GOV’T Reinforces Rationale For Deferral Of 4% Wage Increase

PR The Government of Grenada is reinforcing the rationale for its proposed deferral of the 4% wage/salary increase due to  public officers for 2021. 

The increase will add $13.2 million to the public sector wage bill, at a time when the  Government is facing a significant drop in revenue, due to the economic impact of the  COVID-19 pandemic.  

In response to recent public pronouncements by one of the trade unions attempting to justify  the demand, Government outlines the five main reasons why the deferral is necessary.  

It is important to note that the Government did not initiate the buyback of GRENLEC. This  was mandated by a court ruling following legal proceedings initiated by WRB, based on the  provisions of the 1994 Share Purchase Agreement which allowed the company to claim  force majeure due to changes to the operational environment of the energy sector. 

Further, the money used for the GRENLEC repurchase was taken from allocations for  capital projects. This money was provided largely through grants and soft loan funding and  any attempt to use this for recurrent expenditure, will make the country ineligible for future  support of this nature. 

The fact that Government has been forced into this unplanned expenditure, at a time when  revenue earnings are lower than expected, further undermines its inability to manage a  larger wage bill at this time. 

The public should also know that moves were already being made to garnish Government’s  assets, both at home and abroad, which had the potential to affect Government’s ability to  pay salaries or conduct any business whatsoever. 

Additionally, given the level of pain and suffering being experienced by those who are  unemployed as a result of the pandemic, Government has the additional responsibility of  providing some measure of economic support for them.

The Government of Grenada recognises its obligation to honour the collective labour  agreement that provides for the wage/salary increase but the economic fallout from COVID 19, is putting a strain on the country’s coffers at this time and therefore provides justification  for the deferral.