A basic principle in unionized entities where negotiations for wages/salaries are pursued is the ability to pay. Where such ability does not exist, employers invariably implement a wage freeze, reduce the work week, ban overtime or alternatively downsize, thus making employees redundant. In some cases, in order to sustain the viability of the entity, employees voluntarily accept pay cuts. This is the sad reality of private enterprise where survival depends on profitability.
In the negotiations between GAWU and GuySuCo, the company continuously argued that unless production targets were met there would be no increase in wages, a position which precipitated strike action, making a bad situation worse.
So, the ability to pay was further eroded and the acrimony between the parties continued to fester to the point where the company threatened to de-recognize the union.
From all indications the Skeldon factory is stymied by mechanical problems that affect its efficiency, but that notwithstanding, inclement weather, high levels of absenteeism, labour turnover and wildcat strikes also impact on productivity and revenue, thus affecting the ability to pay.
Wages and salary increases also have a complementary effect on other employment costs such as overtime, employers’ contribution to NIS and pension schemes, leave allowances, incentives, etc, which are substantial cost factors.
As a labour intensive industry, the percentage ratio of total employment cost against total expenditure can also indicate which areas of expenditure are given priority.
Sugar workers continue to work under extremely difficult conditions and deserve an increase in wages, but like all industries, such an increase must be granted within the context of affordability. No doubt, this principle was recognized by the President who gratuitously offered GAWU a 5% bonus, not attached to wages, compliments of the treasury.
Unlike GAWU, however, the Guyana Public Service Union was not given an opportunity to argue their case of affordability through the imposition of a 5% salary increase that violates laid down procedures of negotiation within Collective Labour Agreements that are legally enforceable.
As a gesture of good will the President should now extend his generosity to all marginalized workers, mostly single parents who work as security guards, domestics, waitresses, store clerks, pump attendants, and others who barely survive on starvation minimum wages.