goolsaran, Stabroek

Those 2017 arbitrary increases in wages and salaries of public servants (Part I)

By  stabroek news

A few weeks ago, I made a presentation on behalf of the Transparency Institute Guyana Inc. to the Organisation of American States that was conducting the fifth-round review of Guyana’s compliance with the Inter-American Convention Against Corruption. One aspect of my presentation relates to government hiring. I pointed out that it is inappropriate for the President of the Guyana Public Service Union (GPSU) to also hold the position of Chairman of the Public Service Commission (PSC). The GPSU representative present, however, contended that the Constitution allows for two union representatives to be on the PSC and that the Chairman was elected by the other members.

Article 200 of the Constitution states that the PSC shall consist of six members who shall be appointed as follows:

(a)      three members appointed by the President acting after meaningful consultation with the Leader of the Opposition;

(b)     two members appointed by the President  upon nomination by the National Assembly after it has consulted such bodies as appear to it to represent public officers or classes of public officers; and

(c)      if the President deems fit, one member appointed by the President acting in accordance with his own deliberate judgment:

 

However, a person shall be disqualified for appointment as a member of the Commission if he is a public officer. The Chairperson and Deputy Chair-person of the Commission shall be elected by and from members of the Commission using such consensual mechanism as the Commission deems fit.

As can be noted, the National Assembly is only required to consult with the unions that represent public officers, and therefore it does not necessarily follow that its nominees must come from the trade union movement. In any event, a member of any such union sitting on the Commission faces a serious conflict of interest. Whose interest would such a person serve, that of the State or the public; or the interest of the membership of the concerned union?  It is also not clear whether the Assembly was involved and whether such consultation took place. If it did, the decision to have two union representatives on the Commission is clearly against the norms of good governance. The fact that this was the practice of the previous Administration is no justification for its continuation.

It is relevant to note that one of the recommendations of Commission of Inquiry into the Public Service, established in August 2015, is that “the PSC should at all times be constituted with suitably qualified and competent persons of unquestioned integrity who would strive to be fair and impartial in the execution of their duty in consonance with the constitutional prescription that they exercise independent judgment and not be influenced by political and other external or extraneous considerations”.

Announcement of salary increases for public servants

Last week, the Government announced wages and salaries increases for public servants for the year 2017 retroactive from 1 January. The monthly minimum wage has been increased by 8% from $55,555 to $60,000. Prior to 2015, the minimum wage was $35,000. Therefore, over the three-year period of the Coalition Government, the minimum wage has increased by 71.4%, which is not unreasonable, considering the current state of the economy.

 

The details of the other increases are as follows:

 

Monthly salary range                               Percentage increase

                                                                                                                      (%)

$55,555 to $99,999                                                          8.0

$100,000 to $299,999                                                      6.0

$300,000 to $499,999                                                      5.0

$500,000 to $699,999                                                      4.0

$700,000 to $799,000                                                      2.0

$800,000 to $1 million                                                     0.5

 

While the granting of higher increases for employees in the lower salary scales should be viewed in a positive light, it is unfortunate that the Government and the GPSU were unable to reach an agreement on the quantum of the increases.

 

Broken promises

This is the third consecutive year that the Coalition Government imposed unilateral increases, despite faithful promises that such increases would be based on a system of collective bargaining with the concerned unions. The previous Government had done the same for decades and was roundly criticisms by the present Government while in Opposition. Stabroek News quoted several statements by the President in support of the re-instatement of collective bargaining rights in relation to wages and salaries and other conditions of service.

During the 2015 election campaign, the Government had stated that it would grant “significant salary increases for government workers, including nurses; teachers in primary, secondary and tertiary education; security personnel; and civil servants on the traditional payroll”. The average salary increase over the period 2008-2014 was 5.6%, compared with an average inflation rate of 5.4% for 1995-2015, indicating that over the years, there had hardly been any increases in wages/salaries in real terms. The previous Administration had neglected, indeed sidelined, the traditional Public Service in preference to a ‘parallel’ service comprising handpicked persons employed on a contractual basis at salaries and other conditions of service significantly higher than those of the traditional public service. As at the end of 2014, contracted employees stood at 20%. Today, that number stands at almost 30%.

In condemning the 5% increase in wages/salaries granted to public servants in 2014, the Government, while in Opposition, had demanded that the then Administration respect the collective bargaining agreement with the GPSU and enter into a sincere and serious negotiations with the Union aimed at paying reasonable and meaningful increases to public servants. It called for an immediate review of the conditions under which public servants work with a view to offering “a living wage”. The Government had also stated that public servants were frequently unable to afford the cost of some basic household expenses and often are forced to borrow money for emergencies and to settle day-to-day expenses.

Regrettably, the current Administration’s first task in relation to salary increases was the approval of a 50% increase to Cabinet Ministers. Regional Executive Officers were also reportedly granted substantial increases in salaries and allowances. However, the traditional public servants were granted a 10% increase effective from 1 July 2015, which translates to a 5% increase for the year. The Government’s explanation was that this was an interim measure pending negotiations with the GPSU, the outcome of which is yet to materialise.

At a press briefing at the time, the Minister of Finance had stated that public servants’ expectations of any significant increase needed to be tempered and that consideration was being given instead to a “top-up” in salaries. He referred to the statement from the International Monetary Fund (IMF) about the need for moderating the growth of wages, as well as reforming public enterprises with a view to reducing their reliance on government support. The IMF further stated that increasing current expenditure would “crowd out space for public investment, despite significant donor support”. The GPSU had taken objections to the Minister’s statement which it felt was prejudicial to not only the outcome of any negotiations with the Union but also the work of the Commission of Inquiry into the Public Service.

 

Report of the Commission of Inquiry

One of the terms of reference of the Commission of Inquiry into the Public Service was an examination of the principles on which salaries and wages of public servants should be fixed, especially: (i) the mechanisms for determining wages and salaries; (ii) the level of consistency between the salaries and the various levels of public servants; and (iii) the basis on which remuneration for various levels of public servants are determined.

In its report which was laid in the National Assembly on 24 May 2016, the Commission of Inquiry found that the across-the-board increases in wages and salaries over the years are contrary to the principles of collective bargaining and that it is wrong for persons performing below certain standards to be the paid the same as those who perform satisfactorily. In addition, there is an urgent need for a review of the existing rules and regulations and for a new staff appraisal system to be introduced as a means of identifying training needs, among others.

It should be said that if increases in wages and salaries are not linked to performance, there is no incentive for employees to give of their best, which is one of the key drawbacks to the effective functioning of the Public Service. Up to the late 1980s, a system of performance appraisals was in place and merit increments were granted based on performance.

In a media release dated 24 August 2016, the Government had agreed to consider a review of allowances for public servants immediately upon the conclusion of the negotiations for wages and salaries. In this regard, a tripartite committee comprising representatives from the Department of the Public Service, the Ministry of Finance and the GPSU was established to address this issue. The Government also acknowledged the fundamental need for a restructured Public Service which would include: (i) adjustment of scales for wages and salaries; (ii) implementation of a merit increment system; and (iii) resolution of the issue of bunching.  Regrettably, there was no fruitful outcome in relation to the work of this committee.

In its report, the Commission of Inquiry emphasized the importance of dialogue and agreement on procedures in resolving and settling differences and referred to the practice in Jamaica where there is a high degree of collaboration with the Jamaica Civil Service Association. It therefore recommended that a careful study of the Jamaican approach be undertaken with a view to “determining its relevance and likely contribution to improving relationships between the PSC and the GPSU in Guyana”.

 

To be continued               –

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