Lambert Brown, Guest ColumnistAfter reading Aubyn Hill's column about 'redundancy laws' last Wednesday, I reflected on a report in The Gleaner of February 9, this year under the headline "Aubyn Hill's $150 million pay day". Mr. Hill, in his column, argued that redundancy payments to Jamaican workers are "a big disincentive" and in effect becomes "protection for underperformers who are no longer useful to their employers." He further declared, "Jamaica is fairly unique with this (redundancy) cost" and that there "are approximately 150 international destinations in which investors can put their investment." Mr. Hill concluded his column as follows: "It is time to get rid of the redundancy law and this burdensome cost on Jamaican businesses."
influenced by his experience
Maybe Mr. Hill's views were influenced by the experience of paying redundancy to senior managers at National Commercial Bank (NCB) where he worked as managing director for two years. I would rather not believe that his views had anything to do with his own "ex gratia payment of almost $150 million", when he left NCB last year November. Under the 'rigid' Jamaica redundancy law that Mr. Hill is condemning, he would be entitled to payment of two weeks pay only if he had been made redundant. Of course, using the same principle of redundancy payment, any worker can agree with management to a termination payment higher than what the law provides for. Is it fair that Mr. Hill should want to deny Jamaican workers that which he took advantage of himself?
Naturally, as a trade unionist I don't think his position is fair. His is a view lying on the sandy bed of emotion rather than standing on the solid foundation of facts. Mr. Hill ought to know that redundancy or severance payment is universally recognised and is also grounded in international conventions such as ILO convention No.158 (termination of employment) of 1982. It is, therefore, not "fairly unique" to Jamaica, as he claimed. A simple search of Google by the astute and computer literate business leader would have revealed 915,000 results for 'Redundancy Laws'.
Secondly, from such a search, it will easily be discovered that the Jamaican law is far less rigid than those of several countries including Ireland, where investment and growth have been phenomenal.
Our redundancy law is not the major impediment to investment as it is being made out to be. Several international and regional companies have invested in Jamaica and made significant profits since 1974 when the Employment Termination and Redundancy Payment Act became law. Many more will still come in the future as they are doing even in the present.
I invite Mr. Hill to go and read the World Bank Doing Business Economy Rankings survey for 2006. There, he will find that of 155 countries surveyed Jamaica was favourably ranked at number 39 on the issue of hiring and firing workers. That was a better score than with 'Dealing with Licenses' and 'Registering Property' where Jamaica was way down at 82 and 95 respectively.
deal with real
problems instead
I agree that Jamaica needs to lower our cost of production and to increase our ever-too-low productivity levels. This is why the unions are embracing social dialogue and have signed several memoranda of understanding in both the private and public sectors. The major problem I find, is that there are too many employers in Jamaica who believe that the way to efficiency and competitiveness is to cut labour cost and take away the benefits that workers now enjoy. What is worse is, that, while they are seeking to deny benefits to workers, they are lavishing fabulous 'executive incentive share schemes', entertainment allowances, the poshest of motor vehicles, overinflated salaries and countless other perks on themselves. Rarely do we ever hear about the cutting of senior management cost. The redundancies are always at the bottom of the organisation, while the top gets the golden handshake.
Often times, the problems with the companies failing to succeed are bad business decisions, corruption and terrible leadership skills on the part of managers. Let us deal with these real problems instead of drawing the red herring of redundancy law across the trail to cover managerial incompetence. It is a weak manager who maintains the employment of underperformers. Workers want to know what will happen to their other benefits after the redundancy law is abolished. Will the next campaign be to get rid of pension or health schemes? Maybe it will be maternity leave, or will it be paid vacation leave? Workers are watching and will not allow either the employers or the Government to turn back their historical gains.
one-sided approach to cost-cutting
It is this one-sided approach to cost cutting that irritates, demoralises and demotivates the Jamaican workers thus often contributing to hostility and seemingly irrational behaviour in the workplace.
By the way, Mr. Hill, for the record, the majority of Jamaican companies do not pay end-of-year bonuses. In any event, however, a bonus is nothing but the savings made from not paying the same amount on top of basic salary each week. Isn't that the way smart managers calculate bonus Mr. Hill? And if they are really, really smart, they gain some interest during the 11 months before Christmas.
Employers must recognise that by treating workers fairly and with respect, while sharing information about the business in a timely manner, the best outcomes are likely to be achieved and redundancy never arises. In other words, redundancy payments may never ever have to be made. Real life Jamaican experiences have revealed that there are many companies that have made redundancy payments, restructured and are currently very successful. Rather than cursing the redundancy law, we should be grateful for its role in maintaining peace and industrial harmony at the workplace and social stability in the society. Let us recognise that had it not been for the redundancy law, many small businesses would not now be in existence. There would have been many more unemployed persons, homeless persons, beggars, and criminals, burdening the Government budget and increasing the demand for greater tax payment by all, thus further pushing up the cost of doing business in Jamaica. This would be the real disincentive to investment, production and growth.
I wish my readers a safe, healthy and happy holidays and that you may enjoy all-round prosperity in 2006, a year pregnant with exciting developments.
Lambert Brown is first vice-president, University and Allied Workers Union and can be contacted at labpoyh@yahoo.com.
