This statement was delivered on Wednesday, March 6, 2013 in response to the address delivered by Prime Minister Dr. Kenny Anthony
Ladies and gentlemen, brothers and sisters good evening.
Following meetings of various Staff Associations and Unions in the Public Sector, I am fulfilling a mandate for the Trade Union Federation to speak to the Public about the current state of negotiations for Public Sector Workers. This conversation does not represent a response to any address that you may have heard.
Fellow St. Lucians, when unions seek to negotiate salary increases for workers, they take into consideration three factors:
1. The impact of the economy (especially inflation) on the workers.
2. The need to improve the standard of living of the workers
3. The employer’s ability to pay.
When the Trade Union Federation entered into negotiations with Government, it was aware that at that time inflation rate for the period being negotiated was estimated to be at 9%. It means therefore, that people had to find nine percent More in order to survive. In addition the Government had imposed a 15% VAT on goods and services. By so doing, the government imposed tax on some areas that did not normally attract taxes.
Our research revealed that 15%VAT would normally generate a further increase in inflation rate of between 7% and 12%. Therefore, given the then 9% inflation rate, the expected 7% further increases due to VAT and the need to help the workers become a little better off, the Unions proposed a 16% salary increase.
It was the view of TUF however, that given the current world economic crisis government would not be in a position to accept the proposal of 16%. We decided though that it was necessary to make the case for a 16% but with the view to revising downwards significantly.
The basis for that position is that in the past successive governments have asked public servants to make sacrifice in hard economic times for example to accept 0%, 0%, 1%, but when things got better we were not allowed to benefit from the improved fortunes. We felt this time that if we could make our case for fair increase but accept something much lower, when the economy improved, we will have a leg to stand on.
To our shock and dismay the government appeared to have been oblivious to the impact of the rising cost of living on public servants when it offered us a wage freeze for the triennium, 2010-2013. As if we only shop, pay mortgage or rent, send our children to school, pay health bills, etc. at Christmas time, the Government offered one thousand dollars to each public servant for Christmas.
As we continued the discussions with the Government Negotiating Team, it was clear to us that Government was adamant that it was not prepared to seriously consider the plight of the worker. It was further clear to us that the GNT had no real mandate to negotiate. As a result, the TUF sought an audience with the Prime Minister to clarify the mandate and responsibility of the GNT, and to create a framework for the amicable conclusion to the negotiations.
The details as to how the negotiations proceeded have widely been reported in the media. However, the time came when the TUF felt that it was necessary in the best interest of all to bring the negotiations to a close and so we placed some conditions before the Government that if it accepts, we would accept a salary increase of six percent since we found the governments offer of 4% unacceptable. Most of these conditions we were certain would not cost the government any money and those of a financial nature would not be significant and would not be implementable in the immediate.
Ladies and gentlemen, before 2003, a person joining the public service would enjoy the benefits of a pension and gratuity on retiring from the service at age 55 or 60.
In 2003 the government made it mandatory that, persons entering the service pay NIC and as a result have lost the benefit of a government pension. This has created an anomaly where given the fact that NIC pension comes into effect at age 63, a civil servant retiring at age 55 must wait eight years without a salary or pension. We said to the government that unless the intention is to send such persons home to live in poverty, it should work with us to put a mechanism in place to correct that anomaly. This represents one of the conditions that does not cost a cent to the state.
Another condition we sought to have the government consider is making some of the lands owned by the crown available to public servants at a reasonable price. We are of the view that this would not cost government any money but would have the benefit of helping more people own a piece of St. Lucia and would allow the public servant to have more disposable income.
Coupled with the conditions related to the purchase of land we sought to get the government to agree to explore the possibility of securing money which would be placed in the Credit Union Cooperatives for public servants to access mortgages at reduced interest rates.
Ladies and gentlemen, let us not only consider the fact that this would make mortgage loan more accessible to public servants and would allow them some more disposal income, but consider the positive impact for job creation this initiative would have for our country. Can you imagine, five hundred public servants accessing that facility to build homes creating work for an average of ten persons per house. We are talking about work for over 5000 people including carpenters, masons, labourers, tilers, plumbers, electricians, painters, etc. This would create serious economic activity at no cost to Government since the moneys would be paid back. As a result government would be gaining revenue.
Another condition we placed before the government was the settling of the reclassification project. In 1992 the Government created various levels of positions in the Public Service. Since then various cabinet conclusions and other factors have created some disparities.
We ask that government agree to work with us to correct the problems associated with the reclassification at no cost to the government since the World Bank has made money available for the project.
Fellow St. Lucians, there are groups of workers in the public service that we call travelling officers. These are persons who use their vehicles to carry out their work. These officers have to travel to remote parts of the island through difficult roads to carry out their function. This takes a toll on their vehicles. We ask that the government consider giving a one off concession on vehicles to these officers. While we are aware that senior public officers receive between 90% – 100% duty concession on their vehicles, we have not made any fixed percentage demand on the government for these officers who are at the lower grades.
With regards to the condition related to the Agency Fee, we are of the opinion that there are persons who enjoy all the benefits negotiated by the public sector unions but refuse to make a contribution. We are of the view that such persons rely on other persons putting in the resources for them to enjoy the benefits. This behaviour can be corrected with the introduction of an Agency Fee. The idea is not new as it is practiced in many places such as Grenada, Bahamas, Canada and several states in the US. This of course, is at no cost to government.
Brothers and sisters, there has been much talk about productivity in the Public Service. And of course the TUF agrees that it is a matter that has to be addressed. However, the government must take some of the responsibility for the situation as evidenced by its removal of increments for public servants in 2005.
The Increment System was not a free for all but served as an incentive for persons who had served exceptionally well in carrying out their duties. The TUF put this as a condition for government to consider since it will not be too costly for government as only well deserving officers will receive it.
Ladies and gentlemen I am sure that you will agree that these conditions create no burden for the government, but if implemented will be of great benefit to public servants and the country.
I now turn my attention to the question of affordability.
Trade Union Federation accepts that it is governments’ right to allocate its financial resources to any project or activity it chooses. We have not failed to recognize that government continuously shifts its resources to provide for the things that it considers priorities at a particular time. However whenever it comes to paying Public Servants an increase, the government asks the Unions… Where will it get the money?
It is not the business of the Federation to answer that question for the government since we are not in a position to determine government priorities. Nonetheless we venture to offer the following advice.
While accepting that any figure below 10% increase would seriously disadvantage our members. We are of the view that such an increase would not put the government finances into difficulty. Examining the figures revealed that the government can pay 6% salary increase to public servants.
A 6% salary increase will amount to a little over one million dollar a month to the government. In the context of a budget of over a billion dollars this is not significant as it represents just over 1% of the current budget.
We are convinced that this is an amount the government can afford in the following context:
1. If the government completes the public sector modernization program it will realize greater efficiencies which will contribute to economic growth and will curtail wasteful expenditure. It is to be noted that a mere 1% of efficiency will provide the government with about 1million dollars.
2. The government if it seeks to control the creation of positions at the highest levels of the public service it can save almost a million dollars, we say so in the context in 2011 there were 24 positions between grades 19-21 that were filled but by the end of 2012 it moved to 32 filled positions. At an average salary of about 125,000 per position between grades 19-21 the government has added to the wage bill over 1 million dollars. A curtailment of that practice will leave available monies to government that will contribute to providing the lower level public sector workers with a better salary.
3. While we appreciate that government must seek to assist every sector of the economy. However we cannot accept a situation where some.
Enterprises continue to withhold millions of dollars entrusted to them for state and that the government simply waivers the payment of almost all of these monies and continues to do so.
A little insistence by government for those sectors to pay at least most of those monies that rightfully belongs to the government then the government will have more than enough to afford more than 6% salary increase for public servants. Especially as we are aware that one sector currently owes the state over 34 million dollars.
Fellow St. Lucians we are convinced that the government can reach a 6% salary increase for public servants without carrying out its threat to cut programmes which benefit the poor and the youth. The federation supports every initiative aimed at alleviating the situation of the vulnerable.
The Trade Union Federation places on record its desire for a peaceful resolution to the negotiations. We believe in the capacity of the government and the unions to arrive at a workable solution. The situation will not be resolved by the government arrogantly telling workers that it is 4% or nothing or by the workers insisting that it is their demands or nothing.
We must seek to find a common ground. In the interest of country both sides must be willing to appreciate the other’s concerns. The Federation accepts that there is a world economic crisis affecting the country. We want the government to accept that inflation at a rate of 10.3% has impacted workers making them much poorer than they were three years ago. If we accept the situation both sides can move just a little to reach that common ground. We can work to make it a win/win solution.
We pray and trust that the Good Lord will guide our hearts and minds in these negotiations.