STATEMENT TO THE HOUSE OF REPRESENTATIVES BY HON. HORACE DALLEY MINISTER OF LABOUR AND SOCIAL SECURITY ADJUSTMENTS TO THE NATIONAL MINIMUM WAGE


Mr. Speaker, members of this Honourable House will no doubt recall that last year I committed myself and the Government of Jamaica to an annual review of the National Minimum Wage and the Minimum Wage for Industrial Security Guards.
As I explained then, the thinking was to remove the uncertainty occasioned by random reviews, which in some cases was as much as three years apart. By moving towards an annual review, the government, as a facilitator of national production, would assist industry and commerce to plan ahead, and to make realistic projections for the labour cost component of their enterprises. Another reason, Mr. Speaker, why an annual review is of paramount importance is to ensure that we continue to satisfy one of the primary reasons for the establishment of the National Minimum Wage Law in the first place, and that is to provide additional support and a vital safety net to protect the most vulnerable groups in our society.
Mr. Speaker, I must apologise to this Honourable House, and the Jamaican people for having missed our self-imposed effective deadline of January 1, 2005 for the National Minimum Wage and the Minimum Wage for Industrial Security Guards.
Unfortunately however, by the time the Commission completed its deliberations, Parliament had already had its last sitting for the calendar year, making it impossible to put the proposed changes before the House until now.
In keeping with the priority with which we regard this matter, Mr. Speaker, I immediately submitted to Cabinet the proposed increases for consideration. As a consequence, I felt compelled to advise the public about the unavoidable delay in the announcement of the proposed adjustments, and as a result, a set-back in the implementation date.
Mr. Speaker, I would like to once again thank the members of the Commission for their dedicated and faithful service over the years. The Commission is a tripartite body, with secretarial services and support provided by the Ministry of Labour & Social Security. Under the competent chairmanship of respected Attorney-at-law Ms. Norma Linton, the Commission has an employers’ representative in the person of Mr. Silvera Castro of the Caribbean Cement Company, and a workers’ representative in the person of stalwart Trade Unionist, the Honourable Hopeton Caven, O.J.
During its 2004 sitting, the Commission, received submissions and recommendations from the employers, trade unions, the Industrial Security Guards, the government voice through the Planning Institute, the Jamaica Household Helpers Association, and several other interest groups. In fact, Mr. Speaker, my office received several calls, messages and notes from individuals, making their own invaluable contribution to the deliberations. Only this morning, we received another submission from the Medhaven Ministers Fraternal led by the Reverend Dwayne Smith and the Reverend Devon Dick. I appreciate the effort, I respect the views expressed, and thank them for exercising their civic duty. Such a pity it came too late to be factored into the deliberations.Mr. Speaker, I now table for the consideration and formal approval of this Honourable House, the following adjustments to the National Minimum Wage and the Minimum Wage for Industrial Security Guards:
Effective Monday, January 31, 2005, the new rates will be as follows:
The National Minimum Wage will be increased to $2,400.00 per week, up from $2,000.00 per week, an increase of 20 percent;For the Industrial Security Guards the hourly rate will be increased to $90.00 per hour, up from $ 80.00 per hour, an increase of 12.5 percent.For the Industrial Security Guards:Life Insurance coverage to be sustained at $1 million with double indemnity protection both during and outside hours of work;Laundry Allowance will be increased from $16.00 per hour to $18.00 per hour, an increase of 12.5 percent;Firearm Premium Allowance will be increased from $17.00 per hour to $20.00 per hour, an increase of 17.6 percent;Dog Handler’s Premium Allowance will be increased from $12.00 per hour to $14.00 per hour, an increase of 16.7 percent.
Mr. Speaker, it is important for me to point out that the proposed 20 percent increase in the National Minimum Wage was arrived at after careful consideration. The accumulative inflation rate for January to November 2004 stood at 13.1 per cent, and for the calendar year it is not expected to exceed 14 percent. The increase will therefore keep the most vulnerable Jamaican workers ahead of inflation.
In arriving at this figure, Mr. Speaker, we also had to be mindful of the fact that many Jamaicans of modest means have little option but to employ the services of domestic helpers, just to enable them to go out and earn a living wage.
Any Minimum Wage set my government therefore must remain sensitive to the economic circumstances of those workers in the Private and Public sectors.
We noted in particular the sacrifice being made by Public Sector workers under the Memorandum of Understanding, many of whom have to employ household helpers. We therefore had to balance the interest of both groups and carefully consider the implications for the wider economy before arriving at a reasonable Minimum Wage adjustment.
Mr. Speaker, some groups in lobbying for a lower increase than we have recommended, advanced the argument that any double-digit increase in the National Minimum Wage would lead to the possibility of job loss. While common sense might suggest that this is possible, empirical data from a range of developed and developing countries have failed to establish any direct link between these two variables.
I would like to assure the House, Mr. Speaker, that the level of increase proposed represents an outcome that defines the barest minimum we can reasonably expect a worker to survive on, and a level that can be absorbed without any possible shocks to the economy.
Of course, Mr. Speaker, it is always necessary to remind the public that the Minimum Wage is not a recommended salary, but a wage flooring. In fact, many employers of conscience have long determined that in order to encourage decent and dedicated work, and to reasonably reward workers for their service, they must offer wages well above the legal National Minimum Wage, once they have the ability to pay.
Mr. Speaker, there has been some revival of the suggestion that the Ministry of Labour and Social Security considers a return to the days of differentiated categories for the National Minimum Wage, based on the sector of employment or category of work.
Upon careful examination, Mr. Speaker, this is not a practical course. It would involve the introduction of additional layers of bureaucracy, and be extremely difficult to enforce.
Mr. Speaker, today I give notice that the Ministry of Labour & Social Security will this year work to secure an amendment to the relevant legislation governing the National Minimum Wage to ensure a more punitive schedule of sanctions for non-compliance.
Mr. Speaker, before I close, I have an important word for the employers of security guards. I would like to remind them that recent amendments to the Labour Relations and Industrial Disputes Act have incorporated a wider definition for the term ‘worker’. Section 2, sub-section (b) of the Act, Mr. Speaker now defines ‘a worker’ as:”An individual who has entered into or works or normally works (or where the employment has ceased, worked) under contract, however described, in circumstances where that individual works under the direction, supervision and control of the employers regarding hours of work, nature of work, management of discipline and such other conditions as are similar to those which apply to an employee.”
This definition, Mr. Speaker, in the opinion of the Government of Jamaica clearly places a security guard within the legal ambit of a worker, even where s/he is classified as an ‘independent contractor’. By virtue of this, security guards, by law, have a legitimate right to freedom of association and the right to collective bargaining.
I intend, as Minister of Labour & Social Security, to fairly, fearlessly and even-handedly enforce the law and to protect the rights of employers and workers alike in securing an environment for greater productivity, competitiveness and decent work.
Mr. Speaker, this Honourable House is being asked to note the changes in the rates of compensation for Industrial Security Guards, and to affirm the proposed increase in the National Minimum Wage, effective Monday January 31, 2005.
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