Minister defends salary increases at Armscor
DEFENCE and Military Veterans Minister Nosiviwe Mapisa-Nqakula has come to the defence of state-owned entity Armaments Corporation of South Africa (Armscor) for rewarding employees with salary increases.
In 2017-18, Armscor executives and the senior management received 6.2% salary increases and middle management down to general workers 7.75%.
The increment cost the entity R1 billion.
The group executives also received bonuses of 10% of their annual packages and the rest of the other employees 8% of the annual packages, which was equivalent to their monthly salary.
In the prior financial year, employees across the board received 7.5% salary increases that cost Armscor R943 million.
In a written response to a parliamentary question from the DA’s Sarel Marais, Mapisa-Nqakula said the increases were due to normal annual salary increments, compliance with legislation and escalation of medical costs, among other things.
Marais had wanted to know the basis of the salary increases.
Mapisa-Nqakula said the salary increases were aimed to redress the unjustifiable wage gaps between employees doing the same or similar work.
“This parity project was initiated as a result of the new labour law amendment on equal pay for same or similar work of equal value.
In doing so Armscor followed the prescribed gazetted regulations,” she said.
Mapisa-Nqakula said the increase was also attributable to the internal promotions across the SOE in line with the corporate promotion practice.
“During the last six financial years the Discovery medical (aid) premiums increased at an average of 9.15 per annum… The annual increases of 7.5% contributed to the total amount.”
Asked about the justification of the astronomical increase against a lower budget at Armscor, Mapisa-Nqakula said the entity needed to comply with legislation.
The increases, she said, were to “ensure the organisation remains competitive and is able to attract and retain the highly sought-after skills that are necessary in ensuring that it delivers work of superior quality”.
“Armscor has also adopted a strict policy in filling vacancies that are critical to the operations of the organisation by optimising the utilisation of these resources hence deriving huge operational savings.
“These savings amounted R22.4 million in total,” she said.
The minister insisted that the salary increases had been budgeted for.
“Armscor did not utilise reserves to fund salary increases of Armscor employees since April 1, 2018, including salary increases and bonuses for senior management service employees and any other benefits such as free hunting trips and the Cape Town Jazz festival.”
Armscor obtained a clean audit report from Auditor-General Kimi Makwetu in the 2017-18 financial year. to