Salary increases, contracted employees and the COI report

accountability-watchOn 3 September 2012, we had carried an article entitled “State employees and the Public Service Commission” in which we bemoaned the fact that the then Administration was operating with two types of public service: the traditional public service; and a parallel service comprising hand-picked persons recruited on a contractual basis at emoluments and conditions of service superior to those of the tradition service. We suggested that because of this practice the traditional public service was completely neglected and was dying a slow death. We also referred to our inheritance from the British of a politically neutral and “permanent” Public Service. We stated that governments may come and go, but it the Public Service that remains to serve the government of the day and to provide the institutional memory for continuity.

Today, we consider three main issues that the Public Service continues to grapple with: the recent salary increases; the extent to which contract employees continues to be employed; and the outcome of the Commission of Inquiry into the Public Service.

Salary increases for public servants

Since the Government’s announcement of salary increases for public servants ranging from 10% for employees earning below $99,000 per month to 1% for those earning in excess of $1 million, there have been mixed reactions from the public, especially considering: (a) the election promise of a substantial increase; and (b) the substantial increases in salaries for Ministers of the Government within weeks of the new Administration taking up office. The Guyana Public Service Union (GPSU), quite understandably, is unhappy with the Government’s decision since its initial proposal was for a 40% increase, later amended to 25%, in addition to the commencement of negotiations on allowances. The Union must continue to agitate for the rights of workers in terms of emoluments and conditions of service while the Government, for its part, must of necessity explain the rationale for its decision. This it did via a press release dated 24 August 2016.

In the said release, the Government 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: (a) adjustment of scales for wages and salaries; (b) implementation of a merit increment system; and resolution of the issue of bunching.  Each of these would entail an additional cost to Government and corresponding increased earnings for public servants.

Last year, public servants received a 10% across-the-board increase with effect from 1 July 2015. This means that employees earning below $99,000 would have received a 21% increase since the new Administration took up office. This is in addition to increasing the minimum wage from $39,950 to $50,000 per month, and a one-off bonus of $50,000 for employees earning below $500,000 per month.

The Government’s offer therefore does not appear to be an unreasonable one, considering that the economy has slowed down considerably because of a clamp-down on drug trafficking and money laundering through the passing of certain amendments to the anti-money laundering legislation, among other actions taken. At the time when the election promise was made, no one could have predicted the adverse effect on the economy as a result of these actions.

But the Government had no choice since for too long drug trafficking and money laundering have taken a stranglehold on the economy. It will take some time for the sizeable parallel economy to be integrated with the official economy, and for the economy to bounce back.

Contracted employees

In the article on 3 September 2012, we had stated that according to the Estimates of Revenue and Expenditure for 2012, there were 18,819 public servants, excluding teachers, the army and the Police. Of this number, 3,806 or 20% were contracted employees who were recruited without the involvement of the Public Service Commission (PSC), a constitutional body charged with the responsibility of making appointments to public offices. We had concluded that this practice dilutes the authority of the PSC and is very costly to taxpayers, and that the ultimate solution is the reform of the Public Service.

Fast forward to 2016, the following table shows the extent to which contracted employees continued to be recruited in the Public Service:


In absolute terms, the number contracted employees have increased by 60% over the four-year period, despite the adverse effect this practice would have on the morale of the staff of the traditional Public Service. The GPSU appears helpless to come to the rescue of the workers it represents while the PSC is yet to utter a word of disquiet over the continued usurpation of its role in the recruitment of public servants.

In percentage terms, the comparison with the figure of 20% in 2012 is affected by the following:

(a)          The 2012 analysis excluded teachers, the Army and the Police whereas the above table includes teachers and the Police;

(b)          Georgetown Public Hospital Corporation was included in 2012 whereas in 2016 it was removed as a budget agency in view of its corporate status. It now receives a subvention; and

(c)           All constitutional agencies have been removed as budget agencies in view of their financial autonomy and their expenditure being a direct charge on the Consolidated Fund.

If account were to be taken of the above, the total staffing of 27,241 shown in the above table would need to be adjusted downward to approximately 22,500 for the purpose of comparison with the 2012 figure. It would therefore mean that contracted employees as shown in the Estimates of Revenue and Expenditure for 2016 have increased by 7%.  Given the Government’s position on the matter prior to acceding office, one would have expected a significant reduction in the number, and hence percentage, of contracted employees. As it stands, this state of affairs represents not only a continuation of the undesirable practice of the previous Administration but also an augmentation of it.

Public Service Commission of Inquiry

On 18 August 2015, the Administration established a Commission of Inquiry to look into the question of reforming the Public Service with the following terms of reference:

(a)          To inquire into, report on, and make recommendations on the role, functions, recruitment, training, remuneration, conditions of service and other matters pertaining to personnel employed in the Guyana Public Service;

(b)          To determine what measures should be taken to improve the efficiency of the Public Service in the discharge of their duties to the general public;

(c)           To review the methodology used in the classification and recruitment of public servants;

(d)          To examine the principles on which salaries and wages of public servants should be fixed, especially: (a) the mechanisms for determining wages and salaries; (b) the level of consistency between the salaries and the various levels of public servants; and (c) the basis on which remuneration for various levels of public servants are determined; and

(e)          To review/examine the age of retirement of public servants and make recommendations in this regard.

The Commission concluded its work and presented its report to the President on 13 May 2016. The report was laid in the National Assembly on 24 May 2016. The Commission 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 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. The report also spoke of the need to re-activate the Public Service Appellate Tribunal which has not been in place since August 1995. The absence of such a body means that aggrieved public servants have no alternative than to seek redress through the Courts.

Next week, we will consider in greater detail the contents of the report.

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