Wage decree rejected

“Including transportation fees in basic salary violates Social Security Law"

The Shura Council has ruled against the wage increase draft submitted to it by the Cabinet on December 21. The Council said that the proposed draft was turned down considering several judicial gaps, mainly its violation of the Social Security Law.

The Shura Council said that “restructuring payments granted to employees as ‘transportation allowances’” and counting them in the minimum wage and inflation rate category “contradicts with article 68 of the Social Security law on which the draft decree was based.”

Article 68 of the Social Security Law (1963) determines the salary used in calculating the fees to the National Social Security Fund (NSSF).

The Shura also said that including the transportation fees (LL236, 000) into the basic salary requires amendments to the relevant decrees, which can only be made by the legislative authority. It said that the transportation allowances policy was adopted in 1995 through decrees issued by the Cabinet unlawfully, and was initially under the prerogatives of the legislative, rather than the executive, authority.

The Shura Council’s verdicts are nonbinding, but last October the Cabinet retracted a wage raise draft after it was rejected by the Shura.

The Cabinet adopted three different wage drafts during the past three months, but failed to endorse any of them as an official decree.