The impact of change in compensation policy on travelling officers
Dear Editor,
Government of Jamaica (GOJ) employees who were in receipt of transport allowances have taken a deeper adjustment to the restructuring of their compensation than every other category of workers because the general percentage of transport allowances relative to basic pay was high and it was also a non-taxable item.
The absorption of allowances was a known policy direction from the time the consultant’s report was first made public, and so it fell to the unions representing public officers and more so the Jamaica Civil Service Association (JCSA) that negotiates increase in upkeep and mileage rates to ensure that this change in GOJ policy regarding the payment of allowances did not put workers in a worse position than they were before the change.
In February 2022 we articulated the JCSA’s position. We met with our delegates and presented the position which we communicated to the Ministry of Finance and the Public Service, which was to gross up the allowance to make it tax neutral.
The position was to ensure we were not worse off because of the change in policy.
The JCSA was faced with the total elimination of all our allowances and benefits to include duty concession. We reported this to the membership and threatened strike action if the ministry went ahead without consultation. We were able to put forward a negotiating position for the Government to pay us for any benefit being given up by way of policy, citing various International Labour Organization conventions.
As a result of this, the Government concentrated on only what could be absorbed into salaries without additional compensation and so settled on transportation allowance as we agreed that we could not conclude the discussion on allowances at the time of trying to arrive at an agreement to allow the implementation of the new salaries. This saw the introduction of the temporary allowance as the bands as designed could not properly absorb the allowances for every travelling officer, even after several adjustments were made, particularly from bands five to 12.
This was not the first time the GOJ embarked on a policy change involving a negotiated allowance. They did so with uniform allowances in the early 1990s, so it was not a question of whether the Government can change its policy but whether we can arrive at a position that would not make us worse off due to the absorption of the allowance and the tax implications going forward. That was the precedent set and the one that guided our positioning on the absorption. This resulted in the guarantee on net pay.
To ensure we were not worse off, the JCSA negotiated a minimum increase on net pay. This was a master stroke by the union, and while the impact of taxation on salaries previously paid eroded the impact of this, the increase in net pay represented the largest salary increase to public officers (including travelling officers) in more than 20 years.
Did the union have the handle? Nowhere can anyone successfully challenge government policy that would not make anyone worse off, but through lobby, negotiation, and advocacy we were able to get better compensation for all workers in the civil service with some exceptions due to anomalies.
These were tough discussions and nothing was offered or given to us. We had to eke out what we have now against an employer that was adamant not to increase the wage bill by more than $100 billion over three years.
The notion that transport allowances was a benefit continues to cause the travelling officer to not recognise that the conversion from a two-part reimbursement system of a fixed (upkeep) and variable (mileage) payment into one variable rate for upkeep and mileage was never the intention of the Government.
The rate of mileage was not addressed until we made it an item for us to sign the heads of agreement. It was the strategic negotiation of the union that caused it to move from $56 per km to $100 per km, retain duty concession, and secure a tax-free lump sum payment for the year we had no agreement on mileage and upkeep. The effect is that the rate of mileage is not inclusive of maintenance and distance travelled.
Would we have wanted more? Of course, but this now sets the basis for future negotiations on the rate of reimbursement to people who use their personal vehicles to do the Government’s work. Given how the Government has implemented the absorption of transport allowances with an effective date of April 1, 2022, we are taking steps to secure the adjustment to the new, fully variable reimbursement of use of personal transport to be retroactive to April 1, 2022. And if this is not done, travelling officers would have been rendered out of pocket for the period April 1, 2022 to November 30, 2022, when the new rate took effect on December 1, 2022.
O’Neil W Grant
President
Office of the President
Jamaica Civil Service Association