The Court’s judgment which found that the Reserve Bank unlawfully reduced an executive’s salary has strengthened the argument behind compensation payments to former and current senior officials affected by the revisions, analysts say.
Rights activist Fryson Chodzi says the court’s reasoning in the case involving former
RBM executive Clemence Chinkono shows that employees cannot be deprived of contractual salaries.
The Forum for National Development (FND) national coordinator’s comments follow public scrutiny of the reported K1.5 billion compensation paid to RBM Deputy Governor Henry Mathanga and other executive officials after a long-running dispute over their salary.
Chinkono’s judgment, delivered last November but has resurfaced now, is particularly relevant because it dealt with the legality of RBM’s decision to reduce executive salaries in December 2020, Chodzi says.
The RBM director of administrative services monthly salary was reduced from K12,046,436 to K9,885,937 after the Central Bank revised its executive remuneration structure.
The Bank argued that the reduction was necessary to correct anomalies in the salary structure.
The court, however, held that although RBM had authority to determine remuneration, it could not unilaterally reduce a salary that had already become a contractual entitlement.
RBM has reportedly paid Chinkono the amounts due, together with interest, while damages for unfair labour practices were to be assessed separately.
For Chodzi, although the judgment concerned Chinkono and predates the latest controversy, its reasoning provides an important legal context for understanding compensation claims arising from the same salary reductions.
“This judgment is important because the court has already dealt with the legality of the salary reduction,” Chodzi said.
He said it would therefore be wrong to portray officials who successfully pursued compensation as simply receiving public money without legal justification.
“We cannot fault the recipients of the money or RBM for complying with a court order,” he said.
Mathanga’s dispute similarly arose from RBM’s attempts to reduce executive salaries. He challenged the decision and subsequently pursued legal action against the Bank.
Chodzi said the focus should consequently shift from the recipients of compensation to the decisions that created the liabilities.
“If an institution makes a decision that the courts later find to be unlawful, the consequences cannot simply be placed on the person whose rights were violated,” he said.
He argued that the Chinkono judgment demonstrates that the salary reductions were not merely an internal administrative adjustment but had legal consequences because they interfered with contractual rights.
Chodzi said the broader issue was therefore accountability for decisions that expose a public institution to substantial financial liabilities.
“Some of us warned at the time that these salary cuts were unlawful. The court has now confirmed that those concerns were valid,” he said.
