Where we stand‎ > ‎News & Comment‎ > ‎


posted 4 Nov 2010, 11:34 by Gerry Kangalee   [ updated 25 Jan 2011, 08:05 ]
The negotiation between the Public Services Association is not just another negotiation. It is significant in that its outcome will affect the balance of class forces in the society and it will shape the politico/economic situation for the next ten to fifteen years. 

The negotiation is taking place against the background of the attempt by ruling classes all over the capitalist world to shift the burden of the crisis they created onto the backs of working people. 

In Greece, France, Spain and Portugal workers are engaged in bitter struggles to maintain their hard-won benefits while employers are using their political muscle to not only suppress wages but to dismantle the social wage. Public sector workers are of course on the frontline of that struggle. 

Public servants have been in this position before. In the nineteen eighties when the NAR took office, they attacked public servants with gusto removed their COLA and cut their wages. 

This opened the way for an all-out assault on the trade union movement which weakened the movement considerably and reduced its social and political weight. 

The Minister of Finance, the venerable Winston Dookeran, was of course in the NAR cabinet when the assault was launched against public servants. 

According to Mr. Dookeran (in his budget speech)”… some 83,000 persons (are) employed in the Civil and Teaching Services and the Protective Services and Statutory Authorities, as well as daily rated employees of the Central Government and Municipal Corporations.” 

The public servants are, therefore, the thin edge of the wedge. The struggle of public officers is a struggle for all workers employed in the public sector! Thousands of public sector workers are involved in negotiations: Daily Paid workers, teachers, workers at WASA, T&TEC, PTSC, MTS, Petrotrin, CDA, NP, fire services, prisons and others are in the same boat as public officers. If they defeat the PSA they will pick off the rest one by one. 

Other public sector workers know that the PSA struggle is their struggle and it is inevitable that they will not just stand aside and look! We, therefore, expect that the heat is going to intensify. The institutional memory of the NAR’s attack on the labour movement is as strong two decades later as if it happened yesterday. 

The government has been crying that the PSA demands will increase the budget deficit to $12.6 billion. We wonder how much CLICO will increase the deficit. During the last fiscal year CLICO received $7 billion from the government and the population has no clue who got that money and what criteria was used to disburse it. That seven billion, not so co-incidentally was the size of the last budget deficit. 

Today we see the Dookeran Plan for CLICO unceremoniously thrown through the window by powerful economic forces and the government engaging in intense discussion with those forces who are demanding $12 billion from the state coffers for making bad investment decisions. 

It really tells you who runs the country and it certainly isn’t the working people. You don’t see the Government crying about how much CLICO is going to add to the budget deficit, do you? All you hear is that CLICO’s collapse posed a systemic risk to the financial system. It was too big to be allowed to fail. 

Well, the working people are saying to the government that we are too important to be ignored and just as the big capitalists licked up Dookeran’s CLICO plan, so too will the working people lick up Dookeran’s “let the workers pay for the crisis” plan. 

It is interesting that when politicians are looking for votes, they talk about serve the people (a Maoist slogan incidentally), but when the people cry out for relief and demand that to which they are entitled, they become statistical line items in a statement of income and expenditure. 

There is a lot of talk from the chattering classes about economic stagnation and the need to stimulate the economy. It is clear that the private sector does not have the strength to do what is necessary in terms of making the investment decisions that the economy demands. Government policy is critical in term of economic recovery. 

Total government expenditure is over 35% of Gross Domestic Product (GDP), whereas the manufacturing sector is just over 8% of GDP. Government is the heavy roller when it comes to the economy. 

But even if government makes the correct investment and expenditure decisions (a big if) effective demand has been on a slippery slope since the latter half of 2008 and the general price level has been increasing at twice the level of wage increases since 2005. 

In addition, most public sector workers have been subsisting on 2007 wages and salaries, as the PSA advertisement says, when bread was $4.75. The 21.2% decline in the Distribution and Restaurants sub sector of the Services Sector in 2009 bears graphic witness to the precipitous fall in effective demand. 

While it may be ideal to make investment decisions that would involve productive activity, implementation would have a lead time lag and the economy needs stimulating now. A decent wage increase for public sector workers may very well be what is needed, to, at least, stem the decline in the economy and keep it ticking over while slowing the rate of job loss. 

Even the Central Bank admits in its 2006 pamphlet on INFLATION:” The impact of wage developments on core inflation in recent years is not clear…” Year on year inflation over the last two months has stood at over 16 and over 13 per cent and there have been no wage increase. 

It must also be noted that most of the goods consumed in T&T is imported – a classical neo-colonial economy, yet a lot of rubbish is talked about cost-push and demand-pull and other textbook inflation fantasies when most of the inflation in the country is imported inflation and is therefore structural. 

Now negotiations do not deal with wages, salaries and monetary allowances alone. There is talk of introducing contributory Pension Plans in the Public Service and for daily paid workers. This is an extremely complex task, not only to agree on the benefit structure and financing of the plans, especially past service benefits, but just as important would be to agree to the structure of governance of the Plans e.g. the composition and function of the management committees of the Plans. Yet in his budget address Minister Dookeran proposed to end all public sector negotiations (not just with PSA) by the end of the year. 

This approach seems more fantastic when we consider that the Minister talks about pay increases based on performance. Even if he gets the unions to agree to the principle, which is most unlikely, it would mean getting agreement on the wholesale restructuring of the human resource function in differently structured organisations with their peculiar historically determined organisational cultures. 

To compound the craziness he speaks of revisiting “the structures of hiring, assessment, and termination,” which we suspect is code for bringing, the shadowy parallel, contract system into the mainstream. The goodly Minister of Finance says his fantasy scheme will “make the civil service attractive to talented people.” Yeah right! 

Meanwhile, contract workers are being knocked from pillar to post, are grievously exploited and enjoy no protection. The early childhood teachers, the primary school clerical workers, the music tutors attached to the Ministry of Education, among others, are all feeling the pain. 

It is important to note that the industrial relations system that applies to the negotiations with the PSA can be characterised as from himself to himself. Whereas, in other negotiations if there is a breakdown the matter is referred to the Minister of Labour, with this negotiation the matter is referred to the Minister of Finance. 

According to Act # 29 of 1965, the Civil Service Act, the Minister of Finance is assigned responsibility for the Personnel Department. In other words he is the Chief Personnel Officer’s boss. Section 14.2 of the same Act says: “The Minister of Finance may from time to time make recommendations with regard to remuneration to be paid to public servants.” 

So it is the Minister of Finance who is responsible for making a wage offer to the PSA. Section 17 of the same Act says that where there is no agreement (breakdown of negotiations) the matter shall be reported to the same Minister of Finance who made the offer in the first place and a dispute shall be deemed to exist. 

The dispute, after a specified period of time, shall be referred to a Special Tribunal for arbitration. This Special tribunal shall be comprised of the Chairman of the Essential Services Division of the Industrial Court and two other judges of the Division. Section 22 of the Act states: “An award made by the Special Tribunal…shall be binding on the parties to the dispute…and shall continue to be binding for a period specified in the award, not less than five years from the date upon which the award takes effect.” 

It is clear that the entire process dealing with public servants’ industrial relations issues is skewed against the workers and is discriminatory in terms of a mandatory five year award if the matter reaches the Special Tribunal. There is surely a case for reform of the law here. 

The People’s Partnership Manifesto says: “We will partner with labour unions to work beyond the frontiers of traditional collective bargaining of higher wages and better working conditions.” Going beyond the frontiers of collective bargaining seems to mean the abolition of collective bargaining. (Some of the material in this article appeared in the Business Guardian of November 4th 2010)