Daraine Luton, Senior Staff Reporter
WITH A trigger mechanism built into the heads of agreement between public-sector workers and Government, which would see parties returning to the bargaining table if inflation reaches 12.5 per cent, the Government says it has taken steps to engage the workers to prevent a re-look of the agreement.
"We hope that we will not reach that stage where the review is triggered," Horace Dalley, minister without portfolio in the finance ministry, said in the House of Representatives yesterday.
As a precondition to an agreement with the International Monetary Fund (IMF), the Government has entered into a three-year wage freeze with public-sector workers.
The heads of agreement, which underpins the wage freeze, contains a clause which says that if inflation exceeds the target by two per cent in a given year, a review of the agreement will be triggered.
Dalley said yesterday that the inflation target for the first year of the agreement is from 8.5 per cent to 10.5 per cent.
The Government has said to the IMF that inflation reached 9.7 per cent (year-on-year) in July 2013.
"Inflation has picked up in line with earlier projections in part due to the further depreciation of the exchange rate," the Government has said.
"The exchange rate has continued its gradual depreciation relative to the US dollar that started in late 2012 and amounted to 14 per cent (year-on-year) by end-August, which has helped limit the competitiveness gap that had opened up during previous years," the government communiqué added.
Oneil Grant, president of the Jamaica Civil Service Association, speaking at a Gleaner Editors' Forum at the company's North Street offices last month, warned that runaway price increases were forcing trade unions representing public-sector workers to seek to renegotiate the wage freeze imposed under the memorandum of understanding between the Government and the trade union movements.
"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.
Yesterday in Parliament, Opposition Spokesman on Finance Audley Shaw said public-sector workers, like other Jamaicans, were being subjected to unbearable inflation, caused mainly by the devaluation of the dollar.
He said that while the average inflation rate was 9.5 per cent, in reality, vulnerable groups were facing inflation rates as high as 20 per cent.