Finance Minister Hails Historic MOU

Minister of Finance and Planning, Dr. Omar Davies has described the historic Memorandum of Understanding (MOU) signed between Trade Unions representing public sector workers and the Government as a significant occasion. The agreement involves a wage restraint of three per cent for the period April 1, 2004 to March 31, 2006.
“This signing of the Memorandum of Understanding by itself is of significance. It provides a concrete basis for the development of a broader social contract with other groups in the society. But perhaps most importantly, it provides a concrete basis for longer term national cooperation for economic growth and greater social equity,” he argued.
The Minister was speaking at the signing ceremony of the MOU at Jamaica House on Monday (Feb.16), where the document was signed by Prime Minister P.J. Patterson; the Attorney General, Senator A.J. Nicholson; Minister of Labour and Social Security, Horace Dalley; Senator Dwight Nelson, Vice President of the Jamaica Confederation of Trade Unions (JCTU), among others.
Dr. Davies also commended the JCTU and its approach to the dialogue, which had saved some 15,000 jobs. “I wish to place on record formally and public appreciation for the leadership demonstrated,” he said.
He also encouraged other influential groups to sign on to the agreement and stated that discussions had already started with these groups.
Looking ahead, the Minister said, “over the next two fiscal years we will have an opportunity to reflect on Government as employer and the Trade Union movement representing the most critical element of the development process and how our relationship will be determined for the long term”.
Meanwhile, he said a Monitoring Committee would be appointed, comprising representatives from the Government of Jamaica and the JCTU to ensure that partners adhere to the spirit and intent of the MOU.
Speaking on behalf of the Trade Unions, Senator Nelson said that the Confederation was proud to have entered into this agreement and that it had set the machinery working for greater social dialogue within the Jamaican society.
He said that the signing was “historic in that it is the first move of what we expect to be a broader and greater national pact among all the social partners”.
“The Jamaica Confederation of Trade Unions and workers in the public sector have entered into this pact, this Memorandum of Understanding, they have decided to make this sacrifice because they have long yearned for a public sector, which is efficient, properly trained, properly educated, properly equipped and ultimately, properly rewarded,” he said.
Continuing, he said: “This Memorandum of Understanding speaks clearly to the commitment of both the Government of Jamaica and the Confederation of Trade Unions to seek to achieve these objectives.
This is in keeping with the policy position of the Jamaica Confederation of Trade Unions, which has stated quite clearly its definition of the role of the public sector within the development process of Jamaica, and the Confederation of Trade Unions has no regret in entering into this memorandum”.
The JCTU Vice President also castigated those who made “destructive criticisms” about the MOU, noting that the Confederation would not be deterred by those comments. “Suffice to say it is instructive to note that those who have sought to derail the process (are) the same voices which often condemn the Trade Unions as organization seeking only to destroy the country,” he observed.
Under the MOU, wage contracts to come into effect during the period April 1, 2002 to March 31, 2004, and for which there have not yet been any arrangements (with respect to increases), are to be settled strictly within a wage bill increase of three per cent.
Meanwhile, wage contracts that are to come into effect during the period April 1, 2003 to March 31, 2005 are to be settled strictly within a wage increase of three per cent. For the period April 1, 2003 to March 31, 2004 except where offers above three per cent are on the table, the current offers on the table are deemed to be the final offers and the contracts will be concluded on that basis.
For groups with current contracts that extend into fiscal year 2004/05, further implementation of those contracts will be delayed until 2006. During the period of restraint, there will be no reclassifications. Any requests for special cases are to be submitted to the Monitoring Committee.
Meanwhile, Government has guaranteed that it will manage its economic policies in order to ensure that the inflation rate remains within the Government’s targeted band of eight per cent to nine per cent in 2004/05 and six per cent to seven per cent in 2005/06. The Government will also pursue policy to generate a fiscal deficit in the range of three per cent to four per cent in 2004/05 and a balanced budget in 2005/06.
Government will also pursue economic policy to deliver outcomes consistent with a medium term profile where Gross Domestic Product (GDP) will be at two to three per cent in 2004/05 and two per cent to three per cent in 2005/06.
The Government through the Ministry of Finance and Planning will also be implementing measures to cut waste in the public sector. As part of the effort, each agency will establish a Cost Saving Committee to implement measures to reduce waste.
Each Committee will submit through the Permanent Secretary/Head of Department and Chief Executive Officer quarterly reports to the Monitoring Committee detailing the savings achieved.
Details of the MOU can be accessed on the Jamaica Information Service (JIS) website at www.jis.gov.jm.