Civil Service pay cuts passed into law

The
Legislative Assembly has voted into law a bill to reduce the salaries of civil
servants by 3.2 per cent, effective Thursday, 1 July.

The
Public Service Management (Amendment) Bill, presented by Deputy Governor
Donovan Ebanks, immediately and temporarily reduces civil service staff pay and
benefits. The law does not specify a date when the pay cuts will be reversed.

The
Civil Service Association earlier agreed to the salary cuts.

The
salary, benefits and other cuts within the Civil Service will save the government
up to $9 million, including $5.4 million in salary reductions, $3.1 million in
health-care costs, and $300,000 in the suspension of travel benefits for
overseas contracted staff, said Mr. Ebanks.

There
will also be reductions of 50 per cent to 75 per cent in overtime, temporary
relief, call-out allowances, vehicle upkeep and freight and recruitment
expenses. There will also be a temporary halt in entertainment allowances and
in laundry allowance for
uniform branches.

Mr.
Ebanks said the cuts
included a rollback of the 3.2 per cent cost of the last cost-of-living
adjustment awarded in July 2008. “It is a monumental and historic development
for these islands to find myself here having to roll salaries backward,” he
said.

“As
the 2010-2011 budget demonstrates, there can be no dispute – reversing the
government’s deficit position is a national imperative,” he added.

The
coming financial year’s budget forecasts an overall deficit of more than $31
million, following borrowings of $155 million.

“The
need for prudence and restraint in what we spend cannot be over-stressed,” Mr.
Ebanks said.

Amendments
were also made to the Public Service Pensions Law to deal with the calculation
of pensions payable to staff whose wages have been reduced.

The
amendments to the pensions law were introduced to ensure the civil service pay
cuts would “not negatively impact the pension entitlements and legitimate
expectations of both current and new retirees”, Mr. Ebanks said.

Neither
the contributions payable to the public service pension funds on behalf of
civil servants or the benefits payable to retired staff will be affected
negatively by the cuts.

However,
more cuts could lie ahead for the Civil Service following a review of four of
the government’s highest-spending departments.

Mr.
Ebanks said teams from the public and private sectors had reviewed the
Department of Tourism, the Public Works Department, Prison Department and
CINICO, which among them accounted for an eighth of overall government
expenditure, and presented a report in March.

He
thanked Jim O’Neill, managing director of Caledonian Bank, Wil Pineau, CEO of
the Chamber of Commerce; David Kirkaldy, president of Massive Equipment Rental;
and Colin Reid, chief operating officer of Bodden Holdings for helping to
identify savings of approximately $17 million within the four agencies.

Mr.
Ebanks said if similar savings could be found across the remaining seven-eighths
of government departments and agencies that could lead to a $100 million drop
in expenditure.

Some
steps recommended in those reviews have already been implemented or were under
consideration, Mr. Ebanks said, including the closure of some overseas Department
of Tourism offices and remote court appearances by video link for prisoners on
remand.

Legislators
also voted to amend the law to prevent performance-based remuneration of civil
servants from coming into force on 1 July this year, instead changing the
wording so that the Governor in Cabinet will name a future date for that
provision to come into effect.

That
provision would meant that pay raises for civil servants’ would depend on their
performance on the job, similar to the
private sector.

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2 COMMENTS

  1. 3.2 hurts alot… I hope this is the last of cuts, because with bills and children to feed, how would we be able to live without stress?

    It is time that Caymanians pull together and start charity programs, because this "London Bridge" is falling down and "those with the money" are looking out for their own selves.

    It is time we stop relying so much on "money" to solve our problems and become more self-sufficient without it. And we need to think about those who are less fortunate. We can only survive together, because apparently, the wealthy have their own groups and organizations – why can’t the common man or woman, working under their belts?

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  2. Are you kidding me??
    you can’t live with a 3.2% pay cut? You should be lucky that you still have a job.

    The government should have cut jobs and the LA members should have taken a 20% pay cut.

    3.2% really hurts…. try a 100%

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