Civil servants mull pay cuts

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More than 700 civil servants attended
an emergency meeting on Monday night to discuss possible wage cuts, a pension
suspension and health insurance contributions.

The civil servants were surveyed to
determine what measures they would be willing to take to help reduce government
deficit.

The Civil Service Association,
which called the meeting, has until today, Wednesday, 10 March, to give cost-cutting
proposals to the government, the association’s president James Watler said,
adding that it was unrealistic of the administration to expect detailed
responses by then.

“You do not push someone into a
corner and expect them to come up with concrete proposals, concrete responses
or answers, in such a short term,” said Mr. Watler after the meeting.

He said the government had not
provided civil servants with enough facts to enable them to come to a consensus
on what measures should be taken.

“We are not in a position to sit
down and tell government how to do their budget. That seems to be what is being
required of us. I have made that abundantly clear, we are not going there,” he
said.

Premier McKeeva Bush, who was
accompanied by Cabinet colleagues, addressed the audience at Mary Miller Hall at
the beginning of the three-and-a-half hour meeting and answered questions from
the floor.

He denied that the government was
proposing that civil servants in a $3,000-$4,499 wage bracket would be required
to pay 50 per cent of their health insurance, despite the circulation of an
inter-office memo from Financial Secretary Kenneth Jefferson stating that all
civil servants earning more than $3,000 would have to pay half their health insurance
premiums.

Mr. Bush said the government was
considering taking the entire issue of health insurance contributions off the
table.

He told the packed hall that any
cuts to public service salaries would have to be done voluntarily or by
legislation.

The premier also warned contracted
staff against suing the government if the terms of their contracts are changed,
referring to a case in Barbados in the 1990s in which the government was sued
for cutting civil service salaries. The government’s move was legal and the decision
was upheld by the Privy Council. “If you believe the state in any country
[doesn’t] have the authority above a contract, go ahead,” he said.

Responding to a suggestion that the
government introduce a two-per cent income tax, Mr. Bush told the audience that
his Cabinet was against implementing income tax and property tax.

The government officials left the
meeting early to enable civil servants to talk freely about the options before
them.

Mr. Bush, Mr. Jefferson and
Governor Duncan Taylor travelled to the UK Tuesday and are scheduled to meet
with the Foreign and Commonwealth Office Wednesday to discuss Cayman’s
financial situation.

Among the proposals discussed by
civil servants at the meeting was the purchase of the new government
administration building by the Pensions Board – an option ruled out by an
official from the board. Mr. Watler said a show of hands at the meeting for
support for that proposal resulted in only 40 people agreeing with it.

They also discussed the possibility
of unpaid leave for staff as an alternative to pay cuts. Mr. Watler said this
option could avoid an impact on staff pensions. “If you take a cut, your pension
is calculated on your last salary. Suppose tomorrow someone retires, it will
affect their overall carry home pension,” he said.

A proposed freeze on civil service
pensions was also not a popular option.

The Civil Service Association
president said the government was giving no guarantees that if public servants
agreed to a “triangle” of cuts, that it would help the financial situation in
the long term. “It is a salary cut, it’s 50 per cent pay for health care and
then there is also either 50 per cent pay on the pension or a cessation, or
both… If we go that route, we have asked what will happen. Will this help
bring the government out of the doldrums? No-one can give us a clear-cut answer,”
Mr. Watler said.

Deputy Governor Donovan Ebanks who
remained throughout the meeting, said he felt it was fruitful and that staff
had put forward constructive suggestions.

“There was a high level of maturity
and professionalism in terms of how the association is handling the interaction
between its members and the government and the public bodies,” he said.

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James Watler
Photo: Submitted
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4 COMMENTS

  1. Can someone from Barbados, someone who was there, inform us when Barbados cut the salaries of government workers in the 1990s did it only apply to citizens of Barbados, and not, as I have been led to believe to foreign workers on contract? Did Barbados not also have to pay every cent back to the Bajan citizens and have done so? Premier McKeeva Bush may be wrong, therefore, in the first instance and, at best, forgetful in the second.
    Contracts are surely a legally binding agreement between two parties? And neither party, State or otherwise, can change the terms and conditions of said contract mid contract without the mutual consent of both parties. Can a lawyer inform me if this is correct?
    Many thanks and, personally, I would prefer everyone on this island pays 1% income tax than civil servants be targeted to pay for successive Cayman Island governments’ and their senior managers in government departments’ mistakes. We can be team players, all living and working in the Cayman Islands, to reduce this budget deficit but there should be no scapegoats!

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  2. The theft suggested by the Cayman Islands Government cannot be allowed. Can you believe that a Government are suggesting this? I still expect to be told it is a prank.
    We need to fight this on all fronts. I have a contract. They intend to break it. That is illegal. Do not be afraid of their callous and cowardly attempts to stop you from challenging this by quoting ‘Barbados’. If all civil servants unite on this, then they cannot win. Why are the civil servants being asked to bail out the country whilst everyone else remains unaffected. The government are so scared to offend or upset the resident millionaires by introducing taxation and we have to pay for this cowardice. Join the real world! Introduce income tax, reduce the cost of imports for all and allow the poorest to live an easier life. Anything else would simply be an affront to morals, not to mention a blantant and miserable crime.

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  3. As I posted yesterday, the Barbados decision is here http://www.lawcourts.gov.bb/LawLibrary/events.asp?id=92. It had nothing to do with contract law and was related to items in their constitution. I think all civil servants realize their is waste in the Cayman Government, but to implement an 11th hour breach of contract instead of actually managing the civil service is clearly wrong headed and exposes the Cayman Government to very expensive legal action.

    As a very first action, I would allow civil servants to take unpaid leave. You could then offer a voluntary severance package to both expat and local civil servants. I think you would be surprised by the number who would accept the offer.

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  4. I would certainly consider a severance package and agree that it would be a popular idea. There is plenty of waste. People would have to learn to work smarter and more efficiently in order to begin to compete in a global environment without being reliant on an antiquated tax system.
    It seems like an idea that has simply not been thought through. Start again and create some proper policies, because this is ridiculous suggestion is already dead.

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