Court blocks RBM deputy governor salary cut

The Industrial Relations Court (IRC) has stopped the Reserve Bank of Malawi (RBM) from effecting a pay cut on deputy governor Henry Mathanga’s monthly salary from K22 million to around K10 million.

The central bank governor Wilson Banda reduced RBM management executives’ salary by around 50 percent, reportedly cutting his own to K12.5 million—from K27 million which his predecessor Dalitso Kabambe was pocketing.

However, Mathanga protested by seeking an order restraining the bank from slashing his salary, arguing that the move was in breach of the Employment Act and other laws.

His lawyer Powell Nkhutabasa argued: “On or about December 14 2020, the applicant met the board where, among other things, he was informed that his salary would be reduced…

“The applicant wrote the respondent [RBM] in remonstrance of the decision for being unfair having been made unilaterally by the bank and as the decision offended the Reserve Bank Act and the Employment Act, among other laws.”

In its ruling, dated March 2 2021, the IRC has ordered that Mathanga’s salary should not be reduced.

It reads, in part: “Upon reading the application as well as affidavits and skeleton arguments both in support and opposition to the application, it is ordered that the first respondent [Attorney General] be and is hereby prohibited  from reducing the salary of the applicant.”

Mathanga also applied to the court to order the bank to allocate him a new official vehicle as the one he he was using was provided before his promition last April to deputy governor.

The lawyer argued: “The respondent (RBM) has refused to allocate and acquire a vehicle for the applicant in line with the bank’s own official motor vehicle policy for management.

“Before the applicant was promoted to the position of executive director and the subsequent appointment as deputy governor, the respondent provided the applicant with an official vehicle, motor vehicle registration BY 7691, (TX Prado). The applicant continued to use the TX Prado despite his promotion.”

On this, the court ruled: “The respondent be and is hereby prohibited  from refusing and/or neglecting to provide the applicant with a new vehicle that the second respondent acquired for the applicant’s official use in his capacity as deputy governor.”

The IRC has also ordered that the bank should allow Mathanga to purchase the TX Prado he was using as part of his benefits.

“Under the bank’s official motor vehicle policy, the applicant has the first right to acquire and purchase this vehicle when the bank decides to dispose of the vehicle,” the lawyer argued in his application.

The court ruled: “The respondent be and is hereby prohibited from refusing and/or neglecting to offer the applicant the sale of motor vehicle registration BY 7691 TX Prado.”

Nkhutabasa, in an interview, said he was pleased with the ruling and “was now looking forward to the order being enforced”.

Asked how the State will proceed with the matter, Attorney General Chikosa Silungwe, in an interview on Friday, said he did not have enough details about the ruling, asking us to contact Ministry of Justice and Constitutional Affairs spokesperson Pirirani Masanjala, who asked for time to consult.

Mathanga, who is the longest serving official having joined the bank in 1984, was sent on forced leave in August 2020. Prior to the leave, RBM had informed him that government was terminating his contract, court documents show.