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Reserve Bank of Malawi executives dispute salary cut

Reserve Bank of Malawi

Wilson Banda

The Reserve Bank of Malawi is yet to make a decision on the recent Industrial Relations Court (IRC) decision to stop it from implementing a pay cut to deputy governor Henry Mathanga’s monthly salary from K22 million to K10 million.

RBM spokesperson Onelie Nkuna said the bank was yet to decide on what to do.

“A review and hence way forward on the ruling of the Industrial Relations Court is yet to be done.” said Nkuna in a written response.

Several longest-serving top executives at the Reserve Bank of Malawi (RBM) are also protesting the decision by the central bank’s board of directors to revise their salaries downwards, documents we have seen show.

Some of the top executives include Clemence Chinkono, Donnex Chitsonga, Fraser Mdwazika, Joseph Milner, Mbane Ngwira, Patrick Mhango and Ralph Tseka, all of whom are said to have been affected by the new salary structure.

In December last year, RBM wrote some of its top managers informing them of the decision to effect salary cuts by about 50 percent.

The decision saw RBM Governor Wilson Banda also reducing his own salary from K27 million to about K12.5 million.

But, in a letter dated December 22 2020 addressed to the RBM governor, some top management executives collectively argue that the board has no legal authority, whether as an employer or in any other capacity, “to unilaterally revise our salaries downwards without our individual consent”.

“Salary is a contractual matter that forms the bedrock of our respective contracts of employment with the bank, hence cannot be changed without personally consulting the people affected,” reads part of the letter which has been signed by some of the longest-serving executives of the central bank.

The letter further calls on the board to rescind its decision, which the top officials say contravenes fair labour practices.

“The proposed salary revisions are, therefore, illegal and unprocedural. We accordingly withhold our consent. Given your expressed intention to implement the revisions on 1st January 2021, it is necessary that we receive your timely assurance that the same will not take effect as intended,” the letter reads.

On December 30 2020, the board shelved its intended decision to announce that it was going ahead with the decision to effect salary cuts.

A letter from the RBM Governor’s office informs the concerned officials of the decision.

“I wish to advise that the Board of Directors, at a Special Board Meeting held on 29th December 2020, deliberated on the contents of your letter. The board, however, resolved to uphold its decision made on 26th November 2020,” reads the letter, which RBM Governor Wilson Banda signed.

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