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Grenada Prime Minister Says Accepting Public Sector Union Demands Will Financially Cripple The Country

Grenada's Prime Minister, Dr. Keith Mitchell, revealed, in a post-Cabinet press conference, that in 2008, the public debt was more than 110 percent of the island's gross domestic product, and now it’s 61 percent, "a tremendous drop".

Grenada Prime Minister Says Accepting Public Sector Union Demands Will Financially Cripple The Country

ST. GEORGE’S, Grenada, November 21, 2018 (CMC) – Prime Minister, Dr. Keith Mitchell, today, said that his administration is committed to working with public sector unions to come up with a pension package, but it will only be done, in accordance with the rules of the 2015 Fiscal Responsibility Law.

“We remain committed to offering the best possible package to workers, within the context of the Fiscal Responsibility Law. Mr Speaker, acceding to the unions’ demands, of 25 percent advance, will cripple the country financially,” Mitchell said as he presented an EC$1.1 billion budget to Parliament.

“It is simply not feasible, given our current projected revenue stream, to meet these demands and, furthermore, to sustain them over the long term,” he told legislators.

Public servants, yesterday, vowed to remain off their jobs, despite the decision of the government to withdraw an application for an injunction, preventing them from embarking on industrial action in the ongoing dispute over the payment of pension and gratuity.

The workers have been staging work stoppages, since November 5, when the government said it could only offer a gratuity of two percent. But the unions say they will only accept a 25 percent offer, in keeping with the provisions of the Constitution.

Section 92 of the Grenada Constitution states “with respect to any pension benefits that were granted to any person before this section comes into operation, this shall be the law that was in force at the date on which those benefits were granted or any law in force at a later date that is not less favourable to that person.”

Prior to that provision, the 1958 Pension Act provided for public officers to receive a gratuity of 25 percent, after working in the public service for 33.3 years.

However, in 1983, the then People Revolutionary Government (PRG), which suspended the Constitution, approved the Pension Disqualification Law, which came into effect in 1985, following the 1984 general election. Negotiations were also held to reduce the number of years from 33.3 to 26.6 years a public service can serve before retirement.

Mitchell told Parliament that regional and international organisations have cautioned his administration that a pension program must be managed carefully, or Grenada runs the risk of undoing gains made over the years, especially in the area of public debt.

“Therefore, Mr Speaker, we must be fiscally prudent with our decisions or we run the risk of undoing the tremendous gains we have made in recent years, and losing considerable funding we have acquired, through proven fiscal discipline,” he said.

Mitchell also justified his government’s decision to instruct heads of departments to deduct from the salaries of workers, who had stayed away from their jobs.

“The issue of paying workers for the days on which industrial action was taken, is not just fiscally irresponsible, but also morally bankrupt and politically unwise. Therefore, Mr Speaker, the government cannot agree to such.

“Workers chose to withhold their labour, their unions should have a strike fund in place and should, therefore, be responsible for paying their lost wages. We fully agree that workers should be paid, just not by the government,” Mitchell said.


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