Payout offer is final - Government
- Decision rooted in economic realities
A GINA Feature by
December 7, 2003
`It is a reflection of economic performances. It was also a reflection of our macro economic situation. The growth in the economy in 2002 was not at the level that could sustain wages and salaries for 2003 beyond the five per cent paid out.’ Dr. Roger Luncheon
GOVERNMENT cannot afford to pay a higher increase in wages and salaries for Public Servants than the five per cent across the board announced earlier this week.
This is according to Head of the Presidential Secretariat Dr. Roger Luncheon and Head of the Public Service Dr. N.K. Gopaul who shared a press conference on the issue Friday.
Government has approved a five per cent across the board increase in salaries and wages retroactive to January 1, 2003, for Public Servants, including contractual employees in State agencies.
The Ministry made a Circular available to all Permanent Secretaries, Heads of Departments and Regional Executive Officers authorising the payout calculated on the figures obtained at December 31, 2002.
Meanwhile, the Ministry of Education and the Guyana Teachers Union (GTU), Permanent Secretary in the Ministry of Education, Ganga Persaud offered a five per cent across the board increase for teachers.
Payments will be made retroactive to January 1, 2003, and over 11, 000 teachers will benefit from this payout.
The five per cent increase for all teachers’ amounts to teachers taking home:
* A junior teacher - $32,120,
* A teacher with five CXC subjects - $32, 208
* A teacher with two ‘A’ level subjects - $43, 300
* A Teacher with three ‘A’ level subjects - $61, 440
* Trained teachers - $61, 440
* Untrained graduate teacher - $84, 908
* Trained graduate teacher - $94,920
Why five per cent?
According to Dr. Luncheon, the administration, based on projections of the economy’s performance for 2003, budget money that does not provide for a higher increase. He noted that had the administration be arbitrarily compelled to payout more than five per cent; this would have resulted in a budget deficit.
Commenting on the factors leading to the administration authorising five per cent, Dr. Luncheon noted: “It is a reflection of economic performances. It was also a reflection of our macro economic situation. The growth in the economy in 2002 was not at the level that could sustain wages and salaries for 2003 beyond the five per cent paid out.”
He noted that the economy continues to suffer the effects of changing commodity prices on the international market, since Guyana’s economy depends largely on exports.
Dr. Gopaul pointed out that two of Guyana’s exports, rice and sugar, particularly suffered from declining prices. Sugar was reduced from US$238 to US$228 per metric tonne, while rice was reduced from US$419 to US$393 on the world market.
The economic performance coupled with the huge, debt service payments although significantly reduced during the past decade, has placed significant constraints on the economy’s performance.
These were the two major factors affecting the economy’s performance. However, the Government functionaries did not rule out the socio-economic discord as a contributory factor.
Dr. Luncheon noted that had the economy’s performance exceeded the projections, a higher wages and salaries increase could have been paid out.
Dr. Gopaul noted that productive workers are usually given higher increases than public servants, and this year the sugar workers received the same five per cent, hence Government’s offer is not unreasonable given the circumstances.
He also noted that in the last four yeas, Government has increased public servants’ wages by 98.22 per cent.
Reasons for payout before end of year
Dr. Gopaul noted that this was largely because of public servants’ calls for their monies before the holidays.
In the absence of the across the board offer of five per cent, the single largest number of teachers would have been affected.
According to Dr. Luncheon, the decision to have the pay out despite the Union and Government not reaching a decision was largely motivated by the fact that the fiscal year is almost complete. He noted that to ensure proper accounting procedures, as well as to avoid the administration incurring any more liabilities unnecessarily, Government agreed to have increases in 2003 paid within the same year.
Another reason for the payout is in keeping with the PPP/C Administration’s policy to protect real wages.
Has Government ignored Arbitration as a mean of resolving industrial disputes?
No. The HPS noted that the administration, by paying out the increases without the Union’s agreement, has not sought to undermine the process of arbitration. He said it is still an acceptable forum for settlements. He noted the fact that the Union itself called for arbitration, illustrates its confidence in the process.
The Union had alleged that the arbitration process is useless, since Government refused to go to arbitration.
Had the administration been forced to pay a higher increased via arbitration, Dr. Gopaul said, Guyana would have witnessed hyperinflation and the real wages would have been destroyed.
The history of the public service wages/salaries negotiations for 2003
The Public Service Ministry invited GPSU on November 25 via a correspondence to begin negotiations for a multi-year agreement for 2003-2005. The correspondence indicated that discussions should start in January 2003. Dr. Gopaul pointed out that the Union did not respond.
In June the Union indicated its readiness to start negotiations and five meetings were held between June 6 and September 24.
parties agreed no useful purpose would be served if they continued at that level and decided to approach the Ministry of Labour for conciliation,” Dr. Gopaul said.
On October 2, the conciliatory process began. The Union then indicated to the PSM through the Labour Ministry that it would like to skip the Conciliation Talks and move to Arbitration because the President had made prejudicial statements regarding wages increase.
Dr. Gopual noted that Government appealed for conciliation, as skipping it would make a mockery of the collective bargaining process.
On November 28, Government, in its quest to move the talks, raised its proposal from 3.5 per cent to a five per cent increase.
Dr. Gopaul noted that even though the administration understood the Union’s calls for higher increase, it was unaffordable, and since the Union did not compromise, thought it best to pay out the five percent this week, as workers need their monies for the season.
Commenting on the five per cent increase for teachers, Dr. Luncheon noted that the Ministry and the GTU met on a number of occasions to discuss increases in teachers’ salaries.
The GTU was keen on discussing salaries for 2002, but the Ministry said that was already dealt with in the 5 – 15 per cent payout teachers received. They instead proceeded to deal with matters relating to Whitley Council allowances.
The Ministry of Education has been bearing the brunt of the blame regarding the delayed resolution of salaries disputes over the last few years.
After disagreements early this year, an Advisory Committee was set up by the Minister of Labour, Dale Bisnauth, to deal with the matter.
Its prime recommendation was for discussions to be continued on salaries and benefits for 2003 and to re-open discussions on the GTU 2002 – 2004 salary proposal.
It is a new international position that multi year agreements are better, providing bargaining committees with a prolonged period to negotiate for wages and salaries rather than on a short term basis.
Dr. Luncheon said that had Government not implemented the across the board five per cent, then the larger batch of teachers would have been affected.
Commenting on the negotiations, the HPS affirmed that the earlier industrial action by teachers had also impacted the negotiations.