Businessman bemoans high cost of redundancies
MONTEGO BAY, St James — Managing director and owner of Barnett Limited, Mark Kerr-Jarrett has described the payouts legally due to individuals fired or positions made redundant as bad for business, both for those let go and the companies involved.
“One of the greatest obstacles to upskilling and retooling business and industry is the onerous conditions imposed on employers through the Redundancy and Termination Act,” he said.
Kerr-Jarrett was addressing Prime Minister Andrew Holness who was part of the audience gathered at the opening of his latest venture, Barnett Business Centre in Montego Bay, last Thursday.
“Let me add that I have no reservations about paying notice pay to severed employees because this will support them during their period of looking for new employment. But with due respect, sir, the redundancy payments are also a disincentive to looking for new employment and major burden to the businesses in increasing efficiency, productivity through retooling and upskilling,” he added.
Under the Employment (Termination and Redundancy Payments) Act of Jamaica, an employee is entitled to a minimum of two weeks’ pay for each of the first 10 years of employment and three weeks’ pay for each year after the 10th year of employment/service.
However, using his own company as an example, Kerr-Jarrett said payouts to former employees can be onerous and jeopardise future plans that initially required the staff changes. He explained that in 1996, when Barnett Limited wanted to move from manual to mechanical harvesting of sugar cane, it would have cost more to reduce their crew from 102 to nine than the cost of the machinery that would do the job of those let go. The machinery cost US$550,000 then.
“We very nearly did not do it. And to be honest, sir, it did not work because the burden of the loan payments to support the termination and redundancy and the new equipment, we couldn’t manage both. And we ended up selling the equipment four years later and shutting down the sugar operations,” Kerr-Jarrett explained.
In the years since then, he has refocused and repositioned Barnett Limited. His latest facility adds business process outsourcing (BPO) space to what already exists. It is expected to generate 2,000 jobs and US$1 million in annual income. The Zone User Space aspect of the operation will generate 200 jobs and US$300,000 in income each year. Barnett Business Centre is also expected to provide supporting services to the surrounding communities of Westgate, Montego Westgate Village, Irwin, Sign, Granville, Retirement, Catherine Hall, and Westgreen. Offerings include a quick service restaurant, pharmacy, medical offices and labs, a convenience store, courier services, as well as a full-service salon and more.
Kerr-Jarrett, who conceptualised the business centre in 2019, expressed satisfaction that more people are employed in one of the five buildings of the US$15-million development than were employed on the more than 2,000-acre sugar cane plantation. He told the prime minister that Barnett Limited wants to continue to develop the more than 6,000-seat tech park but there is something he needs in order to accomplish that.
“Our greatest challenge in all aspect of the private sector growth is the availability of quality human resources. The medium-to long-term solution, without a doubt, will require a total reformation of the education system and this will take time. But I would like to throw out a suggestion I made 15 years ago, sir, and that is the fastest way to free up trained and human resource is through the public sector reform programme. Right now every sector in the economy is finding a very challenging time finding suitable employees to fill nearly every human resource aspect of business processes and administration,” the businessman appealed to the prime minister.
While his suggestions may be “scary” he said, he is convinced that his proposals will spur economic growth and “give the private sector some breathing room to further expand by making available the fiscal space and the human resources needed to facilitate further economic growth and job creation”.
There has been a raging debate about the need to import workers to fill gaps in Jamaica’s labour market. Some are of the view that the skills needed are not available locally while others blame the problem on low salaries that make the jobs unattractive.
Kerr-Jarrett is calling for decisive action that will change the way the labour market is structured.
“Let us not look at public sector reform with trepidation, but consider it as a reward for all of our hard work and a way to further facilitate the growth and expansion of the economy by redeploying some of the most well trained and experienced human resources available into the productive sector and thus change them from being a liability to an asset on the national balance sheet,” he urged.
He called on the prime minister to be bold enough to take up his suggestions which he said will guarantee the ruling party a third-consecutive term.
Holness was cautious in his response.
“I am certain that this new development is going to put even more pressure on our labour force. I hear the calls that are being made. It is a delicate subject. I tread on it carefully,” the prime minister said.