Doubts hover over Egypt's civil service law

Randa Ali , Waad Ahmed , Wednesday 19 Aug 2015

The new law would ostensibly lead to bureaucratic reform, better services for citizens, and fair conditions for employees

Inside Al-Mugamma, Egypt’s largest administrative government building (Photo: Nadeem Abdel-Gawad)

Last week, under the blazing heat that has been sweeping the country, thousands of workers – mostly tax authority employees — protested the new civil services law.

The workers gathered in what was one of the largest demonstrations Cairo has witnessed since the 2013 criminalisation of unauthorised protests, a law that resulted in the imprisonment of thousands of ‘violators.’

The civil services law was passed in March with the aim of reforming Egypt’s administrative apparatus in order to encourage investments by curbing notorious bureaucratic inefficiencies, streamlining hiring practices and wage-structures in government institutions.They echoed similar concerns: that the law wants to lay them off, slash their salaries or enforce nepotism.

In a speech on Monday, President Abdel-Fattah El-Sisi said the law was to restructure the country’s administrative apparatus – which roughly employs seven million employees — and doesn’t seek to cut wages and lay off employees.

El-Sisi described the size of the administrative apparatus as "unnatural" before explaining that the aim [of reform] is not to reduce the size.

Cut the cost

Many administrative apparatus employees fear that out of the government’s desire to cut the financial burden imposed by the apparatus on the budget in the form of wages, many will lose their jobs or be subjected to harsh deductions.

In an attempt to uplift a battered economy, Egypt has set a five-year macroeconomic plan that aims to cut the state budget deficit to around 8.5 per cent by 2018/2019, by reforming state subsidies and introducing new taxes.

According to Reem Abdel-Halim, economic researcher at the Egyptian Institute for Personal Rights (EIPR), the law aims to limit the expansion of wages in the state budget.

“Wages eat up a quarter of the state budget -- this is unacceptable -- hence they [the government] wanted to prepare a law to impose some restrictions on employing and on wage increases that are not well calculated.

“Previously, bonuses would be 200 per cent and higher than basic salaries, now bonuses have a ceiling,” said Abdel-Halim.

Wages and incentives comprised LE218.1 billion (25.2 per cent) of the budget in FY 2015/2016, compared to LE96.3 billion (23.9 per cent) in FY2010/11, according to the state budget.

Ghada Moussa, one of the participants in the drafting of the law, explains that the establishing of a new unified methodology in the wage system is the main target of the law. She added that for over 40 years the apparatus has been severely “deformed” with huge gaps in salaries, even among employees of the same ranking or job.

Any entity concerned with a specific department can now specify its own bonus or performance incentives, but it has to be approved by the cabinet based on a request from the specialised minister according to article 40 in the law which the ministry of planning explains will be its tool in narrowing disparities.

Labour activist Fatema Ramadan disagrees with the new wage structure.

“There is a huge problem, the government is giving employees [in the new law] a 5 per cent annual bonus while the inflation rate is over 10 per cent, meaning the employees’ purchasing ability will decrease by each year,” Ramadan told Ahram Online.

The law cuts annual bonuses to 5 per cent from 10 per cent before. The older law also allowed an employee who received exceptional bonuses for six consecutive months to have it as a fixed salary increase. However, the new law cancels this, strictly linking all bonuses and incentives to productivity and competence.

According to a ministry of planning spokesperson, the cut from 10 per cent to 5 per cent comes simultaneously with making basic salaries 80 per cent of the income, which means that 5 per cent is higher than the 10 per cent when it comes to the final sum.

But employees have reiterated concerns that in later years this would represent an increase lower than Egypt's current two-digit inflation rate.

Employees’ livelihood

Tarek El-Kashef, a tax authority officer and one of the protesting workers against the new law -- issued in the absence of a parliament -- said increasing levels of managerial authoritarianism could make workers vulnerable.

“If my employer doesn’t like me he can sack me whenever he wants to, the law would bring more corruption and nepotism, it will all depend on whether you are liked by the administration or not,” said El-Kashef, who has been working in the authority for 15 years.

However, Moussa believes that while all of these are legitimate fears and demands, they are based on ungrounded facts.

“Who said that the new law allows the boss to give a weak evaluation to an employee just because he doesn’t like him? [Under the new law] the boss himself will be evaluated by his employees,” said Moussa, adding that the new law is creating “a 360 degree evaluation.”

It would be an evaluation from the boss, the employer, his colleagues and even the service seeker if it's applicable in an employee’s case, according to Moussa.

It is all detailed and guaranteed in the bylaws, which should be revealed within days, Moussa said.

According to article 27 of the law, if an employee receives a weak assessment in two consecutive annual reports, the human resources committee sees if the employee is more suitable in another position on the same level. If the employee continues to perform poorly during the third year, the human resources would recommend a 50 per cent wage cut for six months.

If the employee continues to perform poorly, the committee would propose firing them while maintaining their right for a pension. In all cases, the specialised authority will have to approve the decisions.

Persisting imbalances

While the law achieves transparency in the wage structure, it remains limited to its narrow scope, creating an imbalance and limiting its effect, said Abdel-Halim.

The law is applied to the seven million employees in the administrative apparatus. However, the public sector, including state owned companies, and independent economic entities, are excluded from the law.

Moreover, several authorities, which fall under the law, have their own financial cadres such as healthcare and education employees and hence they are excluded from the wages chapter, Ashraf Hussein, head of social and economic justice unit at EIPR, explained to Ahram Online.

The issue is not whether the size of the administrative apparatus needs to be reduced. There is an imbalance in the allocation of employees and expertise. It is unclear whether the law will solve this or not, according to Hussein.

Around 46 per cent of government employees are located in Egypt’s capital, demonstrating a high degree of centralisation which is not solved by the law, a report entitled ‘Reforming the State’s Administrative Apparatus’ revealed, which was released by EIPR.

While there is an army of abundant employees in some sectors in Egypt’s administrative apparatus, others such as healthcare and education suffer from scarcity, said Hussein.

“Decentralisation is achieved in the law in issues of supervision but in employment the law becomes centralised,” said Abdel-Halim, adding that a healthcare unit in a remote town could benefit from decentralisation to hire needed doctors.

“I imagine that instead of the excluded seeking inclusion in the law, the included will seek to be excluded,” said Abdel-Halim.


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