The High Court has today ruled that Finance Ministry does not have the legal authority to overturn the salaries and allowances of civil servants against the will of the Civil Service Commission (CSC).
In April last year the Civil Court ruled in favor of the Civil Service Commission in a case against the Ministry of Finance regarding civil servants’ salary cuts. The CSC successfully contended that the Finance Ministry did not have the legal authority to make amendments to civil servant salaries.
Delivering the verdict at the time, Civil Court Judge Aisha Shujoon said that the Finance Ministry was not authorised to order offices to prepare salary sheets according to its revised (lower) salaries, and also ruled that the Ministry could not issue an order narrowing the powers of the commission to decide the civil servants’ salaries under articles 6, 18(a) and 43 of the Civil Service Act.
The salaries of the Civil Servants were reduced in October 2009 for three months, after an agreement between the Finance Ministry and CSC, part of austerity measures favoured by the International Monetary Fund (IMF).
After the three months duration was over, the Finance Ministry extended the duration for another three months without the consent of the CSC.
In January 2010, the CSC ordered permanent secretaries to submit the sheets with salaries at the levels prior to the government’s reductions in October, while the Finance Ministry threatened legal action against any civil servants who filled in salary sheets according to the restored amount.
Civil servants held protests in Male’ over the salary reduction, with the support of the opposition, after the government refused to restore the salaries to pre-cut levels citing the poor economic condition of the country.
The situation became especially heated that Feburary after the Finance Ministry filed a case against the CSC with police, alleging the commission was attempting to “to sow discord between the government and public”, and “bring the government to a halt.”
The Finance Ministry further claimed that certain members of the CSC were using the issue as a cover to attain “a hidden political agenda.”
“The CSC is making it difficult for the government to implement the necessary economic policies [and are therefore] indirectly trying to damage the economy,” the Ministry said in a statement, at the time.
“[The CSC’s actions] will result in an increased budget deficit, make it difficult to maintain the value of the rufiyaa against the dollar and will damage the Maldivian economy, affecting each and every citizen of this country.”
After the matter descended into the court system, the government appear to accept that it was unlikely to shake the CSC’s hold on the salary issue, as demanded by the IMF, and instead embarked on an ambitious program of corporatisation whereby entire departments were transformed into 100 percent government-owned corporate entities, outside the jurisdiction of the CSC.
More recently, cabinet launched a program to encourage civil servants to leave the government and enter the private sector or further their education, a move welcomed by the CSC.
Under the scheme, civil servants and government employees were eligible for one of four retirement incentive packages: no assistance, a one time payment of Rf 150,000 (US$11,700), a payment of Rf 150,000 and priority in the small and medium enterprises loan scheme (for those 18-50 years of age), or a lump sum of Rf 200,000 (US$15,600) and priority in government training and scholarship programmes (for those 18-40 years of age).
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“[The CSC’s actions] will result in an increased budget deficit, make it difficult to maintain the value of the rufiyaa against the dollar and will damage the Maldivian economy, affecting each and every citizen of this country.”
How right that proved to be! Guess the courts aren't that bothered with stabilising the economy.
It's really ridiculous that the Civil Service is allowed to set their own mini budget effectively! This makes no sense whatsoever.
What should happen is this:
(1) The government of the day set an overall budget allocation to the Civil Service.
(2) It's then upto the Civil Service to divide that budget up and setup pay for its members.
In no circumstance should the Civil Service be allowed to set their own budget. How can that even be Constitutionally legal? Surely, setting the budget and opeating that are the responsibility of the Executive branch?
President Nasheed increased the salaries with any pressure only to reduce it after few months which led to the problem.
It appears that the so called independent institution are not bothered at all with crumbling economy. If anything they try to inflate and increase the state's expenses!
Yes, dear @alibeyya, you're absolutely right. The government keeps jumping from the frying pan into the fire.
No sooner had the street protests died down; it's faced with another headache in the form of a wage bill worth MRf 400 million from the Civil Service.
Being a country not known for it's saving habits, where's that MRf 400 million going to go, if it gets paid? Yep, that MRf 400 million will find itself straight in the arms of shop keepers and traders who are gleefully wringing their hands at another opportunity to hike prices.
Not to mention the chase of dollar that will follow too. Must be fun being a government economist...
Of course, there's a way around these difficulties for the government. Business taxation will ensure a fair amount of that money flows back into the government. It then gets to keep circulating that in the form of wages etc.