SECTORAL DEBATE 2010/2011
Presentation by
HONOURABLE PEARNEL CHARLES, CD, MP, JP Minister of Labour and Social Security
Tuesday, October 12, 2010
Gordon House, Kingston
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Introduction
Mr. Speaker, emanating from the Sectoral Debates last year was a consensus that the
global recession had impacted the Jamaican society in unprecedented ways. However,
I believe we have seen compelling evidence which indicate that the country, while not
totally out of the woods, has been stabilized and is now on a path towards economic
growth.
Mr. Speaker, in spite of the challenges, the social sector was adequately provided for
in the Budget. As the Prime Minister assured us in his presentation, all efforts were to
be made to ensure that education, health and social security would be a priority in
order to provide a cushion for the vulnerable groups in the society. As a result, my
Ministry - which is responsible for a significant part of that social sector - was able
not only to maintain existing support levels, but also to extend our reach in a number
of services so that more persons were captured under the social security programmes.
Through participatory dialogue with our traditional partners (employers and trade
unions) and other stakeholders, we have been able to maintain a relatively stable
industrial relations climate. While this remains our core function in the Labour
Division, we are also engaged in training, job creation and marketing of skills
overseas. Human capital development has to be a major objective of the Ministry in
these times if more workers are to be properly positioned to compete in the global
marketplace.
Mr. Speaker, throughout the year, we experienced significant challenges on the
industrial relations front. Among public sector workers there have been demands for
improvement in their working conditions. The Government recognizes the importance
of this and, in most instances, their demands are legitimate. Nevertheless, the
economic realities of the country must also be recognized.
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As responsible public servants, there has to be sensitivity and understanding of the
plight of the Government. The Government is not intransigent in believing that there
will be no changes, but asks that the demands be made within the confines of the
current economic situation. Unless this is so, it will only become worse for everyone
concerned.
In most of the disputes in which the Ministry has offered its conciliatory services, the
issues were satisfactorily resolved although only the major ones were reported on
nationally. The Ministry continues to build its capacity for intervention and
conciliation and I want to congratulate the members of staff who continue to work
diligently, even at great personal sacrifice, to deal with these disputes.
Overseas Employment
Mr. Speaker, the global recession has continued to significantly impact the overseas
employment programme. The negative effect of the economic recession in the United
States has resulted in a decline in the number of workers for both the Farm Work and
Hospitality Programmes during the first part of the 2009/2010 season. The Farm
Work Programme reflected a decrease in the USA by 7.8 per cent while the
hospitality programme declined by 53 per cent in comparison to the 2008/2009
season.
In terms of the Canadian programme, Mr. Speaker, there was relative stability as the
programme experienced a decline of only 3 per cent. This resulted from the
downsizing of several farms during the latter part of the 2009/2010 financial year.
Five thousand, eight hundred and sixty-two (5,862) workers participated in the
programme in the last financial year, compared with 6,053 in the previous year. Mr.
Speaker, in spite of the challenges imposed by the difficult international economic
environment, the Ministry was able to place more than 10,000 Jamaican workers in
employment opportunities both in the USA and Canada.
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Remittances
Mr. Speaker, we cannot overemphasize the importance of remittances to the Jamaican
economy. According to BOJ statistics, in 2009/2010, total remittances to the country
were US$2.1 B compared to US$2.3B in 2008/2009, a slight decline of 9.5 per cent.
Remittances from the US Farm Work and Hospitality programmes fell from
US$9.3M to US$6.1M, largely due to the decline in the number of workers who
participated in the Hospitality Programme. Remittances from the Canadian
Programme were quite stable with a marginal decline of 2.9 percent from Can$12M
in 2008/2009 to Can. $11.7M in 2009/2010.
Prospects for the current financial year are extremely encouraging. Already we are
witnessing an increase in the number of employment opportunities under the US
Hospitality Programme. Many of the traditional employers are now experiencing an
upturn in economic activities and are recalling workers who were not recalled for the
last two seasons.
The US Farm Work programme is also showing signs of growth as new employers
are participating in the programme. Two months ago, a new employer in California
engaged 300 workers in the citrus industry - an area which we have been trying to
exploit for some time now.
In Canada, there are strong indications of a rebirth in the tobacco industry. More than
160 workers were recalled to several tobacco farms and are being processed for
dispatch as we speak. New employers are also coming on stream in the seafood
industry in New Brunswick and Nova Scotia. Workers are already being dispatched
to growers of strawberries and other fruits in provinces such as Nova Scotia and
Ontario.
Non-traditional employment opportunities are also poised for growth as the Ministry
realizes the fruits of partnerships with several training institutions in Canada. In June
2009, 18 Jamaicans left for Red River College in Manitoba where they completed
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training and were awarded Red Seal Certification as chefs. These workers are all
currently employed in Canada. In January, 14 heavy duty mechanics were dispatched
to the College of North Atlantic in Newfoundland and 13 auto service technicians
were sent to Red River Col1ege. These trainees have completed training in their
respective disciplines, obtained their Red Seal Certification and are employed in
Canada. It must be understood, that securing employment depends on successful
completion of courses to gain Canadian certification.
Deaths of Farm-workers
Mr. Speaker, I wish to take this opportunity to express sympathies to the families of
two ofour farm workers. who died recently in Ontario, Canada. They are 44 year-old
Ralston White from Preddie. Manchester and 36 year-old Mr. Paul Roach of Milk
River, Clarendon.
According to the autopsies, both Mr. White and Mr. Roach died as a result of
environmental suffocation. The circumstances surrounding the accident are still being
investigated by the Ontario Provincial Police as wen as the Ontario Ministry of
Labour Health and Safety Division and our Liaison Service.
The families have been compensated in the sum of C$15,OOO from the insurance plan
operated by the Jamaican Liaison Service. Each fami1y has received an initial lump
sum payment which is the maximum payable under the Workmen Safety and
Insurance Scheme. In addition, spouses and children will receive a monthly
al1owance. The spouse will receive the monthly payment until death and the children
will receive until age) 9. The Children will receive payment up to age 30 if they are
in university. This represents a reasonable package.
The Ministry continues to be proactive and so through our Liaison Service in Canada
we are conducting on-going inspections to reduce and where possible, prevent work
place fatalities and accidents.
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Mr. Speaker, we take a keen interest in the welfare of Jamaican workers engaged
overseas. We have established a Family Services Unit in the Ministry which is a
social intervention programme designed to strengthen family ties while spouses are
away. A major focus of this programme is to ensure that earnings are used for the
maintenance and development of families. Since the inception of the Unit two years
ago, over 6,000 families have benefited. This has resulted in increased remittances to
families, improved school attendance and involvement in entrepreneurial activities.
Mr. Speaker, we are also taking steps to prevent migrant workers from returning
home without adequate provisions for their retirement after many years of
employment. We have, therefore, put in place the necessary arrangements to facilitate
their participation in the National Insurance Scheme. We intend to do a similar
exercise for their participation in the National Housing Trust (NHT) and Health
Insurance coverage.
Industrial Relations
Mr. Speaker, the year 2009/2010 has been somewhat challenging for the Ministry as
it pursued its mandate of promoting and maintaining industrial harmony at the
workplace through tripartite dialogue. With the advent of the economic recession and
its impact on Government's wage policy, there have been a number of difficult
disputes, particularly in the public sector. The financial meltdown has also affected
the private sector. As you are aware Mr. Speaker, the faU-out in this sector has led to
significant loss ofjobs, productivity and revenue, especially in the bauxite Industry.
Mr. Speaker, the Ministry maintains a record of the number of redundancies. In fact,
the Employment Termination and Redundancy Payments Act (ETRPA) were recently
amended to require all employers to report to the Ministry all proposed as well as
reported redundancies. Mr. Speaker, we consider this to be of vital importance as we
want to ensure that redundancies are carried out in a manner consistent with the
provisions of the law. Workers must receive what they are entitled to. The law is
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there to protect workers as well as employers because, in the long run, when issues of
separation are not dealt with properly, redress is usually sought in court at great
expense to all parties. So this Jaw is important.
I must report to this Honourable House that the response to the requirements of the
law has been satisfactory so far. Mr. Speaker, since July 2008 and up to September
23,2010, we have recorded 22,000 cases of redundancies, representing unionized and
non·unionized workers. I now present to you the statistics of job losses in the various
sectors as officiaJly reported to the Ministry.
• In the Manufacturing Sector, 36 companies reported a total of619
redundancies.
• In Financing, Insurance, Real Estate and Business Services, 55 companies
reported a total of 990 job losses.
• In the Community, Social and Personal Services sector, 40 companies
reported 586 redundancies.
• For Restaurant Services, 18 companies laid off 179 workers.
• In the Retail Services sector, 50 companies reported 894 job losses.
• The Hotel Services sector reported 1,501 redundancies by 46 companies.
• In Communication, 13 companies reported 1,099 redundancies.
• In the Transportation and Storage Sector, there were 3,412 redundancies
from 33 companies. The largest number of casualties occurred at Air Jamaica
with 2,535 during the recent winding·down operations.
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• The Agricultural Sector was where the bulk of the redundancies occurred - a
total of 8, 975 by 17 companies. The sugar companies alone, arising from the
divestment exercise, reported over 7,000 redundancies.
• Electricity, Gas and Water reported 244 redundancies from six companies.
• In the Mining Sector, there were 3,253 redundancies reported by seven
companies, with Windalco, Alpart and Alcoa-Hatch accounting for the
majority ofjob losses.
• In the Education Sector, six companies reported 66 job losses.
• The Construction Sector reported 133 job losses from seven companies.
Mr. Speaker, the Ministry continues to monitor companies closely to ensure
compliance with the ETRP A. And we consider this legislation so important that we
decided to insert a new section into the Act. I want to remind employers that there are
stiff penalties for non-compliance.
Mr. Speaker, the Act now requires employers to submit a written statement of
calculations of redundancy to employees. Failure to provide this statement results in a
fine of $250,000 - up from the paltry amount of $100. Mr. Speaker, the law also
requires the company to submit to the Ministry the effective date of dismissal; name
and address of employees; the amount payable to employees; the name, description
and type of employee's post, membership in union and name of union, where
applicable. This information must be submitted within 21 days from the date of
decision for redundancy or dismissal. The penalty for non-compliance is $250,000 or
imprisonment of 3 months.
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Polygraph Testing
Mr. Speaker, as we seek to level the playing field for Labour and Management we are
once again faced with new complaints. These complaints are not of the conventional
types which relate to breaches of the Labour Laws, but are more of a social nature
which needs an alternative dispute resolution mechanism instead of conciliatory
process. Mr. Speaker, the Ministry has been receiving reports that some employers
are requiring that employees submit to polygraph testing.
Workers have been complaining that their rights are being violated due to the taking
of this test. The employees have also complained that the results of these tests have
been utilized as a basis for their dismissal or other disciplinary action. Some
employees have also complained that they have agreed to polygraph testing out of
fear of losing their jobs or being otherwise penalized as the result of a refusal to take
such tests.
Currently Mr. Speaker, there is no statute in Jamaica that prohibits the use of
polygraph testing as a basis for granting, continuing or terminating employment.
Additionally, there is no provision which compels a worker to submit himself to
polygraph testing. At the same time, there have been increasing concerns about the
credibility of polygraph-test results and there is a strong possibility that employers
who rely solely on the results of polygraph tests as the basis for dismissing employees
might not be able to successfully defend a wrongful dismissal suit.
Mr. Speaker, if you employ a group of workers for five, six, seven or eight years, and
then come Monday morning, everybody has to take a polygraph test to stay on the
job, I cannot support you on this action. But, if you tell me that you are going to
employ some people next week and a standard that you are setting is that they must
convince you, through a polygraph test that they are the right employees that you
need, then I can discuss that with you.
Mr. Speaker, this Ministry, in the 2010/2011 fiscal year, will be carefully reviewing
this issue to make a policy decision as to whether legislative provisions should be
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introduced to regulate polygraph testing at the workplace. This is in an effort to
maintain a more harmonious worker management relationship. At this point, Mr.
Speaker, I am making a special appeal to Management and Labour to work together.
You have to co-exist and lack of trust is not conducive to good worker-management
relations. Initiatives at the local level to increase productivity and reasonable sharing
of the gains could go a far way towards improving morale and avoid some of the
disputes reaching the Ministry.
Occupational Safety and Health
Mr. Speaker, the Ministry continues to put in place strategies to bring the
Occupational Safety and Health Programme to international standards. We continue
to pursue a national programme to link productivity with a safe and healthy working
environment. Some of the strategies being pursued include:
• Increasing the span of workplaces that are monitored and inspected on
a regular basis to include agricultural undertakings, offices, hotels, and
garages.
• Expansion of the Voluntary Compliance Programme.
• Accelerating the process for the enactment of the new Occupational
Safety and Health Act.
The National Workplace Policy on HIV&AIDS
HIV &AIDS will continue to get the kind of attention and support needed to prevent
the spread of the disease, stigma and discrimination at the workplace. This year, the
National Workplace Policy on HIV &AIDS examined by the Joint Select Committee
was approved by this Honourable House in February, 2010. We await the
consideration by the Senate. This policy will provide a foundation for the legal
framework on HIV/AIDS at the workplace. We are grateful to USAID for funding
the HIV IAIDS Voluntary Compliance Programme (VCP) to the tune of US$76,OOO.
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Labour Market Study
Mr. Speaker, the number of graduates leaving tertiary institutions each year whose
training never seem to accomplish any real fit between the demands of the job market
and the courses pursued, is of growing concern to the Ministry. A number of students
seem to be pursuing subjects that are easy to negotiate leaving gaps in subjects and
skills which are more challenging, such as Mathematics. What this has created, Mr.
Speaker is a "masking" or camouflaging of the employment situation in Jamaica, in
that jobs may be available in different areas of the labour market, but students do not
have the specific skills for those openings. So, you see there has to be a different
approach to career guidance and the global availability of jobs must be used to guide
career path.
I recently commissioned a study to determine the demand for and supply of skilled
workers in Jamaica. The field work was conducted between March and July, 2009.
The sample covered six education and training institutions and 303 employers in 11
major industries. The Study attempted to identify:
• Areas ofactual and potential growth in employment;
• Gaps in the labour force as it relates to skilled labour;
• Changes and anticipated changes in the demand for skilled workers;
• The extent to which migrant skilled workers are being employed at the
expense of Jamaicans; and
• Employment opportunities for persons with disabilities.
Areas of actual and potential growth in employment are found mainly in the
Agricultural, Manufacturing, and Wholesale and Retail sectors. According to the
survey, the types of skills that are in high demand include customer service, computer
technology and sales. Several skil1 gaps were identified in the labour market which
includes Nursing, Practical Nursing, Computer Technology, Mechanical Engineering
and Psychology.
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The anticipated changes in demand for skilled workers over the next five years
include an increase in demand for persons with Levels 2 and 3 vocational
certifications. It has been noted that there is a shortage of Instructors to teach Metal
Engineering at levels 4 and 5. At the tertiary level, it is forecasted that there will be an
increase in demand for persons with Bachelor's and Master's degrees who have
managerial and supervisory skills. In addition, it is anticipated that there will be an
increase in demand for persons in the Professional, Senior Official and Technician
categories such as Audiologists, Speech Therapists, Web Designers, Programmers,
Physics Engineers and Surgical Technologists.
Only 6 per cent of the employers indicated that they employed foreign workers which
suggest that expatriates were not being employed at the expense of Jamaicans. In
relation to persons with disabilities, 21 per cent of the employers reported that they
had one such person in their organization.
Sharing with Stakeholders
This information will be shared with labour market stakeholders with a view to assist
with policy formulation as it relates to career and educational planning. The Ministry
plans to share the findings of the Labour Market Study through a series of sessions
with Guidance Counselors in secondary schools and with Administrators in tertiary
institutions island wide in the current financial year.
In fact Mr. Speaker, the first of such workshops will be held in November 201 O. This
workshop will target primarily Guidance Officers from the Ministry of Education. It
will be a training of trainers' workshop where the Guidance Officers will then train
the Guidance Counsellors in Secondary, All-Age and Primary and Junior High
schools islandwide.
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Flexible Work Arrangements
Mr. Speaker, I am pleased to announce that significant strides have been made in our
effort to implement flexible work arrangements in Jamaica. The Joint Select
Committee completed its deliberations and submitted its report to Parliament In
January 2010. This report has been approved by both Houses ofParliament.
The process to amend restrictive provisions in legislations which are contrary to the
principles of flexible work arrangements has now commenced. Mr. Speaker, we hope
to complete the process in this financial year.
Productivity Improvement
Mr. Speaker, historically Jamaica has been a low productivity country. The
Government and the Ministry of Labour and Social Security have long accepted the
fact that Jamaica's productivity record over many decades must be reversed in order
for us to achieve meaningful economic growth, create decent jobs, alleviate poverty
and resolve our balance ofpayments problems.
The alarming fact is that "Total Factor Productivity" in Jamaica has declined by 1.08
per cent per year between 1982 and 2008. By comparison, the Total Factor
Productivity of Trinidad and Tobago rose by 1.79 per cent, while in St. Lucia it
increased by 1.14 per cent over the same period. This clearly suggests that we have
failed to efficiently optimise the use of our resources namely labour, capital, land,
material, energy and information.
The issue of productivity is complex and presents many challenges. Such complexity
is born out of the fact that productivity is dependent on the collaboration of labour
and capital for the efficient production of goods and the provision of services. The
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involvement of Government in delivering public goods and services in an efficient
and timely manner is also a key component.
It has been reported that 75 per cent of Jamaican Companies have a difficulty in
finding workers with good technical skills and 66 per cent reported that most workers
lack basic skills. Jamaica's productivity is therefore hampered by a shortage of
workers with the appropriate technical skills for the kind of innovation and creativity
that is necessary. In this globalised environment, that is unacceptable. The objective
of the workforce must be "How can this job be performed better?" and not "How am I
supposed to do this job?"
We also require visionary management that understands that human resources are the
most critical ingredient in facilitating productivity and that new methods, techniques
and products must be explored. Low work ethic and worker disfranchisement are
barriers to improved productivity. We must tum Jamaica into a "Productivity
Improvement Nation" and one in which the fruits of productivity increases are
equitably distributed. We need a national crusade for productivity improvement.
The Jamaica Productivity Centre, the national organization mandated to promote and
facilitate sustained national productivity growth is poised to assist the process. It will
provide databases with both local and international benchmarking and best practice
information and analysis to allow public and private sector improvement in
productivity performance. The Centre will produce and use various combinations of
presentations, publications, videos, radio programmes and newspaper articles to
support its efforts to build a productivity conscious nation. What is therefore required
is the willingness of the social partners to join in this thrust.
I therefore call on employers, workers and their trade unions, the media, educational
and training institutions and all other well intentioned Jamaicans to join in this
crusade to improve and increase national productivity ifour nation is to survive in
these challenging times.
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This Parliament and other stakeholders must embark on this complex and difficult
journey if Jamaica is to have sustainable social and economic development.
Minimum Wage Advisory Commission
Mr. Speaker, I now tum to the review of the National Minimum Wage and the
Minimum Wage for Industrial Security Guards. I have noted concerns about the delay
in the implementation of increases to these wage rates as recommended by the
Commission.
There are several factors that must be taken into account in determining adjustments
in the minimum wages. There must be a balance between the increase being
considered and the consequences of such an increase. Given the current state of the
economy, it is strongly felt that any increases at this time could result in a reduction
in the number ofhours worked and, ultimately, job losses.
The Members of the Minimum Wage Advisory Commission in their deliberations
noted that the majority of participants at the consultation exercises expressed the
desire for a Study to be undertaken to determine what constitutes a livable wage and
in their report they have made that recommendation.
Mr. Speaker, I have commissioned this Study 'To determine what constitutes a
livable wage'. The results of this Study wiH be used to inform us as to the way
forward. Mr. Speaker, I propose that we wait for the completion of this Study before
implementing any further adjustments in the minimum wage rates. The Study is
projected to be completed by March 2011.
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The International Programme for the Elimination of Child Labour
Mr. Speaker, in February 2009, the Government of Jamaica, in collaboration with the
European Union launched the project Tackling Child Labour Through Education
(TACKLE).
Since that time, there has been a series of consultations across the island to assess the
implementation and enforcement machinery to combat child labour in Jamaica.
Another series of consultations are due to be undertaken to review the legislative
framework to address this phenomenon.
Sports is also being used as one avenue to prevent child labour. In this regard,
mentorship and football clinics were held in certain inner city communities of
Kingston, Spanish Town and Montego Bay during the summer. Three hundred
children ages 12 to 16 are targeted to participate in these clinics. Over 1000 adults
have been sensitized on the detrimental impact of child labour. Through these clinics,
we have achieved some degree of capacity building for teachers, students and parents
to combat child labour.
The Programme of Advancement Through Health and Education
(PATH)
Mr. Speaker, I tum now to the Programme of Advancement through Health and
Education (PATH) which continues to be the flagship social assistance programme of
the Government of Jamaica through its investment in human capital.
As at August, the number of persons benefiting stands at approximately 350,000.
This represents an increase of over 30 per cent over the number registered in April of
2009. Within this financial year, the programme is slated to achieve its goal of
registering 360,000 beneficiaries.
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PATH Focuses On Children
Mr. Speaker, PATH is designed to help protect the most vulnerable and in need in the
society and we know that if one is healthy and educated, then the chance of that
person living in poverty decreases significantly. The Programme seeks to break the
intergenerational poverty cycle through a sustained emphasis on children and youth in
poor households. In fact, over 75 per cent of the beneficiaries on PATH are children.
Mr. Speaker, there seems to be some misunderstandings about PATH. The
programme targets the most vulnerable within specific categories, poor children, poor
elderly, poor persons with disabilities, poor pregnant and poor breastfeeding women.
Persons who are in the economically active age group are not targeted. So the man or
woman who is 27 years old and physically able to do work will not be accommodated
under PATH. These persons should not be on social welfare, we must provide them
with the necessary support needed such as training, grants or soft loans so that they
can enter the labour market.
Some persons may tell you that they have been taken off PATH. This is not so.
Persons are only taken off if they die, migrate or in the case of children, they graduate
from high school. However, we are constantly monitoring the programme to
maintain its integrity and occasionally we will find an NIS pensioner who is in receipt
of PATH, or someone who has registered in two different names. We cannot have
one person registered twice, we have to remove one. If you are in receipt of a
pension you are not eligible for PATH but the other members of your household can
still benefit.
Adjustments to make PATH more responsive
Mr. Speaker, over the past year the challenges brought about by the recession has
affected all of us. As a result, we have increased benefits to all beneficiaries under the
programme. This year approximately $48 has been provided, an increase of 25 per
cent over last year's allocation. Mr. Speaker, there is no question that the programme
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is meeting performance standards. Parents are sending their children to school more
than the 85 per cent of the required days per month.
Some families, however, do not meet the conditionality established for the
programme, and should have their benefit suspended. The Ministry, in keeping with
international standards has introduced a minimum social protection floor whereby a
minimum of J$400 per month per beneficiary is paid instead of suspending the entire
benefit.
Mr. Speaker, there is often complaint about the length of time that it takes to be
registered on the programme. In response to this problem, a new Management
Information System has been introduced. Clients are now advised immediately of
their status upon application at the parish level. There is also an Appeals process for
those persons who believe their applications need to be reviewed.
PATH addresses needs of the Disabled and Elderly Poor
The Government has secured a Grant of US$2.6M from the Japanese Government
and has embarked on an aggressive islandwide campaign to register disabled and
elderly poor on PATH. Mr. Speaker, we have found that many persons in these
categories who have not registered for PATH are unable to travel to the Parish
Offices and have no form of support system to help them. Many of these persons are
asset rich but income poor.
Through this intervention, it is hoped that an additional 10,000 poor elderly and
disabled persons will receive a PATH benefit.
Mr. Speaker, I would like to pubJic1y thank the Government and people of Japan for
their support and wish to also thank the World Bank, which was instrumental in
securing this Grant for the Government of Jamaica.
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Expansion of the Steps to Work and Special Youth Employment and Training (SYEAT) Programme
Mr. Speaker, welfare cannot and will never be a way out of poverty. However we
believe that through programmes like PATH, with its strong emphasis on Human
Capital Development, poor families will be better able to break the poverty cycle and
provide a sustained livelihood for the generations to come. In this regard, we will be
expanding our efforts to ensure that working-age members of poor households are
provided with the opportunities to seek and retain employment through the Steps to
Work Programme.
The experience of the first six (6) pilot parishes in the last financial year has resulted
in over 3,200 persons being provided with training opportunities in order to enhance
their employability. We have also forged strong partnerships with other agencies
such as HEART Trust, the National Youth Service, the Jamaica Business
Development Corporation and the Jamaican Foundation for Life Long Learning.
These partnerships have allowed clients in PATH households to better access the
services that they provide at no cost. This year, over 5,000 PATH household members
are being targeted.
Mr. Speaker, the Ministry also has responsibility for the integration of our youths into
the Labour Market. The Ministry in 2008 examined its mandate and instituted the
Special Youth Employment and Training (SYEA T) Programme. The Programme
targets young people in the age range 18 to 25 years giving them access to the job
market through strategic partnership with the private sector. It also provides them
with valuable job experience and so enables them to be equipped to advance in their
careers.
Since inception, the SYEAT programme has registered over 5,000 persons and it is
anticipated that we will be able to register an additional 2,500. J$37M has been
allocated in this year's budget to assist in delivering the required training and
placement services for youths who come to the Ministry for assistance.
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Of the number registered, over 50 per cent have completed their HEART Level
I Certification making them employable. An active programme of job placement is
on-going and the partnership with the private sector has enabled us to access jobs for
some.
Although challenging, the SYEA T programme has measured success in building
sustainable relationships with the private sector, ensuring that the clients that are
served are able to access the opportunities as they arise.
We want to take this opportunity to thank the employers who have been participating
in this Programme and for giving our youths a second chance, one that they would not
have had under normal circumstances. Successes recorded by these trainees are
significant as they serve to motivate and encourage other youths to participate in the
Programme. This has been as a result of employers believing in them and giving
them the opportunity to advance.
The Ministry continues to be committed to the development of the youths, ensuring
that they can secure for themselves a livelihood that can advance their lives and the
lives of their families. As such we will continue to invest in the young and their
future as it is known that this will ensure a better Jamaica for alL
PATH as a Vehicle for Educational Advancement
Since 2009, the Government has introduced a new benefit for persons living in PATH
households. Children who have graduated from high school and are matriculating to
post secondary institutions are now eligible for a J$15,OOOgrant. This is an incentive
to continue their education. J$IOM has been paid out to approximately 700 students
last year. This financial year, the Ministry has budgeted J$45M for grants. Over 400
applications have already been processed.
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PATn Achievements
This year, the Ministry was pleased to acknowledge the over 100 students who met
the criteria for selection as top achievers with passes of 8 subjects or over in CSEC
examinations. Some with as many as 11 subjects with distinctions. The achievements
of these students reflect not only the support of Government through PATH, but are a
powerful indication of the investment of mothers and fathers in their children's
future. This is a symbol of the pride and dignity of the true Jamaican spirit which
shines despite their socioeconomic status.
The National Insurance Scheme & Fund
Mr. Speaker, I turn now to the National Insurance Scheme (NIS) which continues to
be a major component of the Government's Social Protection Programme. Social
Insurance systems which provide a financial safety net for the elderly, such as the
NIS, are under increasing pressures worldwide. Major demographic changes caused
mainly by rising life expectancy, improved health care and lower birth rates have
resulted in significant growth in the proportion of older persons in the populations.
At present, the NIS provides benefits to approximately 95,000 pensioners. The
projection is that this number will increase substantially in the coming years. The
latest Actuarial Evaluation shows that by 2015, the number of pensioners is projected
to be 121,000 and approximately 200,000 by 2035. According to STA TIN, Jamaica's
current population of persons 60 years and over is estimated at 298,000 or
approximately 11 per cent of total population. It is projected that by the year 2025 this
number wiJ] increase to approximately 472,000 or 14.5 per cent of total popUlation,
according to data from the Economic Commission for Latin America and the
Caribbean (ECLAC).
A person who is currently 60 years can expect to live for another 19 years in the case
of a man and 22 years in the case of a woman. Against this background, the payout to
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NIS pensioners will continue to increase over time due to the maturity of the Scheme
and the ageing of the population.
The impact of the "baby boomer" phenomenon, which led to an increase in the birth
rate in the 1940's is now evident in the fact that more is being paid for benefits than is
being collected in contributions. In the last financial year (2009/2010), we collected
approximately $5.51 B in contributions and paid out $9.16B in benefits, a net deficit
of $3.65B. As a result, we have had to depend more on investment income to close
the gap.
For the financial year 20091201 0, the National Insurance Fund (NIF) earned net
investment income of $7.44B, up from $6.28B in the previous year. This shows an
improvement in the performance of our investment portfolio. This also represents an
increase of approximately 19 per cent in investment income, despite the reduction of
interest income as a result of the Jamaica Debt Exchange (JDX) programme.
The growing reliance on investment income means that the NIS will have to pursue
more aggressive investment strategies for growth and profitability in the pension
Fund, while ensuring prudence. This means that diversification of the present mix of
investments will be important in the changing economic environment. The total value
of the Fund as at March 31, 2010 was $62B, moving from $53 B at the end of March
2009. This represents year to year growth of approximately 18 per cent in the net
assets of the Fund.
Mr. Speaker, let me commend the National Insurance Board and Secretariat for their
prudent management ofthe Fund, particularly during the past year.
Ensuring Viability and Sustain ability
Mr. Speaker, we have introduced several reforms to ensure the long term
sustainability of the Scheme, while maintaining meaningful and relevant benefits for
our pensioners. One such measure was to lift the NIS Insurable Wage Ceiling (IWC)
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to $1 M per annum. The IWC was last increased 7 years ago in October 2003 from
$250,000 to $500,000. The new IWC of$IM per annum became effective on August
2,2010.
The contribution structure reflects an employee deduction of 2 per cent of income for
the National Insurance Fund (NIF), and 0.5 per cent of income for the National
Health Fund (NHF). These contributions are matched by the employer. The lifting of
the IWC will, therefore, provide additional revenue to both the NIF and the NHF. The
additional contributions to be gained will increase the pool of funds to be invested,
and will help to ensure that pensioners are provided with better benefits in the future.
We have also increased the flat rate contribution made by Domestic Workers,
Voluntary Contributors and Self-Employed persons from $20 to $50 per week. The
method by which Members of Parliament and Jamaica Defence Force soldiers
contribute to the NIS has also been changed. Instead of contributing at the Flat Rate,
they will now contribute to the Scheme at the same rate as other employed persons
through payroll deductions.
Mr. Speaker, another major reform of the NIS which will be addressed is the disparity
in the qualifying age to receive the NIS retirement benefits for females and males.
This anomaly has persisted for too long. Currently, females and males qualifY to
receive their NIS retirement benefit at different ages, 60 for females and 65 for males.
Cabinet has approved the unification of the NIS retirement age to allow both females
and males to receive the benefit at age 65.
The female retirement age will be gradually adjusted over five years, commencing
January 20 II. This will ensure that women who are closer to the existing retirement
age of 60 years will not be required to wait the full five years to receive their benefit.
The adjustment of the qualifYing age for receiving benefits is one of the major reform
measures that are being implemented in social security systems worldwide to address
the effects of the changing demographics.
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Another major adjustment is the substantial increases in the levels of NIS benefits
since July 1,2010. These benefits were last increased in April 2008. Earlier this year,
I provided details to this Honourable House about the ranges of these increases. As a
result of these increases, approximately $11 B will be spent on benefits this year,
compared to $9B last year.
Pensioners will be pleased to also know that the annual renewable benefits under the
NIGOLD Health Plan have been improved. This will see increased limits for
Prescription Drugs, Diagnostic Services and Dental & Optical Services. Mr. Speaker,
in order to safeguard and protect the integrity of the NIS, we have embarked on a
special project to recertify our pensioners. The main objective of this exercise is to
minimize or prevent leakages. Our pensioners and their agents can therefore expect to
be visited by officers of the Ministry.
All pensioners will be required to register with the Electoral Office of Jamaica in
order to receive their new NIGOLD Health Cards. These cards will be used to access
NIGOLD benefits as of April 20 II, and will also serve as identification cards for our
pensioners.
Mr. Speaker, the Honourable Prime Minister observed in his Budget presentation last
year that the Fund was in a precarious position and was likely to become bankrupt if
certain corrective measures were not taken. The Actuaries have advised that the
reforms that have been introduced will ensure the viability and sustainability of the
Fund up to 2035. Mr. Speaker, this is a demonstration of vision, responsibility and
prudence.
Non-Compliance
Mr. Speaker, the effect of these reforms could be nullified if compliance is not at a
satisfactory level. Recently there have been a lot of discussions about funds not being
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remitted to the NIS. In last week's Public Accounts Committee (PAC) meeting, the
Sugar Company of Jamaica was cited as owing J$430M to the NIS. This amount
represented an accumulation of non-remittance ofNIS contributions since 1997.
Since this government assumed office, it became clear that non performing
government entities could no longer continue to be a burden on the budget, hence the
policy of divestment. At the first meeting of the Cabinet after assuming office in
2007, upon close examination, it was decided that in order to tidy up the mess that
persisted for many years the government would assume the indebtedness of the SCJ
to the NIS.
Mr. Speaker, it is unfortunate that a bad situation persisted for so long without the
previous administration taking the required steps to address the situation. We were
bold enough to take the necessary steps and put in place arrangements to protect sugar
workers of this country.
It is to be noted, Mr. Speaker, that most of the sugar workers are elderly persons who
have been working in the sector for many years and are now approaching retirement.
The decision of the Government to assume the indebtedness of the SCJ is to protect
the interest of these workers.
I want to announce Mr. Speaker, that the sugar workers who have contributed to the
NIS are covered because of the action of this Government. So I would ask that they
check with the NIS offices island wide to find out their status within the scheme.
Taking Non-Compliant Employers to Court
Mr. Speaker, heavy weather has also been made of the fact that some employers have
been neglectful in paying over NIS contributions which have been deducted from
employees' salaries. In the Ministry, there is a two-pronged approach to recovering
the amounts due and ensuring that the employee can receive his benefit at retirement.
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Firstly, the Compliance department of the Ministry uses moral suasion and, where
this is unsuccessful, legal action is pursued. Secondly, the employee has the option of
making a civil claim in the Resident Magistrate's Court under Section 48 of the
National Insurance Act to recover hislher lost benefit. The amount which is
recoverable is 12 Y2 times the annual old age pension payable at the date of
entitlement. The 12 Y2 times used is the average life expectancy of a person after
retirement. This currently amounts to approximately $1.5M. Where an employer
deducts the money but fails to pay it over, criminal proceedings can be instituted
against him. If convicted, he can be fined or face imprisonment.
Centenarians
Mr. Speaker, as I noted earlier, we are living in an ageing society. It is within this
context that special recognition is given to persons attaining 100 years. According to
ST A TIN there are over 1,000 centenarians in Jamaica. It is believed that some are as
old as 113, 115, 116, 118 and maybe older.
Since 1999 (the International Year of Older Persons) there has been a drive to identify
persons who are 100 years and older. The Ministry has held several functions in
recognition of these milestones. Those centenarians born prior to January 1908 are
provided with a Special Pension under the NIS. They are also provided for under the
NIGOLD Health Plan. Other centenarians are accommodated under PATH, and are
assisted under the Jamaica Drugs for the Elderly Programme (JADEP).
Persons with Disabilities
Mr. Speaker, Persons with Disabilities (PWDs) represent an integral part ofthe labour
force. Many of them have been exposed, and have developed a wide range of
competencies. They constitute a national resource, which has not been fully
harnessed over the years because of lack of opportunities. In this year's budget, over
$100M has been dedicated to empowering persons with disabilities.
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Mr. Speaker, of this figure $) 5M will go toward grants to the various voluntary
organizations providing various types of services for persons with disabilities while
$IOM has been allocated for grants to PWDs to start their own small businesses.
Additional resources have also been allocated for skills training.
Each year the Ministry has afforded employed persons with various levels of
disabilities the accommodation for income tax exemption. In 2009, 95 persons were
granted income tax exemptions and 57 persons for this year, to date. This includes all
categories of workers. These income tax exemptions amount to millions of dollars
which the Government is foregoing as revenue collection in order to provide for
PWDs.
The Abilities Foundation has strengthened its programme of vocational training for
PWDs to prepare them for the labour market. Currently there are over 100 PWDs
pursuing HEART training courses at the Foundation.
The challenge before us today is to bring Jamaicans together to fully include PWDs in
the productive sector. There can be no other way towards sustainable development
that will benefit and improve their lives. While we emphasize this inclusion we need
the private sector to be on board as currently the Government is the largest employer
ofPWDs. We need more companies in the private sector to recognize that PWDs can
work and participate in the productive sector.
Conclusion
Mr. Speaker, in concluding, I must emphasize that access to decent employment and a
stable industrial relations environment will help unlock the potential for creating a
Jamaica "the place of choice to live, work, raise families and do
business': in keeping with the Vision 2030 Jamaica National Development Plan.
The Ministry will continue to provide the platform for policies and training to
facilitate this VISIOn. The Ministry will place stronger emphasis on providing
assistance for the poor and vulnerable in the society.
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A lot of what has been achieved to date has resulted from the mature partnership
developed between employers, trade unions and the Government. Despite our
disagreements at time, I am sure no one can disagree about the extent to which our
deliberations have redounded to the benefit of Jamaicans over the years.
I have enormous faith in this process of engagement and will work to modernize the
Ministry to the whole process of transformation to address the global challenges
facing us. It is in this context that I want to express thanks to the tripartite partners
and look forward to continued collaboration.
The Ministry is committed to the task ahead. We are aware of the dynamic changes
in the world, but believe that the people of Jamaica have the innate potential to
succeed. Thank you.
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