TRADE unionist Vincent Morrison says employers should be making arrangements to repay workers who had taken paycuts at the start of the COVID-19 crisis to help keep companies afloat.
He told the Jamaica Observer that employers should treat the funds saved by companies by withholding portions of salaries as loans, and that it is unfair to ask workers to permanently bear the loss.“I don't think it should be a giveaway, I don't think the workers should be subsidising the firm. If they take a paycut to allow the company cash flow to operate efficiently that should be a temporary arrangement and it should be treated as a loan with the normal interest payment to the workers, even over 12 months. It can't be that you ask the workers to take a permanent cut. If the finances of the particular organsiation are that bad, and you have to come to that determination, then the workers should be repaid,” Morrison stated.He also argued that wages are so skewed in the Jamaican labour market that many employees are living off payday loans and borrowing for transportation to get to work. “Most workers don't earn enough to take paycuts. There are companies that have resources to cover the period of the COVID situation,” he said, noting that some entities have used COVID-19 as illegitimate justification to reduce workers' pay.
Morrison also pointed to the disparities in salary arrangements among the various levels of workers, which leaves many at the bottom without disposable incomes. This, he said, impacts the economy as it means these workers have little or nothing to spend after they have covered essential obligations.
President of the Jamaica Manufacturers and Exporters Association (JMEA) Richard Pandohie, however, disagreed with the idea of repaying employees. He stressed that as a result of the pandemic many companies, such as those that supply the hospitality and education sectors, have in fact suffered. “Also, Government-imposed lockdowns to manage the COVID spread have also had a dampening effect on business. Many companies in an effort to stay afloat and to keep as much of their employees engaged tried everything to reduce their cost, including cutting pay and benefits. Thankfully, the moratorium extended by banks on loan repayment also has played a big part in keeping many micro, small and medium-sized businesses from collapsing,” he said.
He said it would not be reasonable or practical to ask employers to repay employees for paycuts during this period. “What one would hope for is that as businesses rebound, the employers will move quickly to restore wages that were reduced,” he told the Observer.Notwithstanding the feeling of optimism that economies will start recovering as the vaccination effort intensifies, Pandohie said the reality is that economies and companies will recover at different paces. “For the most part, business lost during the pandemic is gone. You cannot go back and sell to your customer retroactively,” he stated.