THE Government has firmly signalled its intention to come down hard on public sector entities which indulge in the practice of contract employment, breaching the country's laws and regulations.

Finance Minister Dr Nigel Clarke said after the current contract work arrangements are replaced with permanent contracts, legal measures will have to be put in place to sanction such arrangements going forward.

Speaking in the House of Representatives on Tuesday, as he tabled a third supplementary budget of $24.5 billion mainly to accommodate payments to another tranche of public sector workers under the Government's new compensation structure, Clarke stressed that some ministries, agencies and departments have engaged in the practice for more than 30 years.

He pointed out that a change in policy to cut out contract jobs would have to be accompanied by companion measures to levy sanctions against entities that employ people in the public service without the requisite approvals, in breach of laws and regulations.

"One of the reasons why this situation has evolved to, over the decades, to be the problem that is today is that ministries, agencies and departments have engaged in the very unworthy practice of hiring persons without the requisite approval," he said.

Dr Clarke gave the first indication of the Government's intent to tackle the issue of contract work in the public sector at a press conference in December to clarify concerns pertaining to the disbursement of back pay to 60,000 public sector workers under the new compensation mechanism.

"This Government is going to take on the intractable problem of having persons in the public service on evergreen contracts. Fixed-term contracts are not a bad idea in themselves but fixed-term contracts are not applicable in all situations; and where we have an egregious problem in the public service — built up over decades — are hard-working Jamaicans who are in evergreen contract employment that keeps on being renewed and they're not made permanent. We are going to fix that, not with an increase; we are going to fix that on a contractual, legal basis…if we wanted to simply perpetuate the existing arrangement we would do what was done in the past, which is you have an increase that's done for the permanent establishment and you just give the same to the contract [workers] but leave the underlying arrangements unchanged. What [we] are saying is that is unsatisfactory," he said.

Dr Clarke said the plan is to replace current contractual arrangements, when they come to an end, with permanent employment. "What would happen is the prorated [gratuity] amounts would be paid, and we would enter into a new contractual arrangement which would mirror whatever their grade level or qualification is," he explained.

Of the total additional budgetary allocation, $23.7 billion covers back pay and news salaries, to include adjustments to the initial restructure proposal following discussions with unions and bargaining groups; the provision of a higher percentage of the third-year target in year one; and overtime hours which were not previously accounted for. Dr Clarke said the additional expenditure is being financed by projected increases in revenues.

"It is important to note that the amount for wages and salaries represents what Jamaica can afford at this time — approximately 11.4 per cent of GDP — and this represents a meaningful adjustment in aggregate from what it was before. We cannot go down...a path of having wages and salaries crowd out critical investments in human capital development and in social and physical infrastructure," he stressed.

Expenditure and recurrent programmes are slated to increase by a net of $2.7 billion, which includes $1.8 billion as a one-off payment to travelling officers for fiscal year 2021/22. "As you know, travelling is discontinued going forward, and we agreed with the unions as a one-off payment in this fiscal year as the final travelling payment from the Government," he noted.

The remaining $1.6 billion goes to the University Hospital of the West Indies to assist with compensation payments for that institution; and $300 million to supplement an increase to existing government pensioners.

Major groups — including the police, teachers, and medical doctors who work in the public system — have not yet come to an agreement with the Government. Dr Clarke insisted that he would not comment on ongoing negotiations, emphasising that it takes time to negotiate separately, with more than 250 ministries, departments and agencies.

The Public Administration and Appropriations Committee is scheduled to meet today to discuss the estimates.

Parliament approved $30.4 billion in the second supplementary estimates in November, to facilitate back pay retroactive from April 1, to 60,000 central government workers, along with the first payment of their new salaries.