Finance ministry halts change in staff benefits – Business

ISLAMABAD: The government has barred autonomous, semi-autonomous and other public sector corporations and statutory entities from issuing any order relating to the terms and conditions of service of their staff that could have financial implications.

In an order, the finance ministry asked the ministries and divisions to ensure that their attached and subordinate organizations don’t issue any such orders.

A senior government official explained that the fresh order was issued after various organizations started providing special executive and supervisory benefits to their senior officers on the pattern of special allowances at the rate of 150 per cent of salaries (ranging between Rs150,000 and Rs200,000 per month) to selected federal government officers in grades 17 to 22.

These organizations and corporations started availing similar benefits on their own with the approval of their respective boards of directors, saying their boards were empowered to make such decisions. However, the finance ministry had to remind them that their board of directors were not so independent.

Order comes after various organizations offered special executive, supervisory benefits to top officers

The ministry quoted rule 12 of the Rules of Business 1973 which says: “No division shall, without previous consultation with the finance division, authorize the issue of any orders”, which will involve “a change in the terms and conditions or service of government servants on their statutory rights and privileges, which have financial implications”.

In a 2016 judgement, the Supreme Court concluded that the “rules of business 1973 are binding on the government and a failure to follow them would lead to an order lacking any legal validity”. Based on these legal grounds, the finance ministry held that it was “binding upon all the administrative ministries/divisions of semi-autonomous, autonomous bodies/corporations to ensure that any changes in pay, allowances and privileges of executive/supervisory staff of the semi -autonomous, autonomous bodies/corporations working under their administrative control, are processed in accordance with the finance division’s” instructions of June 1999.

Under those instructions, the ministry notified that revisions in salaries and related benefits could be carried out by the respective boards of directors, but such revisions should invariably be tagged with the financial position of the respective organisations. “Clearance from the finance division would be necessary to ensure a rational basis and a degree of uniformity in such revisions,” it said.

To ensure this uniformity, the ministry had also notified a four-member special standing committee led by the finance ministry’s additional secretary, expenditure, and comprising senior joint secretaries of the establishment division and the relevant division and joint secretary regulations of the finance division.

The said committee is empowered to “scrutinize the recommendations of the respective board of directors” of the statutory public sector entities and submit the findings to the competent authority for final orders, but a formal announcement would not be made without approval from the competent authority, ie the federal government.

The finance ministry clarified that Basic Pay Scale 2022 and Ad Hoc Relief Allowance 2022 at the rate of 15pc of basic pay subject to existing conditions would, however, be applicable to the employees of autonomous and semi-autonomous bodies and corporations which had adopted the federal government’s basic pay scales scheme in totality.

Published in Dawn, November 4th, 2022

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