5% pay hike rooted in economic reality - Govt
Union says decision high-handed By Oscar P. Clarke
Stabroek News
December 6, 2003

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Government says that the decision to award a five per cent increase to public servants is based on a thorough evaluation of the current economic realities coupled with their demands for immediate relief.

While it is the PPP/C government's policy to bring relief to workers, the economic reality is that only a five per cent payout is possible, Head of the Presidential Secretariat, Dr Roger Luncheon, said at a media briefing yesterday.

However, the Guyana Public Service Union (GPSU) at a subsequent press briefing called government's decision high-handed, unlawful, unprincipled and anti-democratic. GPSU President Patrick Yarde insisted that government by its actions had breached agreements between the two parties including International Labour Organis-ation (ILO) Convention 151 which had been ratified by parliament.

At a meeting on Wednesday with the union at the Ministry of Labour, government signalled its intention to award a five per cent increase to some categories of public sector employees after conciliation negotiations showed no signs of progress. At that meeting it also indicated its willingness to continue discussions with respect to wages for 2004 and 2005 among other outstanding issues.

Questioned on the union's willingness to meet the government on these fronts, Yarde said that the GPSU's proposals with regard to these years were known and had been fully ventilated during the negotiations. He posited that since there had been a deadlock with regard to these the need to progress to arbitration immediately was the only logical conclusion.

The GPSU's proposal requested a minimum wage of $37,757 for 2003 rising to $45,308 for 2004 and $56,635 for 2005. Government had offered a ten per cent increase over the three years - 3.5% for 2003, 3.0% for 2004 and 3.5% for 2005. This was rejected by the GPSU.

At yesterday's briefing, both Luncheon and Public Service Ministry Permanent Secretary, Dr Nanda Gopaul, cited several indicators to show that expected growth did not materialise although inflation remained in single digits and basically under control. They highlighted that the five per cent offer to all categories of public sector workers was an increase on the earlier offer of 3.5% made at the bargaining table and a fulfilment of a promise to protect real wages.

They said that the decision to make the payment was a response to requests from employees, particularly at the Home and Finance ministries "to get something for Christmas." According to Luncheon any further delays in the process could have created difficulties and even embarrassment to the administration.

However the GPSU's statement to the press said that Dr Gopaul's announcement of government's intention not to proceed to arbitration in keeping with Article Q7 General Policy of the Public Service Rules and the Memorandum of Agreement of June 23, 1999 between government and the union, and to make the payout was "an act of deceit, bordering on dishonesty."

Tracing the progress of negotiations from their June 6 commencement, the union said that between October 15 and November 28, the government team procrastinated and frustrated the process despite requests for the issue to be settled by arbitration.

According to the union, in 2002 government had used the excuse of a late request for arbitration by the union to award a payout, but with no such excuse possible this time around, opted to breach both the public service rules and the June 23, 1999 agreement.

However, government maintained that the three main considerations influencing its decision to award a payout included the time factor and the need to conclude fiscal matters before the end of the year. It also said that the current debt servicing constraints along with world commodity prices, especially in relation to the country's exports, influenced the quantum of the payout.

Gopaul also said that the GPSU was hasty in seeking arbitration while not seeming to be keen on allowing sufficient time to allow the parties to work towards narrowing their differences at conciliation.

Yarde countered this, claiming that even Chief Labour Officer (CLO) Mohamed Akeel had acknowledged that the process at conciliation had reached a deadlock and indicated this when government attempted at the last minute to introduce a new offer.

GPSU Consultant Leslie Melville said the union had told Gopaul to let the new position be adjudicated by the arbitrator. Instead, after requesting additional time to respond to the union's request for arbitration, government informed the meeting of December 3, that it had issued the circular authorising the increase.

But Gopaul, examining the process followed by government, said it had initiated this on November 25, 2002 in a letter to the GPSU requesting that talks on wages for 2003 to 2005 begin on January 6 2003. He said no response was forthcoming from the union until June 6. From then up to September 24, five meetings were held at the bilateral level and the parties agreed that they had exhausted all means to proceed at that level and decided to opt for conciliation.

The conciliation process began on October 2 under the mediation of Akeel and after a couple of meetings, the union, following a comment by President Bharrat Jagdeo at a union seminar, demanded that the process be advanced to arbitration.

According to Gopaul, his ministry wondered why the rush to this stage when parties could continue to meet to narrow their differences. Thus the government insisted at the fourth meeting at conciliation on November 24 that it intended to continue talks at this level.

However, the union claimed that at that meeting the government requested that the terms of reference for the arbitration be determined and the names of those to comprise the panel be considered.

Gopaul said that on November 28, government increased its offer from 3.5% to 5% for 2003 with the hope that the union would have accepted it while continuing discussions on other outstanding issues. But, he added, the union continued to resist any overtures insisting that the discussions move to arbitration.

Melville acknowledged the government's new offer, but said it was informed that any new position should be directed to the arbitration panel.

According to Luncheon, the administration then decided to examine what was available while looking at budgeted allocations made earlier this year and after taking into consideration that workers were clamouring for an increase for Christmas, made a decision to pay the 5%.

Gopaul said that PSM negotiators had indicated to the union that they understood their concern, but at the same time they had an obligation to employees who were pressing them to make a payout before Christmas.

Luncheon added that the process of arbitration was indeed relevant and extremely important to the process of industrial relations and the handling of workers' issues as was demonstrated in various private sector resolutions and that of GUYSUCO. Gopaul insisted that any increase higher than 5% would trigger hyperinflation and the erosion of real wages. Pointing to the 5% awarded to sugar workers following arbitration of their dispute, Gopaul said that government had patterned its increase on that arbitrated decision since any panel would have had to consider similar circumstances in treating with public sector wages.

The 5% increase is below the 6.1% rate of inflation and goes against a promise by President Jagdeo that increases per annum would not be below the rate of inflation. Luncheon acknowledged this, but stressed that it needed to be looked at in a cumulative manner.

Yarde said that the government's actions left a lot to be desired. He insisted that the union's response would be guided by a soon-to-be-held General Council session. He reiterated the union's intention of continuing to engage government.