Oneil Grant, president of the Jamaica Civil Service Association (JCSA), has served notice that spiralling inflation, fuelled by a rapidly devaluing currency, is likely to send trade unions scurrying back to the bargaining table with the Government.
Speaking at a Gleaner Editors' Forum at the company's North Street offices on Friday, Grant warned that runaway price increases are forcing trade unions representing public-sector workers to seek to renegotiate the wage freeze imposed under the memorandum of understanding (MoU) between the Government and the trade union movement.
"As it is now, we are very concerned because there has been a raft of price increases that has affected the workers, and we have initiated the discussions," Grant said.
requirement for imf deal
The Government and more than 80 per cent of public-sector workers signed a wage agreement for the 2012-2015 contract period in March, which means public-sector workers would not have received a wage increase in five years.
The a wage freeze was a precursor to Jamaica securing an agreement with the International Monetary Fund.
The agreement between the Government and the public-sector unions is central to reducing the wage bill to nine per cent of gross domestic product by 2015-16.
Grant noted that with the targets in the Heads of Agreement being primarily non-monetary, there was agreement that the missing of inflation target as it relates would trigger a renegotiation of wages for public-sector workers.
Finance Minister Dr Peter Phillips, while addressing an economic reform stakeholders conference at the Jamaica Conference Centre last week, said the country's inflation rate is lower than projected.
"I would point out that inflation, despite the increase, is still below the forecast range for the June quarter of two to three per cent. The outturn was actually 1.2 per cent," Phillips said.
Grant noted that when the MoU was signed on March 16, 2013, the dollar was lurking at about J$87 to US$1. Today, he said it has leapt to $102 to US$1.
"That, in itself, has implications for inflation and the impact that it is having on the workers," he stressed.
Added Grant: "We do understand that we are at the beginning of the partnership and some of these discussions in the past did not take place in the public sphere as we hope they don't, but in going forward, there are some things that are going to be impacted significantly on the workers."
He noted that the provisions of the MoU were a prelude to the social partnership aimed at achieving certain targets.