The fourth pay commission report recommends the enactment of a Pay Commission Act.
According to the commission, an act would stipulate clear procedures for adoption of the pay commission report and clarify the roles of the commission, the cabinet and the parliament, which appears to be vague and subject to multiple interpretations today.
“In order to elucidate the provisions of Article 30 of the Constitution and to harmonise the existing entitlement Acts with the provisions of the Constitution, the Commission recommends enactment of a Pay Commission Act,” the report states.
The report states that while carrying out its primary mandate, the commission saw the need to arrive at a clear, consistent and uniform understanding of the legislative intent behind the Constitutional provisions that lend themselves to various shades of interpretation.
Some of the issues the commission raised were definition of public servants; approving authority of the Lhengye Zhungtshog and to the extent the Parliament can make conditions and modifications; composition of other emoluments; relevance of the Entitlement Acts when the Constitution mandates the Pay Commission to recommend the salary revisions, including allowances; and whether the employees of State Owned Enterprises (SOE) and DHI companies are public servants and if they come under the purview of the Pay Commission.
“In order to remove these ambiguities and lay out a clear and consistent procedure for the implementation of the Pay Commission’s recommendation, the Commission recommends the enactment of a Pay Commission Act.”
The commission defines a public servant as a person whose salary, allowances, benefits and other emoluments are drawn from the consolidated fund. However, capitation fees, stipends, subsidies, and transfers drawn from the Consolidated Fund for salaries, allowances, benefits, and other emoluments for a ‘public servant’ are excluded from the purview of the Pay Commission.
Public servants comprise of civil servants, members of parliament, judiciary, holders and members of the constitutional offices, and others. As of December 2018, the report states that there are 38,003 public servants, of which 77.8 percent are regular employees and the remaining on contract.
In 2017, the national council raised the need for legislation and questioned the autonomy of the pay commission during the house’s discussion on the third pay commission report. The third pay commission had recommended salary revision only for local government functionaries and not for other public servants.
According to the third pay commission, increasing public debt and lower realisation of domestic revenue due to delay in commissioning of hydropower projects limited the fiscal space to accommodate major recurrent expenditure.
Given the limited revenue and the proposed revision for local government officials, council members had asked if the commission was driven by political agenda. Since the pay commission was constituted for the second time during the last government’s tenure, questions were also raised on the how many times the commission could be constituted and when. If not specified, Council members were of the view that ruling governments in future may use this prerogative to accommodate their political agenda.
Given that the constitutional provisions on pay commission could have several interpretations on the role and extent of the institutions involved in the pay revision process, the office of the attorney general (OAG) was consulted.
Based on the OAG, the Commission’s interpretation of Section 1, 2 and 3, Article 30 of the Constitution states that the Pay Commission is a time bound autonomous body constituted on the recommendation of the Prime Minister to ensure uniformity and parity in the revisions of salaries, allowances, benefits, and other emoluments of public servants.
“The fact that such a time bound body is granted Constitutional status requires the Lhengye Zhuntshog and Parliament to give due regard and gravity to the recommendation submitted by the Pay Commission.”
According to Section 3, Article 30, the Pay Commission’s recommendations shall be implemented only on the approval of the Lhengye Zhungtshog, which according to the commission implies that the Lhengye Zhungtshog has the full authority to either approve or to reject the recommendation of the Pay Commission.
In case the Lhengye Zhungtshog accepts the Pay Commission’s recommendations with changes, the changes, it states, shall be from within the recommendations and cannot go beyond the recommendations. “It also designates the Lhengye Zhungtshog as the final authority since any recommendation can be implemented only on the approval of the Lhengye Zhungtshog.”
Section 3 also states that Parliament may set conditions and make modifications to the Pay Commissions recommendations.
The commission states that the conditions and modifications proposed by Parliament, should, however, be confined within the limitation of its recommendations and not exceed or go beyond them. “Given the Constitutional status of the Pay Commission, it would be morally tenable on the part of the Parliament that the modifications it makes and conditions it asserts to the recommendations do not significantly deviate from the recommendations of the Pay Commission.”