Finance minister details cabinet’s decision not to pay bonuses |21 December 2021
The press conference: (l to r) SS Payet, Minister Hassan, PS Baker and Mr Tirant (Photo: Louis Toussaint)
Following the decision taken by the cabinet in its meeting on Friday for state-owned enterprises (SOEs) not to pay bonuses or performance incentives to staff in 2021, Minister Naadir Hassan yesterday afternoon gave more details on the decision.
The Minister for Finance, Economic Planning and Trade said the cabinet’s decision was not an easy and necessarily popular one but it is one that the government had to take considering the current economic situation that our country and the world are facing right now brought about by the impact of the Covid-19 pandemic.
He said the principle had already been adopted for all government workers and it was felt that it would be most unfair to treat staff of SOEs differently, as government is also the shareholder of these enterprises.
He went on to note that the cabinet’s decision not to allow payment of bonuses does not mean that SOEs cannot give a small token of appreciation to their employees. But he said they should ensure that this does not become a financial burden on their company.
“The government is encouraging boards and management to discuss what they can afford to give their employees as a sign of appreciation for their hard work during the year. Going forward, the government and the Public Enterprise Monitoring Commission (PEMC) will as of next year work on a restructuring plan which will be implemented by all SOEs as the present mechanism shows a lot of disparity especially with regard to salaries where each is using a different system without consulting the government,” Minister Hassan remarked.
He said it is important for the different SOEs together with their management and board members to take their responsibilities and to better manage the expectations of their employees to avoid discontentment and disappointment on the part of their employees.
“Our country’s economic situation is still very fragile and I have always indicated that even though we are on the road to recovery, this is still long and difficult while at the same time the situation worldwide does not look good as the world faces a fourth round of the virus with a newly discovered variant,” Minister Hassan explained.
He went on to highlight that many countries being severely affected are our traditional tourism markets which would definitely have a negative impact on our country’s economic recovery.
“The pandemic is plunging the world’s economy in an uncertainty making it difficult for us to know what will happen in the future. So as a responsible government we have to take decisions which are not popular but we do not want our country to plunge back through the economic situation of 2020 and 2021,” Minister Hassan explained.
“We have to be prudent in all our actions and SOEs should also help and be part of this economic recovery but not become a financial burden on taxpayers and government,” said Minister Hassan.
He remarked there are SOEs that have received financial support from government during the past year to pay the salaries of their employees and there are those that are still receiving funding from government to pay their loans while many of them their financial situations are not stable.
Furthermore Minister Hassan stressed that in the IMF support programme it clearly stipulates that Seychelles has to strictly reduce fiscal risks that SOEs could pose to the national budget.
“While we do appreciate that all employees have worked hard during the year, at the same time employees of SOEs have to appreciate that our country’s economy is still fragile and when the government is calling on a group of public servants to make sacrifices, we believe that in the spirit of fairness, everybody should show solidarity. All that the government is asking is for everyone to show solidarity in this difficult moment as the uncertainty of the pandemic still reigns and does not look to dispel soon. So we all have to be prudent. The SOEs have to ensure that they have enough money to sustain their operations in the face of any forthcoming economic turmoil,” Minister Hassan pointed out.
Meanwhile following President Wavel Ramkalawan’s announcement that he and Vice-President Ahmed Afif will not be taking their end of year gratuity, in solidarity with government employees, Minister Hassan has confirmed that the whole cabinet of ministers will not be taking their gratuity as well. He said this will amount to some R2.2 million as savings for the government.
For his part the chief executive of PEMC, Georges Tirant, noted that the commission assesses the SOEs total revenue, net revenue, expenses, economic performances for the last three to four years, their budget forecasts in order to observe their financial pattern.
“The year 2019, 2020 was not good but we are observing that 2021 also has not been as good and will not bring the expected profits for many of the SOEs,” said Mr Tirant who went on to detail that many have international loans that the government have guaranteed and if the worst comes to the worst the government will have to step in.
“It is therefore our role as the monitoring body of the financial situations and performances of SOEs as well as government exposure in the face of these situations and to better advice it so it can take informed decisions,” said Mr Tirant.
Meanwhile the principal secretary for employment Jules Baker has re-emphasised the fact that paying a bonus is not a right nor have a merit under the law and employees should not expect to be legally paid a bonus at the end of each year.
He noted that in times of economic crisis it is important for the concerned authorities to take the necessary measures to manage the economic situation.
He noted that SOEs have a responsibility and duty to inform their employees of their financial situation and to manage their expectations by passing on the right information from the beginning.
“Information with regard to the suspension of the 13th month pay should also have been passed on and carefully explained to employees but unfortunately we have observed that many SOEs have not explained the situation to their employees to avoid situations when their expectations are not met they are disappointed and took to protesting and refusing to work which is unlawful and bring with it serious consequences,” PS Baker pointed out.
Meanwhile PS Baker has reminded all employees that there are procedures in the way to carry out a protest and he is appealing to all management to discuss and explain these issues to their employees so that they do not resort to protests to have their grievances heard.
Also present during the press conference was secretary of state for finance Patrick Payet.
Marie-Anne Lepathy