Govt asks unions to accept 8% pay cut
Government has asked workers to accept an eight percent pay cut, to be cancelled out by a one-year freeze in their pension contributions, according to the Bermuda Industrial Union.
It remained unclear whether all Government workers, or just civil servants earning more than $70,000 per annum, are being asked to accept a drop in salary.
BIU president Chris Furbert refused to say whether or not his members will accept the proposals. However, he revealed that Premier Paula Cox offered to take a pay cut herself as a sign of the tough economic times.
Outlining the proposals following a BIU general membership meeting about the new wage agreement, which was addressed by Ms Cox this morning, Mr Furbert said: “What was presented to the membership today was that the Premier of the country asked our members to consider an eight percent deduction in their superannuation [contributions]. It's normally eight percent for the Government and eight percent for the employee.”
He said it was recognised that the public pension pot is already underfunded and contributions from both Government and employees have increased in recent years.
“The request from the Government is that for one year they'd have a freeze on contributions to the superannuation [fund] from the Government and from the employees.”
He told the media this came after Government asked workers to accept an eight percent decrease in their salaries; but with the eight percent deduction in pension contributions to balance that out and keep the worker's income the same.
He said the proposal first emerged on Monday afternoon during a joint meeting with the BIU and Bermuda Public Services Union.
Asked who would be affected by the proposed pay cut he replied: “We have got to get that clarified. We thought it was going to be just for PS scales 22 up but we understand now they want it across the board.”
He explained that PS scale 22 and upwards means civil servants earning $70,000 a year or more. He understands that the proposed freeze in pension contributions would begin with the new fiscal year on April 1 and be for all Government workers except those about to retire.
“Anybody that's due to retire between April 1, 2012 to March 31, 2013, those individuals will not be affected by the freeze of pension contributions. They will not be losing 12 months of benefits. Those people are going to be excluded,” he explained.
The BIU now has to respond to Government's proposal, and Mr Furbert refused to say whether it will accept it.
“I'm not at liberty to tell you what the response is going to be because I think in all fairness Government should hear first what the response is going to be,” he said.
Asked if the Premier had offered any salary cut for MPs he revealed: “When we met at the joint meeting on Monday with the Premier and the Deputy Premier [Derrick Burgess] and a couple of our colleagues, the Premier herself did say that she is prepared to look at a wage cut in her salary. At that point in time she couldn't speak on behalf of her Cabinet. But she did say that.”
Asked if there was a Government request for the unions to reduce hours, he replied: “No request, no.”
Asked if Government made any assurances about layoffs or redundancies, he replied: “The Government has proposed that for the next 12 months there will be no redundancies and no layoffs.”
According to Mr Furbert, Government also met with BPSU executives and members this afternoon following a meeting with all the other unions that morning to outline the proposals.
“I can tell you that we have also been invited to a joint meeting for all the unions next week Wednesday at noon to dialogue on the proposal coming from the Government,” he added.