FREED of the wage pact that put salary demands on hold for two years, public sector employees and their trade unions are now looking for sweet deals that could tack $15 billion more onto the budget. If government were to meet all union demands, it would need another $12.8 billion, while the police are asking for $2.5 billion more.

The unions have flatly rejected government’s 20 per cent offer, to be paid out over two years, and are holding for a 54 per cent increase – 29 per cent increase in year one, and 25 per cent in year two.

Senator Dwight Nelson, president of the umbrella Joint Confederation of Trade Unions (JCTU), said the workers would be less flexible in their negotiations this time around.

“We made a sacrifice for the country, but now it is not being reciprocated,” Nelson told the Sunday Observer, referring to the expired agreement.

“We hope that there can be an agreement soon, but we have set no deadline for the negotiations to end,” he said of MOU2.

In the months leading up to the end of the historic accord on March 31, the government initiated discussions with its workers through the JCTU to formulate an acceptable salary package for both sides.

Coming out of those meetings government proposed to create a pool of funds, representing 20 per cent of last year’s wage bill, not including the MOU allowance provided to workers monthly since September last year. “The offer was for 13 per cent of the current wage bill in the first year, and then seven per cent of current wages and salaries in the second year,” said Nelson.

“We could not accept that.”

Sunday Observer calculations show that government has tabled $56.6 billion for compensations to its employees (not including the 8,000 members of the police force) in its 2006/07 Estimate of Expenditure, an increase of $3.8 billion over last year’s budgeted sum.

The provision for the police pushes the total wage figure to $64.7 billion, but that sum does not include travelling and other subsistence allowances.

If the unions agree to the government’s offer, Finance Minister Dr Omar Davies would only have to tack on an additional $3 billion to what has already been tabled for the first year, and then another $3.7 billion for the fiscal year 2007/08.

The $3 billion, according to state minister of finance Fitz Jackson, could be redistributed out of the $8.9 billion budgeted for contingencies in the $358 billion budget tabled Wednesday by Davies.

“The contingencies set out in the budget could be used to accommodate increases in wage and salary levels,” said Jackson.

He noted that the estimates put forward Wednesday would not reflect the final level of wages, which he said would only be determined upon completion of negotiations with the workers.

“The estimate is just that, an estimate,” Jackson said. “The supplementary estimate of expenditure will more accurately reflect the level of wages.”

On the other hand, trade unions are demanding that the MOU allowance of $400 to $600 paid to public sector workers monthly, become permanently affixed to their basic salaries, and that a 20 per cent increase be applied to that amount.

The MOU allowance, which was made available to public sector workers in mid-September when government failed to keep inflation at single digit during the life of MOU1, increased last year’s wage bill by $2.8 billion, for the six-and-a-half months up to March 31.

Annualised, the MOU allowance is equal to $5.1 billion, or nine per cent of salaries.

The suggested 20 per cent increase would add another $11 billion to last year’s wage bill (amounting to $52.7b, excluding the police), pushing the unions’ demand within the $16-17 billion range.

But Davies has only provided $3.8 billion more for salaries.

In other words, the unions want $12.8 billion more than government has budgeted for in the current year.

If Davies were to agree to those terms, he would have to fully cannibalise the $8.9 billion contingency fund and find another $3.9 billion just to meet the shortfall.

The government, which is anxious to have the MOU2 in place by April 30 when the extension to its MOU allowance expires, will meet with the unions at the JCTU headquarters to continue discussions on April 21.

In the meantime, Nelson says the unions will meet three days ahead of those talks to review the numbers presented to them by government, and to establish an exact figure to take to the bargaining table on Friday.

“We have distributed the data for review by each union, and we will meet next week Tuesday (April 18) to make a collective determination.,” said Nelson.

“The JCTU has made a decision that the amount is not adequate (and) the nurses and teachers have also made it absolutely clear that they will not take the offer on the table.”

Ruel Reid, president of the Jamaica Teachers’ Association, whose membership runs to 20,000, was dismissive of the offer from government.

“The offer put forward would only be six per cent above the current level, when you include the MOU allowance,” Reid noted.

“They really should attach the MOU allowance to basic salary, and then give us 20 per cent increase, a total of 29 per cent in the first year. We would like to get a 25 per cent increase in the second year.”

But these negotiations, according to Reid, will ultimately determine whether another MOU will be agreed on.

“The MOU that is being negotiated now will be heavily influenced by the wage policy going forward,” Reid contended. “There will be no new MOU without an agreement on salaries.”

It is not clear how flexible the government can be in adjusting wages, or whether job cuts will be examined as an option now, considering that unions had initially embraced the MOU to secure 15,000 public sector jobs.

The number of paid government employees had increased year over year from as far back as 1996, when the number of persons employed in the public sector totalled 90,800.

This figure ballooned to 134,930 in 2003, when the problem reached a head, as government’s wage bill spiralled out of control.

In 2004, this figure dropped to 119,000 employed by government, the same as in 2005.

Jackson, who is heading negotiations from the government’s side, did not shed any light on the matter, however, saying he had no intention of “negotiating through the media”.

But as high as the trade unions demand appears, the Jamaica Police Federation (JPF), which believes the government should view the constabulary as a priority, has even loftier goals.

“We are asking for 40 per cent increase on basic salary in the first year, and 35 per cent in the second,” said Sergeant David White, JPF public relations officer.

“We are also demanding that we be provided with the training and tools that we need to perform our jobs effectively.”

Added White: “The police federation could not accept that figure (20 per cent over two years). When we look at inflation over the last five years at 56 per cent, and to be faced with 12 per cent inflation this year again, it cannot be expected that a policeman can work under these circumstances.

He or she would be unable to take care of his or her family. We work in a high risk environment, and although remuneration is not everything, it is certainly one of the key motivational factors.”

Negotiations for the police are separate because they are not allowed by law to be unionised.

The government has tabled $8.1 billion for compensation to employees for the police force, $565 million or 7.5 per cent higher than was tabled the year before.

The 40 per cent increase sought by the police would push that wage bill to $10.6 billion in the first year, and would require the government to find another $2.5 billion for this fiscal year.

The increase that has already been tabled is lower than the one-off payment of $50,000 each made to Special Constabulary Force officers in February of this year.

That cost the government was $641.6 million.

The finance ministry tabled $1 billion for training of policemen for 2006/07, an increase of 54 per cent over the amount spent on training in the fiscal year just ended.

thamec@jamaicaobserver.com

The offer: 13% in year one, 7% in year two (20 per cent)

The counter offer: 29% in year one, 25% in year two (54 per cent)

The police want: 40% in year one, 35% in year two (75 per cent)

The middle ground: still to be determined