Wednesday, May 8, 2013 BY DR MAKODINGO WASHINGTON
It
is true that universal principles of employment bar employers from
reducing the wages of employees to their disadvantage in the course of
their employment.
In fact, our own constitution confers the same on several offices, for example: Article 151 (2) the remuneration, benefits and privileges of the President and Deputy President shall not be varied to their disadvantage while in office.
Article 250 (8) says the remuneration and benefits payable to, or in respect of, a commissioner or the holder of an independent office shall not be varied to the disadvantage of that commissioner or holder of the office.
Even though the constitution does not mention MPs directly, the principle can and is rightfully applied to them and all other state officers.
Simply put, once you have begun offering an employee a certain amount of money, you cannot vary it to their disadvantage for as long as their contract remains valid.
This was the reasoning behind the state offering to pay MPs' taxes when KRA invoked its powers to tax their pay as is stipulated in the constitution (Article 210(3)).
The argument was that taxing their salaries would greatly reduce what they had been taking home for years and would therefore amount to varying their wages to their disadvantage. This principle ONLY applies to an employee already earning a certain wage.
Now let’s have a look at the 11th Parliament. It came into existence when members were sworn in on Thursday, March 28th, 2013. All MPs entered a contract of employment with the Parliamentary Service Commission on this day, and NOT a day earlier.
Before this day, members of the 11th Parliament were not employees of the PSC and were therefore not earning any salary from the PSC. In essence, there was NO SALARY to reduce or increase.
Whatever salary they were going to earn after taking their oaths of office would be their FIRST salaries as employees of the 11th Parliament.
It would therefore be a misnomer to allege that the SRC had contravened principles of employment by varying their salaries to their disadvantage. You cannot vary a salary that doesn’t exist.
Can members of the 10th Parliament use this principle to claim that their salaries were varied to their disadvantage? No. as MPs in the 10th Parliament, they had a fixed-term contract that came to an end on January 15th.
After that day, they were “raiyaa” like the rest of us. They joined the millions of us Kenyans who are jobless. Most of them applied for the same posts, a couple applied for other posts and some decided to retire altogether.
Like the tens of their competitors, they were looking for employment from the people of Kenya through the PSC. Their employer had the right to vary the terms of employment to whatever it wanted.
In fact, good practice the world over dictates that new employees should begin at a lower pay grade than the person they are replacing. In exercising this right, their potential employer dutifully published what the new pay structure for state officers, including MPs, would be in a gazette notice on February 15th.
This is a responsibility we took so seriously as Kenyans that in our collective wisdom, on August 4, 2010, we decided that henceforth, all salaries for state officers shall be reviewed and determined by the Salaries and Remuneration Commission established by Article 230 of the constitution.
The SRC did this via a gazette notice published on February 15, 2013, and which took effect on March 1. As with all job interviews, when you realize that the salary attached to the job you are interviewing for is lower than your expectations, the potential MPs would have just dropped out of the race.
Some have claimed that the pay package was announced late in the day after they had spent millions of shillings campaigning. Well, first of all, nobody told them to use millions of shillings campaigning anyway – it was their choice.
Most importantly though is the fact that their remuneration packages were released before the ultimate job interview – the March 4 elections. In fact, they came into effect a whole three days before the elections. They still had the option of not contesting.
So, what were the terms of their employment as of this day? A brief look at the legal notice shows the basic pay for MPs is Sh532,500; maximum allowances are Sh213,000; special duty allowance Sh150,000, making the total gross pay, Sh895,500.00. Out of this, the MPs are expected to pay statutory tax, PAYE, of Sh262,582 thereby making their net pay Sh632,918.00.
This is the maximum pay for an MP with the most responsibilities and who actually attends to all sessions, both in the House and parliamentary committees.
Of course MPs have deliberately chosen to distort facts by telling Kenyans they would earn around Sh350,000 after taxes. What they do not tell us is that their allowances essentially raises their salaries to the original pay packages, only that this time they will have to pay taxes on them.
In addition, the SRC went ahead and negotiated very attractive loans on their behalf. While the rest of us Kenyans would pay up to 25 per cent interest on a car loan, an MP only pays three per cent on a maximum of Sh7 million – enough money to buy a top-of-the-range car befitting the office of MP. This was the pay package all MPs were entitled to on assumption of office.
Therefore, when they took their oath of office and signed their contracts with their employer on March 28, the MPs signaled their acceptance of their terms of employment. If anyone of them was disagreeable, they should NOT have signed those oaths. In their oaths, they swore to:
“…bear true faith and allegiance to the People and the Republic of Kenya; that I will obey, respect, uphold, preserve, protect and defend this Constitution of the Republic of Kenya; and that I will faithfully and conscientiously discharge the duties of a member of Parliament.”
The constitution they swore to “obey, respect, uphold, preserve, protect and defend” is the one used to establish their pay packages. Once this remuneration has been set, only the SRC can review it. Fortunately for us, the SRC has pre-determined a course of progression in the remuneration over the next five years.
Again, in our collective wisdom, we decided that MPs should no longer have the power to arbitrarily increase their remuneration through Article 116 (3)—an Act of Parliament that confers a direct pecuniary interest on MPs and which came into force after the election of MPs.
It would be unconstitutional for MPs to vote out SRC members on the basis that they have reduced their pay. This is because in our collective wisdom, we also decided that MPs shall not vote on any question where they have pecuniary interests (like removing members of SRC to allow themselves to increase their salaries!)
Article 122 (3) bars an MP from voting on any question in which the member has a pecuniary interest. Can MPs amend the constitution to disband the SRC? Fortunately for us, no.
We created constitutional commissions to protect the sovereignty of the people (Article 249). To guard our sovereignity, we decided that amendments that would affect the independence of the commissions must be ratified by “We, the people of Kenya” in a referendum.
This is clearly stated in Article 255. (1) which says that a proposed amendment to the constitution shall be enacted in accordance with Article 256 or 257, and approved in accordance with clause (2) by a referendum, if the amendment relates to any of the following matters:
(g) the independence of the Judiciary and the commissions and independent offices to which Chapter 15 applies; We went ahead and declared that: Article 249 (2) the commissions and the holders of independent offices—
(a) are subject only to this constitution and the law; and
(b) are independent and not subject to direction or control by any person or authority. (Including Parliament!) Let those who are unhappy resign!
Dr. Makodingo comments of topical issues
In fact, our own constitution confers the same on several offices, for example: Article 151 (2) the remuneration, benefits and privileges of the President and Deputy President shall not be varied to their disadvantage while in office.
Article 250 (8) says the remuneration and benefits payable to, or in respect of, a commissioner or the holder of an independent office shall not be varied to the disadvantage of that commissioner or holder of the office.
Even though the constitution does not mention MPs directly, the principle can and is rightfully applied to them and all other state officers.
Simply put, once you have begun offering an employee a certain amount of money, you cannot vary it to their disadvantage for as long as their contract remains valid.
This was the reasoning behind the state offering to pay MPs' taxes when KRA invoked its powers to tax their pay as is stipulated in the constitution (Article 210(3)).
The argument was that taxing their salaries would greatly reduce what they had been taking home for years and would therefore amount to varying their wages to their disadvantage. This principle ONLY applies to an employee already earning a certain wage.
Now let’s have a look at the 11th Parliament. It came into existence when members were sworn in on Thursday, March 28th, 2013. All MPs entered a contract of employment with the Parliamentary Service Commission on this day, and NOT a day earlier.
Before this day, members of the 11th Parliament were not employees of the PSC and were therefore not earning any salary from the PSC. In essence, there was NO SALARY to reduce or increase.
Whatever salary they were going to earn after taking their oaths of office would be their FIRST salaries as employees of the 11th Parliament.
It would therefore be a misnomer to allege that the SRC had contravened principles of employment by varying their salaries to their disadvantage. You cannot vary a salary that doesn’t exist.
Can members of the 10th Parliament use this principle to claim that their salaries were varied to their disadvantage? No. as MPs in the 10th Parliament, they had a fixed-term contract that came to an end on January 15th.
After that day, they were “raiyaa” like the rest of us. They joined the millions of us Kenyans who are jobless. Most of them applied for the same posts, a couple applied for other posts and some decided to retire altogether.
Like the tens of their competitors, they were looking for employment from the people of Kenya through the PSC. Their employer had the right to vary the terms of employment to whatever it wanted.
In fact, good practice the world over dictates that new employees should begin at a lower pay grade than the person they are replacing. In exercising this right, their potential employer dutifully published what the new pay structure for state officers, including MPs, would be in a gazette notice on February 15th.
This is a responsibility we took so seriously as Kenyans that in our collective wisdom, on August 4, 2010, we decided that henceforth, all salaries for state officers shall be reviewed and determined by the Salaries and Remuneration Commission established by Article 230 of the constitution.
The SRC did this via a gazette notice published on February 15, 2013, and which took effect on March 1. As with all job interviews, when you realize that the salary attached to the job you are interviewing for is lower than your expectations, the potential MPs would have just dropped out of the race.
Some have claimed that the pay package was announced late in the day after they had spent millions of shillings campaigning. Well, first of all, nobody told them to use millions of shillings campaigning anyway – it was their choice.
Most importantly though is the fact that their remuneration packages were released before the ultimate job interview – the March 4 elections. In fact, they came into effect a whole three days before the elections. They still had the option of not contesting.
So, what were the terms of their employment as of this day? A brief look at the legal notice shows the basic pay for MPs is Sh532,500; maximum allowances are Sh213,000; special duty allowance Sh150,000, making the total gross pay, Sh895,500.00. Out of this, the MPs are expected to pay statutory tax, PAYE, of Sh262,582 thereby making their net pay Sh632,918.00.
This is the maximum pay for an MP with the most responsibilities and who actually attends to all sessions, both in the House and parliamentary committees.
Of course MPs have deliberately chosen to distort facts by telling Kenyans they would earn around Sh350,000 after taxes. What they do not tell us is that their allowances essentially raises their salaries to the original pay packages, only that this time they will have to pay taxes on them.
In addition, the SRC went ahead and negotiated very attractive loans on their behalf. While the rest of us Kenyans would pay up to 25 per cent interest on a car loan, an MP only pays three per cent on a maximum of Sh7 million – enough money to buy a top-of-the-range car befitting the office of MP. This was the pay package all MPs were entitled to on assumption of office.
Therefore, when they took their oath of office and signed their contracts with their employer on March 28, the MPs signaled their acceptance of their terms of employment. If anyone of them was disagreeable, they should NOT have signed those oaths. In their oaths, they swore to:
“…bear true faith and allegiance to the People and the Republic of Kenya; that I will obey, respect, uphold, preserve, protect and defend this Constitution of the Republic of Kenya; and that I will faithfully and conscientiously discharge the duties of a member of Parliament.”
The constitution they swore to “obey, respect, uphold, preserve, protect and defend” is the one used to establish their pay packages. Once this remuneration has been set, only the SRC can review it. Fortunately for us, the SRC has pre-determined a course of progression in the remuneration over the next five years.
Again, in our collective wisdom, we decided that MPs should no longer have the power to arbitrarily increase their remuneration through Article 116 (3)—an Act of Parliament that confers a direct pecuniary interest on MPs and which came into force after the election of MPs.
It would be unconstitutional for MPs to vote out SRC members on the basis that they have reduced their pay. This is because in our collective wisdom, we also decided that MPs shall not vote on any question where they have pecuniary interests (like removing members of SRC to allow themselves to increase their salaries!)
Article 122 (3) bars an MP from voting on any question in which the member has a pecuniary interest. Can MPs amend the constitution to disband the SRC? Fortunately for us, no.
We created constitutional commissions to protect the sovereignty of the people (Article 249). To guard our sovereignity, we decided that amendments that would affect the independence of the commissions must be ratified by “We, the people of Kenya” in a referendum.
This is clearly stated in Article 255. (1) which says that a proposed amendment to the constitution shall be enacted in accordance with Article 256 or 257, and approved in accordance with clause (2) by a referendum, if the amendment relates to any of the following matters:
(g) the independence of the Judiciary and the commissions and independent offices to which Chapter 15 applies; We went ahead and declared that: Article 249 (2) the commissions and the holders of independent offices—
(a) are subject only to this constitution and the law; and
(b) are independent and not subject to direction or control by any person or authority. (Including Parliament!) Let those who are unhappy resign!
Dr. Makodingo comments of topical issues
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