May 20 – 24, 2019 was commemorated as Workers’ Week in Jamaica. The activities planned to mark this important week were as low-keyed as the national labour productivity figure itself. It’s time we face the truth about low labour productivity, which is a primary contributor to gross domestic product (GDP) growth, and find solutions to the problem.

Writing in the April 9, 2018 edition of The Gleaner under the headline ‘Productivity improvement necessary for growth’, then executive director of the Jamaica Productivity Centre, Dr Charles Douglas said: “Examining the labour productivity performance of the Jamaican economy, the data reveals that from 1951 to 1975 labour productivity growth averaged an impressive 5.3 per cent annually. For the next 42 years (1976 to 2017) average labour productivity growth was negative 0.61 per cent annually.” What is the solution to labour productivity that is near the level it was 20 years ago, and lower than that of our major trading partners?

An essential first step is to modernise the legislation governing workplace practices. The Labour Relations and Industrial Disputes Act (LRIDA), which was enacted 44 years ago, is dangerously outdated, ill-suited to the modern workplace, and therefore a major contributor to low labour productivity. Trade union luminary and head of the Hugh Lawson Shearer Trade Union Institute on the Mona Campus of The University of the West Indies, Danny Roberts, although defending the Industrial Disputes Tribunal against charges that its rulings tend to favour labour, is covered in the media admitting as much on Saturday, February 16, 2019.

The actions and inactions of employers also rank high among the causative factors leading to low labour productivity. Going back as far as the Carl Stone’s 1982 Worker Attitudes Survey, poor management and supervision ranked as the factor negatively affecting the work environment the most — ranking ahead of work conditions and physical environment, the nature of the work, health and safety, and pay. The priorities may have changed since then, but not the responsibility of management to improve worker morale and the efficiency of production.

No analysis of low labour productivity in Jamaica would be complete without referring to the inadequacy of the education system in producing graduates with baseline knowledge and competencies required for global competitiveness. The clearest evidence of this can be seen in the latest Caribbean Examination Council (CXC) results. CXC Registrar Glenroy Cumberbatch lamented the fact that only 59 per cent of the 60,000 candidates sitting five or more CXC subjects attained at least grade three, which is the minimum pass mark. Only an estimated 20 per cent of the age cohort gets the opportunity to take the exam — many having dropped out of school or they were screened out for not being ready. In response to these damning statistics and their negative impact on labour productivity, former Education Minister Senator Ruel Reid announced plans to launch the National School Leaving Certificate to replace the Caribbean Secondary Education Certificate (CSEC) as the minimum standard required for entry-level jobs.

Left with few options to boost labour productivity, employers have been turning to contract for services (ie third-party contract workers). An estimated one-third of the American workforce is currently employed under this or other innovative employee contracting arrangements. In Jamaica, by contrast, the issue of contract workers is constantly in the news, given a bad rap by politicians seeking to curry favour with voters and union officials who see it as a threat to their hold on membership.

Speaking in the 2018-2019 Sectoral Debate, Opposition spokesman on labour Horace Dalley did not mince words in referring to, “This pernicious practice of contract work, which has wiggled its way into our industrial relations landscape,” and called on Government to “join with the Opposition in promulgating legislation as a matter of urgency to protect the vulnerable workers of Jamaica from the oppressive, exploitative and unfair system of employment relations. It is wrong, it is exploitative, and it is union busting”. This is only one of many such statements that have made the news.

It cannot be denied that workers’ rights need to be protected through modern, comprehensive legislation in an era of both contract of services (ie directly employed workers) and contract for services. Neither can it be denied that the juxtaposition of political representation and union membership has led to some archaic industrial labour relations regulations that have resulted in Jamaica being at the bottom in labour productivity compared to our trading partners. The one-sided debate over contract workers threatens to take us further in that direction.

Contract for services is on the rise not just in Jamaica, but worldwide, for good reason. At the strategic level it has proven to be an effective asset de-intensification strategy; allowing employers to focus on their core business and revenue-generating activities. It has also been found to be a useful measure for boosting productivity through the use of performance contracts and for converting fixed labour overheads to a variable cost.

Done correctly, and for the right reasons, all parties — employers, workers, government and the country as a whole — will benefit from new and innovative approaches to employment of personnel. Heavy-handedness by government, in the name of protecting workers’ rights, should not be allowed to yet again block the path to increased labour productivity.

hmorgan@cwjamaica.com