The federal government is in a catch-22 situation as a court deadline to give a 20% raise to employees working in ministries’ attached departments lapses. The compliance of court orders will put a financial burden of Rs50 billion on the national exchequer, while defiance of the order will result in contempt of court.
On Wednesday, a single-member bench of the Islamabad High Court (IHC) warned the finance ministry, for the last time, to issue a notification to increase salaries of the attached departments of ministries by September 30.
The government is under pressure to treat all its employees equally, at a time when the International Monetary Fund (IMF) has asked Islamabad to contain its ballooning public wage bill as part of belt-tightening efforts.
The employees of the attached departments were left out when former prime minister Raja Pervaiz Ashraf increased salaries of the employees of federal ministries and divisions just ten days before the completion of his government’s constitutional term.
Employees of the attached departments had challenged the government’s decision in IHC, which on June 18, asked the finance ministry to mete out equal treatment to all.
However, after the government failed to honour the court’s decision, a single-member bench of IHC has now given a final warning to the ministry, threatening it with contempt charges, if it failed to issue a notification.
Dr Ishrat Hussain, former head of pays and pension committee, had warned at that time about a snowball effect, expressing apprehension that employees of corporations and attached departments of ministries would demand similar treatment.
The government had submitted a petition for constitution of a divisional bench on June 19 to review the court’s decision, but so far the bench has not been formed, according to finance ministry spokesman, Rana Assad Amin. He also said that the government also sought a stay order against the decision.
Sources said that the finance ministry was reluctant to implement the court’s judgment which will increase its wage bill additionally by Rs40 billion to Rs50 billion.
“The government is facing difficulties in reducing expenditures to fresh limits set by the IMF,” a finance ministry official said.
For the current fiscal year, Rs274.6 billion have already been allocated for running affairs of the civil government and half of this amount is mean for paying salaries. The spending is likely to exceed budgetary limits as the government announced 10 per cent increase in salaries after the announcement of the budget.
The IMF has advised Islamabad to improve the quality of civil service, reduce corruption and contain wage bills.
Finance ministry officials believe that the court did not pay heed to the government’s arguments.
The finance ministry has taken the stance that the job nature of the employees working in ministries and divisions is different from those working in attached departments.
“The nature of responsibility and accountability levels in ministries and divisions was far better than those in the attached departments,” a ministry official said.
However, analysts and experts disagree with the government’s logic of giving separate pay packages, as all such discriminatory decisions in the past were taken under political compulsions. Even the pay and pension committee had recommended the previous government to bring an end to discriminatory practices and implement uniformed pay scales.
The finance ministry had further argued that some government departments were already entitled to special allowances and that the government was not ready to increase salaries of employees already availing special packages.
The single-member bench of the IHC will review implementation of its decision on Monday as the government seeks constitution of a divisional bench before the hearing.
Published in The Express Tribune, September 29th, 2013.