… finance ministry approves revision for schedule I companies

Thukten Zangpo

The finance ministry announced yesterday that the updated pay revision for chief executive officers (CEOs) and regular employees of state-owned enterprises (SOEs) will range from 46 to 72 percent of the minimum basic pay, effective from October 1.

Despite the finance ministry’s notification on October 20 regarding SOEs’ pay revision, a meeting between finance ministry officials and SOE CEOs occurred a week later. The meeting urged SOEs to submit their revised pay and allowances for approval by their respective company boards before November 10.

Note: CEOs’ contract allowance of max. 60% of min. basic pay and other company and position-specific allowance not included

According to the revision, for the CEOs of the National Pension and Provident Fund and Bhutan Development Bank Limited’s basic pay at Nu 85, 500, higher compared to other SOEs, they will get a monthly lump sum increment of Nu 51, 300.

While for other SOEs’ CEOs with basic pay of Nu 75,000, their monthly lump sum increment comes to Nu 45,000. 

For the regular employees’ grades ranging from 1 to 19 or minimum monthly basic pay between Nu 55, 580 and Nu 10, 180, their lump sum monthly increment comes between Nu 25, 325 and Nu 7,300. 

According to the finance ministry, personal pay would be discontinued with the implementation of pay structure reform. This means that the employees will not be eligible for the increment beyond the maximum pay scale. 

According to the revision, the leave encashment of one month’s basic pay remains status quo, which means that the employees are eligible for the leave encashment as per the companies’ internal service rule which usually is one month’s basic pay.

However, the leave travel concession (LTC) of Nu 15,000 maximum or minimum basic pay annually whichever is lower has been discontinued and prorated monthly. From grade 11 to CEOs, employees will get Nu 1,250 as prorated LTC monthly while for grade 12 to grade 19, between Nu 1, 205 and Nu 850 monthly.

The designated vehicle is only eligible for the CEOs of the companies. The Performance Based Variable Incentive, PBVI for the SOEs will be entitled at maximum of 25 percent on the annual basic pay, at par with the Druk Holding and Investments Companies which will be decided based on the performance of the companies by the board.

The revision has retained the travelling and daily allowance as per the respective companies’  internal service rules. However, the gratuity is eligible after a minimum of 10 years of service, except for those on contract and death cases. 

Allowances 

Regular employees are also eligible for 20 percent of the monthly pay as house rent allowance (HRA). However, the HRA is not applicable to CEOs. The CEOs will get contract allowances not exceeding 60 percent of the minimum basic pay while for other contract employees, it would be decided by the respective boards and management to attract talent on contract basis. 

An overtime allowance would be provided to the employees where they are required by the supervisor to work beyond the normal working hours, weekends, and government holidays. The ministry added that the maximum number of hours shall be 3 hours during working days and 5 hours during weekends and Government holidays.

The ministry has discontinued the communication allowance which was found differing across various SOEs, with reasoning that it has caused disparities and perceived unfairness among employees.

At the same time, the cash handling allowance has been discontinued because the adoption of online systems has significantly reduced cash transactions, as well the uniform allowance has been discontinued. 

While other allowances like conveyance allowance and position-specific allowance were retained depending upon specific needs.