Business News of 2014-03-18

No hasty moves to cut jobs – TUC cautions

The Trades Union Congress (TUC) of Ghana has called on the government to conduct a scientific assessment and evaluation of the public sector before considering any calls for a major retrenchment exercise in a desperate move to reduce the huge wage bill.

According to the TUC, staff rationalisation is not as simple as it appears to many, adding that “If you agree to a public sector reform, it needs to be scientific to know how many people must go, how many people must be recruited at a point in time in every sector; the skills needed and also knowing whether they are adequate.”

Speaking in an interview with the Graphic Business at the weekend in reaction to call for job cuts within the public sector, the Secretary General of the TUC, Mr Kofi Asamoah, stated that “it could be possible that one sector will have more staff than needed, while others have less than expected”.

At the just-ended Graphic/Fidelity Bank Dialogue series in Accra on March 11, the Minority spokesperson and ranking member on Finance and Economy, Dr Anthony Akoto Osei suggested to the government to initiate retrenchment negotiations with labour unions in a bid to cut rising public sector wage bill.

Dr Akoto Osei, who was very candid with his suggestions said, “if I were the President, I will signal that every ministry show me about 20 per cent of retrenchment in 2015 and 2016”.

“Some negotiations for retrenchment must begin now, and I know the government is in discussion with Labour. The wage bill at almost GH¢9 billion cannot be sustained,” he further argued.

According to him, not the entire labour force in the public sector are active, hence the need for retrenchment.

“The truth is that most of us when we were at the ministries, we realise that at best, 40 per cent of the staff at the public sector are active,” he said.

“If the minister doesn’t do it, the deficit issue cannot come down and we will not be seen as credible”, he added.

This is where Dr Osei wants the government to expedite action on the redundancy phase of the public sector wage reforms.

The reforms include job cuts which government has not had the political will to execute, Dr Akoto alluded.

“In the single spine framework, retrenchment was part of the plan, but it has not been done and if it is not done soon, politically after 2014, you have lost it. As early as possible you implement it, so people get used to it. But it looks like we have lost it,” he said.

First, the ministry was supposed to do an assessment. They did not do so. It must be done, so we know government is credible.”

About the need for an assessment before the commencement of the whole exercise, Mr Asamoah shared similar sentiments saying that “if we do not do that scientific thing that started 10 years ago without result and we just sit on the fence to call for reduction in staff size it will not augur well for us”.

“It is possible the reduction might not be the solution to the wage bill and indeed, making reference to elsewhere, when companies have difficulties, they rush to lay off workers only to realise that the problems persist,” he added.

The TUC secretary general said such exercises “only end up that they do elimination by substitution where they end up recruiting new people only to realise they recruited more than expected”.

This is why he called for a proper overall assessment of the public sector to find out the real challenges and not jump in to say “let’s do staff reduction.”

Staff size and the wage bill

Mr Asamoah said the idea about the process of unifying the salary schemes of public sector workers dated back to 2005/2006 during the Kufuor regime where “we all saw the need to unify scales to do away with distortions and disparities in incomes and other related things in the public sector and also to attract skills into it”.

He acknowledged that “we have gone through a whole lot of processes and we acknowledge that it has resulted in a wage bill that is high. But we are also disputing the huge wage bill from a premise that the figures quoted now included arrears which would not normally be part of every year’s calculated wage bill”.

Mr Asamoah also reiterated labour’s view that the wage bill was not being managed efficiently, as there were a lot of ghost names on the government’s payroll saying, “each time one name is removed, they succeed in adding about four more names”.

According to the TUC general secretary, implementation of the pay policy had travelled too far with the major challenges resolved where everybody is now on the single spine and “we are now able to know the total number of people and how much it will cost.”

But the whole thing has to do with the efficient management of the wage bill. For us we think that the levels do not really represent the real figures of people working in the public sector”.

In addition to that, Mr Asamoah said recruitment was still ongoing in various public sector organisations that contributed to the swelling wage bill.

Vacancies in Public Sector

He said there are more vacancies in the public sector than it was being presented now.

Mr Asamoah said the health sector required more nurses, as well as medical staff and the police force also required more professionals for better law enforcement, just as there were many schools in the country without teachers.

He argued that there were many other sectors of the economy where staff were needed if the public sector must be brought to international standards.

Way forward

Mr Asamoah rather wondered what the government was doing to solve the huge unemployment situation in the country taking into consideration the growing number of unemployed youth.

“We are told that about 300,000 students coming out every year from the tertiary and other training institutions have no jobs and that is government’s responsibility,” he said.

He was of the view that, once these were done with the proper management of the wage bill, the country would be better off.

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