Lobby opposes 14pc wage rise

PHOTO | JENNIFER MUIRURI Workers celebrate after President Uhuru Kenyatta ordered that minimum wage be increased by 14 per cent during the Labour Day celebrations in Nairobi on May 1, 2013.  NATION MEDIA GROUP

By GRIFFINS OMWENGA gomwenga@ke.nationmedia.com
Posted  Wednesday, May 1  2013 at  19:05

 

An employers’ lobby has objected the 14 per cent minimum wage increment announced by President Uhuru Kenyatta on Wednesday saying it is unsustainable in the current economic status.

In an interview with the Nation on Wednesday, Federation of Kenya Employees (FKE) spokesperson Felix Otiato said while the body is not opposed to salary rises, the increases must be in line with the performance of the economy.

The lobby, which advocates for employers’ interests in industrial relations, employment laws and related value-add services, said it will now seek the audience of the office of the president and other stakeholders to try and reach a “sustainable” wage rise for employees.

“We will again engage all players and the president to try and explain our case especially owing to the fact that the random salary increments have been a norm over the past four years,” said Mr Otiato.

According to the organisation, employers had proposed a 4.5 per cent annual wage increase in line with the current economic growth while the Central Organisation of Trade Unions (COTU) proposed a whopping 60 per cent rise.

It is an independent body that was set up by the Ministry of Labour that proposed an increment of between 14 per cent and 17 per cent.

Immediate effect

President Kenyatta, opting to side with the independent body, announced during the national Labour Day celebrations at Uhuru Park on Wednesday that employees get a 14 per cent rise on the minimum wage bill from the current Sh8000 to Sh9,120 per month. He directed that the raise be implemented with immediate effect.

In a statement sent to the newsrooms recently, FKE executive director Jacqueline Mugo said that although employers appreciate the need of remunerating their workers well, the current economic climate in Kenya makes it difficult to sustain random annual wage increments.

“There is need to reverse the salary increase trend as a populist tool just used to please those working for the formal sector,” Ms Mugo said.

According to the federation, increasing wages without a corresponding improvement in labour productivity is harmful to business operations.

“We therefore feel that the lasting remedy lies in addressing the high cost of living and lowering the price of basic commodities to reduce the cry for higher wages,” FKE said.

Last year, former President Mwai Kibaki had announced an increment of 13.1 per cent.

Coming on the backdrop of rising inflation, the wage increment is good news to consumers struggling to meet increased cost of living.

In his speech, Mr Kenyatta aid that his government will work to bring down the prices of basic commodities and especially food products to make them more affordable to consumers.