Independent institutions “making excuses” on pay cuts

Independent institutions are “making excuses” to avoid lowering salaries and allowances of its employees despite agreeing that economic circumstances warranted reducing expenditure, Ahmed Assad, state minister of finance, said today.

Addressing press, Assad said it would not be too hard for institutions to find legal reasons for avoiding the pay cuts.

At a meeting at the president’s office yesterday, the heads of independent institutions informed the president of legal issues that might arise in reducing salaries.

“If you want to find an excuse, there won’t be anywhere that you can’t find it. They might say, we have made contracts with people,” said Assad. “But, in truth, contracts are made with everyone, regardless of what kind of job he is in.

“A contract does not necessarily have to be written. A verbal contract is legally accepted as a contract as well. So they can continue giving excuses to any degree. That is not really the issue.”

Speaking to Minivan News yesterday, Fuad Thaufeeq, president of the Elections Commission, said although the Civil Service Act empowered the Civil Service Commission (CSC) to reduce civil servants’ salaries, said Fuad, there was no such law for independent institutions.

“In fact, the Employment Act says it can’t be done,” he said. “That is our main concern.”

Muaviz Rasheed, the vice-president of the Anti-Corruption Commission, said the commission drew up contracts with its employees for five years and did not anticipate having to reduce salaries so soon.

Discriminatory pay

Assad said it was worth noting that civil servants and their counterparts in various commissions who do the same work do not get the same pay.

“My question is while a civil servant hired by the Civil Service Commission, a janitor, gets Rf4,000 (US$311) with Rf3,100 (US$241) salary and Rf1,000 (US$77) service allowance, I don’t know on what principle a worker at some commission should get Rf11,750 (US$914),” he said.

He added he was not referring to the pay of technical staff such as commission members.

“What is the difference between an administrative employee who works at customs and an administrative employee at parliament or at the president’s office or some place called public works?” he asked.

Regardless of the job title or the work place, he continued, all the employees did the same type of work and were paid out of the government’s budget.

The Employment Act states that there should not be any difference in pay for people who do the same work, he said.

Finance Minister Ali Hashim said the ministry will have meetings with all independent institutions individually next week.

“First of all, some independent institutions questioned whether there were special economic circumstances or not,” he said, adding he was happy to learn that they have accepted it now.

Hashim said the ministry preferred that the institutions propose the cuts themselves after reviewing their budgets.


Assad said the finance ministry was very glad that former President Maumoon Abdul Gayoom was giving up 20 per cent from his monthly state benefits.

A bill on privileges and protection for former presidents that stipulates Rf75,000 (US$6,000) in monthly allowance and Rf50,000 (US$4,000) in housing allowance was passed by parliament this week.

Gayoom announced yesterday that he would take a cut of 20 per cent from both allowances.

“This means that the leader of the opposition party has accepted the circumstances have arisen,” said Assad.

Further, he continued, the Civil Service Commission had also accepted that the country’s economic situation was exceptional.

“So now we have accepted this from all sides,” he said. “So why are you [independent institutions] hesitating?”

Since there was no longer any doubt, the question that remained was determining the percentage of reductions to be made, he said.

The government introduced a raft of austerity measures in August, such as pay cuts of up to 20 per cent for political appointees and cutting back on foreign travel, to alleviate the budget deficit.

Following deliberations at the cabinet, the government also requested the Civil Service Commission (CSC) reduce salaries of civil servants. Pay cuts of up to 20 per cent for civil servants came into effect this month.

The CSC agreed to the pay cuts on the condition that independent institutions enforced a similar reduction for its employees.

Fuad said CSC President Dr Mohamed Latheef mentioned the condition at the meeting.

“We want to make pay cuts as well to cooperate with the government, but we want to do it under the law,” said Fuad. “We cannot take these measures without a law for it.”

Hashim said the ministry has revised its forecast of Rf7 billion (US$544 million) of income this year to Rf5.8 billion (US$451 million).

“As you know, import of goods to the country is falling and the government income from it will be lower,” he said. “And taxes from tourism, or lease rent, are also lower.”

The salary reduction for civil servants will be in place until the government’s revenue exceeds Rf7 billion.