Slow business pushes Mengo Hospital to cut staff pay by 20%

Kampala, Uganda |  THE INDEPENDENT | Mengo Hospital has informed staff they will experience up to 20 percent cut on their salaries starting May 2020 because the hospital is experiencing slow business.

In a letter to staff, Dr Rose Mutumba, the hospital medical director said that the board has taken a decision to implement a pay cut for the months of May, June, and July 2020. She said “this was an extremely tough decision,” and that the hospital management understands the impact it will have on  employees and their families.

Those earning one million Uganda shillings and above will experience a 20 percent reduction on salary, those whose earnings fall between 550,000-999,000 Uganda shillings will experience a 15 percent cut while those earning 450,000-550,000 Shillings will forego 10 percent of their pay. Others are the 421,000-450,000 Shillings category who are taking a 9 percent cut and a 5 percent cut for those earning between 400,000-420,000 Shillings. Those below 400,000 will not experience any cut.

Mengo is among the essential services that the government said could remain open through the seven-week lockdown. But also, lockdown meant that some of the patients that were not critical either chose to stay at home or visit the nearby clinic.

One of Mengo’s cash-maker is the eye clinic. It has been operating below capacity since the lockdown started in March with most of the staff not working. The hospital put a notice that it would only work on the critical cases. The eye glasses section has been closed since then.

In the letter dated May 22, 2020, Mutumba said the hospital considered other alternatives and the choice made is the best option at this time and will have the least impact on employees overall. The hospital had already implemented key measures like the deferring payments of Pay as You Earn and National Social Security Fund for staff but this didn’t improve the finances for the institution.

She said the hospital board and management will continue to monitor Mengo Hospital finances and re-evaluate this decision and each month depends on the monthly business performance.

“I believe the outcome from this measure will be a better position for Mengo for a solid financial future,” she wrote.

Tens of organisations have either cut staff or reduced salaries to survive the crisis. The United Nations Capital Development Fund has assessed that up 100,000 workers will lose their jobs as COVID-19 crisis hits hard businesses. It also indicated that millions especially in the informal sector will see their earnings fall below the poverty line or dry up completely.

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