Thursday,14 December, 2017
Current issue | Issue 1345, (18 - 24 May 2017)
Thursday,14 December, 2017
Issue 1345, (18 - 24 May 2017)

Ahram Weekly

Bonuses on the way

Parliament has guaranteed special bonuses for state employees not subject to the civil service law, reports Mona El-Fiqi

Bonuses on the way
Bonuses on the way

Millions of state employees received the good news this week that parliament had approved a law giving a 10 per cent special bonus to those not subject to the civil service law.

Last week, parliament approved the bonus law by a two-thirds majority, with 420 members voting for the law, five voting against, and 19 abstaining. According to Article 1 of the new law, all state employees not subject to the civil service law put into effect in October 2016 will receive a 10 per cent bonus on their basic salaries.

Employees who are subject to the civil service law have already received the bonus retroactively since June 2016, but millions of state workers who are not subject to the law have not had any increases in their salaries since that date.

Following the approval of the law, Mohamed Maeet, deputy finance minister, announced that the bonus was set to be disbursed to around three million state employees ahead of the holy month of Ramadan and that it would cost the government LE3.2 billion.

The bonus, which will be between a minimum of LE65 and a maximum of LE120, is set to be applied retroactively from June 2016.

“The bonus comes in good time, and I hope the government will carry out its promise and disburse the bonus before Ramadan because family expenses usually increase during this month,” said Hossam Ali, a teacher, who welcomed the news.

The bonus law was introduced in order to achieve fairer treatment among state employees. There are around 6.5 million employees in different government institutions, with only 3.5 million falling under the civil service law of 2016.

This guarantees state employees an annual seven per cent bonus on their basic salaries. Remaining employees who are excluded from the law because they have their own special rules, including government-employed doctors, teachers and judges, will be subject to the new bonus law.

The law was passed after long debate in parliament, with Article 5 facing particular controversy. This stipulates that the 10 per cent bonus should be added to basic salaries, but says that any other allowances must be calculated on salaries without taking the 10 per cent extra into account.

Some MPs were against the article, saying that it deprived employees of extra financial rights, but the government argued that its removal would cost the government budget an additional LE18.5 billion.  

Samir Radwan, a former minister of finance, told Al-Ahram Weekly that Egypt had seen problems in state salary scales for years. “There has been a chaotic situation for years, and the government handles it by giving out annual bonuses even though this does not address the root of the problem,” he said.

Egypt had one of the largest numbers of state employees in the world, at one state employee for every 12 people, and this meant large wage bills for a country already having a 12 per cent government budget deficit, Radwan added.

“State employees should be paid fair salaries. Their salaries should not be calculated by their productivity either, since one-third of them could do all the work they are asked to do. The problem has to be seen from a societal perspective,” Radwan said.

He added that an annual bonus of seven to 10 per cent was not enough to match the inflation rate, which had surged to 32 per cent this year. To help employees to meet the increases in prices, annual bonuses should be calculated in line with inflation, he said.

Many state employees have been suffering particularly since November 2016 when the pound was devalued against the dollar and the real purchasing power of their salaries went down by half.

Radwan recommended that a unified law regulating the performance and the payment of all employees in the state bodies should be issued. As state bodies could manage with one-third of their current employees, the government should start to reduce the number of state employees gradually over the next five years, he said.

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