Monumental Rise in Wage Bill

Wed, 7 Aug 2013 Source: Kumi, Frank

—Cabinet Subcommittee Indicts FWSC

Following the implementation of the Single Spine Salary Structure (SSSS), the country saw a sudden rash of industrial actions by most labour unions—university lecturers, medical doctors, pharmacists, teachers etc.

Now that there seems to be a semblance of calm and harmony across the labour front, the country’s fiscal system seems to be floundering badly, with the SSSS being bruited about as a major culprit. In fact, it was to the amusement of many when President Mahama once admitted that the country’s “meat is now down to the bone.”

The government concedes that bulk of the country’s revenue generated is put into pay checks of public sector workers’ since the SSSS implementation. This according to the government threatens infrastructural and financial development of the country.

In spite of the incessant appeal from government to labour unions to be a bit more considerate in their demand for remuneration rise, recent development from the labour scene—UTAG’s current industrial action, GMA’s threat of strike—demonstrates implicit oblivion by workers to government’s plea. Halfway through the year, as a testimony of labour union’s relentless effort to raise the ante in wages, Trade Union Congress (TUC) released a tirade of press release against government for “adopting a hard-line position in its ongoing base-pay negotiation.”

It is not difficult to understand government’s “hard-line” position: any immediate increase in base pay could further exponentially severe the country’s fiscal woes. It is obvious the SSSS once used as a campaign pitch has morphed to be the government’s worst nightmare and possess the potential to be a persistent millstone around its neck. Recent widening of the country’s tax net—tax on condoms--has somewhat even been attributed to the SSSS.

Following the SSSS implementation, several revealing factors have sought to highlight why the SSSS ran into snags.

Shelving the Government White Paper on Single Spine Pay Policy (SSPP), November 2009, by negotiators on behalf of government could be tacked onto the list of these revealing factors that have the capacity to derail the SSSS. A recent report titled “Cabinet Sub-committee on Boycott of Pharmaceutical Services by Government and Hospital Pharmacists Association,” June 2013, contains a finding that “A number of administrative decisions were taken contrary to Government White Paper on SSPP.”

Market Premium (MP), according to the report was hastily implemented on a “wholesale” approach contrary to the White Paper on SSPP, therefore resulting in all manner of workers—drivers, clerks, labourers etc—benefiting from it. This error, without a shred of doubt, is a factor for the leap in the wage bill.

At present, the formula for calculating the Conversion difference (CD) for deserving public sector workers (eg. Pharmacists) are also alien to the White Paper on SSPP. The Pay Policy provides “…a Conversion Difference would be paid to an employee whose salary, prior to the implementation is higher than his entry point on the SSSS. This is to ensure that the employee is not made worse-off as a result of the implementation of the new Pay Policy.”

Per the White Paper, the proper formula that must be adopted for calculating the CD is: CD=Gross Salary of HSSS - Base Pay of SSSS. In an unfair attempt to preclude deserving health workers (nurses, pharmacists, doctors etc.) from enjoying the CD, the Fair Wages and Salary Commission (FWSC) unilaterally altered this formula and furtively calculated the CD as: CD=Gross Salary of HSSS – (Base Pay of SSSS + MP). Not only does this misstep by FWSC open a window for lawsuit against government, it also provides fertile grounds for sowing seeds of seamless labour unrest in the country.

In the light of the aforementioned revealing insights, it is in the right direction that the Committee with the sole purpose of calming the tide of labour agitations in the country made the following striking recommendations inter alia:

1.0. Government should admit that an error was made in allowing wholesale interim market premiums to be paid to workers in the first place.

2.0. Conversion Difference should be calculated and paid to public sector workers whose migration to the SSSS has negatively affected their salaries.

3.0. There should be cabinet oversight of the FWSC and its activities.

In summary, the SSSS has obviously been a major culprit in the astronomical rise in the country’s wage bill. Unbridled alien administrative decisions taken contrary to the White Paper on SSPP is definitely one of the fundamental bases for the incessant labour agitations in the country. The government must therefore take a radical decision in overhauling the activities of the FWSC.


Frank Kumi,

Member, Pharmaceutical Society of Ghana

Tamale Teaching Hospital

Contact: macfancy2g4@yahoo.com

Columnist: Kumi, Frank