors, and the need to raise productivity to match any further increase in pay at this time.

He said once the base pay of R5,485 per month is decided and the capping ratio of 15:1 is selected, the remaining 299 steps of the table are automatically generated.

He went on to explain that bands 1 to 10 of the public service salary table will be used to determine the starting salaries of posts in the general public service, that is from the junior positions up to director general level.

Salary bands 11 to 16 will contain salaries of chief executives in the public sector and salaries of certain constitutional appointees, such as members of the National Assembly, the Auditor‐General, the Master of the Supreme Court, the Ombudsman, the chairman of the Electoral Commission, the chairpersons and members of the Constitutional Appointments Authority and the Public Service Appeal Board.

The salary band 17 will be used to determine the salaries of judges, justices of Appeal, the Designated Minister, ministers, the Attorney‐General, the Leader of Government Business in the National Assembly, the Leader of the Opposition in the National Assembly, and the Deputy Speaker.

Salary band 18 will be used to determine the salaries of the Chief Justice, the President of the Court of Appeal, and the Speaker of the National Assembly.

Salary band 19 will be used to determine the salary of the Vice‐President of the Republic.

Salary band 20 will be used to determine the salary of the President of the Republic.

The salary table will be revised from time to time, at least once every five years.

The salary table will become effective on April 1, 2014 except for Constitutional Appointees which will be carried out in two phases – the first on July 1 and the second on December 1, 2014.

However, as explained in the Budget Address, the salaries of public sector workers will be increased as of January 1, 2014 by 10%, or 15% or 20% depending on their positions in the wage grid as at December 31, 2013.

On April 1, 2014, they will be formally placed on the new salary table and will be assigned a step on the salary table nearest to the salary they will be earning on March 31, 2014. In most cases this will involve a small increase, the VP said.


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