State can lose millions in grants if union demands are accepted

by Linda Straker

• Trade Minister said union claims of 25% gratuity not in MOU, nor in collective agreement
• Fiscal Responsibility legislation puts a cap of 9% of GDP overall on expenditure

Trade Minister Oliver Joseph said the State stands to lose millions in grants if the present government accepts the proposal from trade unions representing public officers to provide retired workers with 25% gratuity upon retirement.

“This amount breaches the Fiscal Responsibility legislation,” Joseph told the media in the Tuesday weekly post-cabinet briefing. The 2015 piece of legislation was enacted during the Structural Adjustment Programme to ensure that the fiscal and financial affairs of government are conducted in a transparent manner.

It also ensures full and timely disclosure and wide publication of all transactions and decisions involving public revenues and expenditures and their implications; to ensure that debt is reduced to, and then maintained at, a prudent and sustainable level by maintaining primary surpluses that are consistent with this object; and to ensure prudent management of fiscal risks.

The Fiscal Responsibility legislation puts a cap of 9% of GDP overall on the amount government can assign for salaries, wages and other expenditure per year.

Disputing that government signed an agreement for amount to be 25% for gratuity, Joseph who was part of the original negotiations in which changes were made to the number of years that would qualify a public officer for pension and gratuity, challenged the union to take the matter to court if there is a guarantee in any legislation that the gratuity payment must be 25%.

“The union claims of 25% gratuity that the government had agreed with it, is not in the MOU, it is not in the collective agreement, so they could not provide any document that was signed between the union and the government,” said Joseph who explained that the 70% for pension referred to by the union is one that was negotiated and not as a result of a legislation.

“Government is under no obligation to pay pension and gratuity after 1985,” said Joseph. Elaborating on a court ruling which guides the state with regards to pension and gratuity, he said that the court ruled that government has a legal obligation to public workers before 22 February 1985 because that was the day the Government Pension Disqualification Act came into effect. A public officer had challenged government for her pension and gratuity claiming she had joined the service before the law came into effect and was only receiving a pension from the National Insurance Scheme (NIS).

Joseph said that Government’s Negotiating Team is prepared to continue negotiations with the trade unions but the 25% will have to be withdrawn.

“The agreement signed was for restoration and reform. We restored the pension to those who were in the system before 22 February 1985 costing us EC$7 million. So now if you want to reform, it is to address workers from 1985,” said Joseph who reiterated that government cannot act irresponsibly.

“The union demands will increase government expenditure to the payroll and that is not affordable and it’s not sustainable, he said.