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HomeNewsEconomic uncertainty hinders payment of salary increases, says government

Economic uncertainty hinders payment of salary increases, says government

Government is questioning if it is “being pushed to a situation…to look at cutting expenditure and reducing the size of the workforce…” in light of the trade unions’ stance regarding its request to defer salary increases for 2021. 

One of the trade unions representing public officers maintains that it is not in agreement to defer salary increases due this month while the other two unions are willing to agree only if government commits to the attached terms and conditions.

President of the Grenada Union of Teachers (GUT) Marvin Andall claims that government is not truthful about its financial standing, stating that “the GUT’s leadership is of the view that a government that can pull US$60 million from underneath the mattress ought not to be seeking a deferral of a mere 4% salary increase.”

He explained that a teacher who works for $1,500 per month will get only $60 with the increase. 

Andall said the union communicated to the Government Negotiating Team that it expects all teachers to receive their increases at the end of this month.

On the other hand, President of the Public Workers Union (PWU) in jointly negotiating on the matter with the Grenada Technical and Allied Workers Union (GTAWU) said “We will not accept any deferral if we do not have a signed agreement before the 15th of this month.”

PWU President Rachael Roberts explained that PWU and GTAWU will defer only up to June 31, 2021 with a 0.5% interest for each month that the increase is delayed. They also requested for the full sum to be paid retroactively by the end of the July of this year.

More so, both unions requested that all contracted workers be made permanent via the Public Service Commission by April 2021.

In addition, the three unions demand that the docked salaries due to strike action over the reinstatement of pension for public officers, taken during September – December 2017, must be paid in full by this month end.

GTAWU president Andre Lewis told this newspaper Tuesday that they await a response from Government on the proposal.

Recognizing that its revenue collection was down by 50% by the end of June 2020 due to the impact of COVID-19, government had asked the unions and Staff Associations to consider foregoing the salary increase but without a consensus of the unions, government asked for a deferral.

Supporter of the National Democratic Congress (NDC) Raymond Roberts in adding his voice to this issue said “it’s difficult to see how the government at this stage could be asking the unions to forego the 4% salary increases that was negotiated and agreed upon in light of government being able to find US$63 million [to repurchase GRENLEC] as compared to a couple millions to pay teachers and public officers….” Admitting that it may be difficult, Roberts called on government to find the monies to pay the increases to re-establish a good working relationship with the workers.  

Meanwhile, in its defense, Government in a January 12, 2021 press release stated that its request for deferral is due to the uncertainty in the economy that is impacted by COVID-19. “It is difficult to justify using scarce financial resources to fund a permanent increase in recurrent expenditure for workers whose jobs are secure and whose wages/ salaries and allowances are paid on time, in full, every month; particularly where the imperative exists for economic recovery to the benefit of all citizens.”

Government went on to question if it is “being pushed to a situation where it will have to look at cutting expenditure and reducing the size of the workforce as part of this effort?”

In the release, Government said it accepts that it should pay the increase costing $13.2 million but “it is not able to afford payment in 2021 and cannot project when it can pay same, based on the ongoing economic uncertainty.”

Further, it said it is not in Government’s interest to defer the 4% as this means the return of retroactive

salary payments and 8% compounded payable in January 2022. Thus, “Should Government agree to the terms of the Unions’ requests, it will deviate from exercising prudent fiscal management. There is certainly no desire to return to the pre-structural adjustment days when Government had to borrow to fund recurrent personnel expenditure. Government has made clear its intention to share quarterly financial statements with the unions to ensure full transparency in the process.”

More so, Government explained that the 4% salary increase is a permanent addition to Government’s wage bill, unlike the repurchase of the WRB shares in GRENLEC, which was a one-off expenditure on a

revenue generating capital asset. “To equate the two is ill-informed and willfully misleading.”

Further, it said the US$63 million “used for the GRENLEC repurchase came from grants and soft loans which were intended for capital development and any deviation can jeopardise Grenada’s future eligibility for such funding.”

Nonetheless, “Government reassures of its commitment to secure the jobs of all of its employees,” noting that “it also has a responsibility to manage financial resources, in the best interest of the nation.”

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