During this period, the Union Coordination Committee announced an open strike that lasted for over a month, in demand of the pay scale referral to Parliament. The Cabinet examined the pay scale anew and approved it on March 22, 2013 with figures that differed from those endorsed earlier in September, both in terms of the new reformative clauses inserted or the pay increases and their delivery in installments for years. It was not until June 14, 2013 that the new draft law was passed to Parliament after the Ministry of Finance added the corrective improvements. Now that the new draft law is finally in Parliament, it remains to be seen when the Joint Parliamentary Committees will revise it and when the legislature will convene to approve it. And once in session, will Parliament approve it as is or will it be amended?

Until then, it might be useful to draw a comparison between the amended draft law and the original one approved back in September 2012. How were the hikes distributed over the administrative, military and diplomatic sectors?

Reformative Clauses

Apart from the new pay rates, the government added in the newly amended draft law a number of clauses that served to induce reform in the Lebanese labor system. Of those clauses, we mention the following:

• Raising the weekly working hours from 32 to 35. The work schedule shall be from 8:00 am until 4:00 pm from Monday to Thursday, and from 8:00 am until 11:00am on Friday, with Saturday and Sunday being devoted for rest.
• Decreasing the maximum limit of overtime hours to 36 hours per month. The same applies to benefits, which are not to exceed 40% of the total pay of an employee throughout the year.
• Amending the judiciary leave from August 1 until August 31. The original leave was from August 1 until September 30.
• Increasing the minimum years required in service by 5 years before an employee is entitled to retirement. The limit thus becomes 30 years rather than 25 for teachers, 23 rather than 18 for soldiers and military members and 25 rather than 20 for army officers.
• Freezing all forms of employment in all public administrations and institutions.

The majority of employees fail to adhere to the current working hours, and increasing them might be of no use, even if approved in Parliament. In other terms, what counts most is the stern implementation, not the mere approval, of reformative actions.

Pay Scale Funding Sources

The draft law laid forth by the government proposed a series of taxes and fees in order to cover the cost of the new pay hike. The sources of funding are highlighted in the following Table 1. However, the collection of many revenues might not be feasible based on the proposed numbers. For instance, the settlement of the construction and coastal property infringements and the reassessment of fixed assets, which are expected to yield around LBP 955 billion remains far-fetched. Also, it was forecasted that the exit fees will amount to LBP 25 billion with around 5 million transit passengers annually. However, the average number of passengers leaving the country has been 2.8 million in the past 3 years, i.e. down by 2.2 million from the predicted estimates. Hence, the projected revenues will probably stand somewhere around LBP 15 billion rather than LBP 25 billion.

Furthermore, the increases in the construction permits’ fees that were expected to bring in around LBP 600 billion are almost certainly exaggerated and will probably discourage any construction projects or drive people to obtain the permits by illegal means and trespass their designated areas.

Therefore, it is highly probable that the set sources of funding will not yield the projected revenues and borrowing will most likely be the answer to the pay scale funding dilemma.

Source: Draft law amending the initial pay scale

Pay Scale Cost

The increase in the cost of the pay scale funding is estimated at roughly LBP 4074.7 billion distributed annually as follows:

• 2013: LBP 307.5 billion
• 2014: LBP 317.3 billion
• 2015: LBP 327 billion
• 2016: LBP 339.3 billion
• 2017: LBP 1369.4 billion (the amounts increase due to the salary increases and the retroactive pay)
• 2018: LBP 1414.2 billion (the amounts increase due to the salary increases and the retroactive pay)

I. Administrative Sector

Grade 1

By the start of 2016, the salary of a Grade 1 civil servant at the first step level would become LBP 4.130 million compared to LBP 2.5 million in 1999, i.e. up by 65.2%. The pay of those at the last step level would increase from LBP 4.6 million to LBP 8.610 million, i.e. up by 87.2%.

The pay scale in its final form has decreased the Grade 1 salaries at the first step level by 2.8% and those at the last step level by 4%, as compared to the rates set in the 1st draft law. The following Table 2 illustrates the evolution of the pay of Grade 1 civil servants from 1999 until 2016.

Source: Draft law amending the initial pay scale

Grade 2

By the start of 2016, the salary of a Grade 2 civil servant at the first step level would become LBP 2.400 million compared to LBP 1.030 million in 1999, i.e. up by 133%. The pay of those at the last step level would increase from LBP 2.405 million to LBP 5.900 million, i.e. up by 145.3%.

The pay scale in its final form has decreased the Grade 2 salaries at the first step level by 4% and those at the last step level by 4.4%, as compared to the rates set in the 1st draft law. The following Table 3 illustrates the evolution of the pay of Grade 2 civil servants from 1999 until 2016.

Source: Draft law amending the initial pay scale

Grade 3

By the start of 2016, the salary of a Grade 3 civil servant at the first step level would become LBP 1.750 million compared to LBP 860 000 in 1999, i.e. up by 103.5%. The pay of those at the last step level would increase from LBP 1.830 million to LBP 4.235 million, i.e. up by 131.5%.

The pay scale in its final form has decreased the Grade 3 salaries at the first step level by 2.8% and those at the last step level by 4.3%, as compared to the rates set in the 1st draft law. The following Table 4 illustrates the evolution of the pay of Grade 3 civil servants from 1999 until 2016.

Source: Draft law amending the initial pay scale

Grade 4

By the start of 2016, the salary of a Grade 4 civil servant of the 1st rank at the first step level would become LBP 1.175 million compared to LBP 550 000 in 1999, i.e. up by 113.6%. The pay of those at the last step level would increase from LBP 1.228 million to LBP 2.442 million, i.e. up by 98.8%.

The pay scale in its final form has decreased the Grade 4 salaries at the first step level by 2% and those at the last step level by 2.1%, as compared to the rates set in the 1st draft law. The following Table 5 illustrates the evolution of the pay of Grade 4 civil servants from 1999 until 2016.

Source: Draft law amending the initial pay scale

Grade 5

By the start of 2016, the salary of a Grade 5 civil servant at the first step level would become LBP 840 000 compared to LBP 375 000 in 1999, i.e. up by 124%. The pay of those at the last step level would increase from LBP 900 000 to LBP 1.701 million, i.e. up by 89%.

The pay scale in its final form has decreased the Grade 5 salaries at the first step level by 1.1% and those at the last step level by 1.4%, as compared to the rates set in the 1st draft law. The following Table 6 illustrates the evolution of the pay of Grade 5 civil servants from 1999 until 2016.

Salaries of Grade 5 civil servants between 1999 and 2016- Amounts in thousands of LBP

Table 6

Step

Basic salary on 31/12/ 1998

Basic salary on 1/1/ 1999

Basic salary on 1/5/ 2008

Step value

Basic salary on 1/2/ 2012

Step value

Basic salary on 1/1/ 2013

Step value

Basic salary on 1/1/ 2014

Step value

Basic salary on 1/1/ 2015

Step value

Basic salary on 1/1/ 2016

Step value

Basic salary as per the 1st draft law

Difference between previous and current proposed pay

1

250

375

575

21

750

26

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