Salary increment at employer’s discretion

Claris Ogangah

It is encouraging that as an employer, you have complied with the provisions of the Employment Act and given your employees contracts.

The Employment Act provides in Section 9 (1b) that: "A contract of service, which provides for the performance of any specific work that could not reasonably be expected to be completed within a period of working days amounting in the aggregate to the equivalent of three months, shall be in writing."

Your employees’ contracts are for one year and therefore fall within the provisions of Section 9.

You have stated that the said contracts are renewable and your question is on the salary to be paid if the contracts are renewed.

It is important to note that once a contract expires, then the said employment is deemed to have ended. If the contract is renewed, the employee is deemed to have commenced employment afresh, with new terms and conditions of employment.

Salary scales

The terms and conditions may be similar with the terms of the previous contract. However, the same will take effect on the day the new contract is signed.

The issue of salary is not really something that the Employment Act can dictate. What the Act provides is that employees must be paid a salary commensurate with the work being done.

Various organisations have different salary scales for their employees. It a only public or Government institutions that have clear-cut job groups with specified salaries.

Therefore, the decision to increase the employees’ salaries lies totally with the management of the organisation and is subject to negotiation between the employer and the employee.

The law does not make it mandatory to have you increase the salary of the employees at every renewal of contract, but as the employer you can use your discretion based on the financial position of the company, the performance of the employees and the agreement with them.

There are also employees who are members of trade unions and whose salaries are negotiated under a collective bargain agreement.

It would be important to negotiate with these unions to avoid conflict and disagreements with the employees.

It would, however, be advisable in the new contracts, to indicate clearly what salaries the employees should expect, even if there is no increment, so that they know clearly what they are entitled to.