This offer is more than the initial three percent which the Government had laid on the table at the start of negotiations with the Guyana Public Service Union (GPSU) some months ago. The discussions eventually stalemated after both parties, for a second year running, deadlocked in their negotiations for wages and salary increases for the public servants.

In announcing the increase yesterday, Cabinet Secretary and Head of the Presidential Secretariat, Dr. Roger Luncheon said this was "Government's maximum offer" to public servants and it will be the "final payout for 2002".

According to Luncheon, Cabinet felt that the likelihood of a timely resolution through arbitration had been diminished by a number of unexpected factors, such as the unavailability of the Chairman previously agreed upon to head the Arbitration Tribunal, and the inclusion of wages and salaries for 2002, plus increases of some 19 allowances.

"Cabinet authorised a payout to employees in the traditional public service based on a five percent increase on December 2001 wages and salaries which is retroactive to January 1, 2002," Luncheon announced at his regular post-Cabinet news conference at the Presidential Secretariat, Georgetown.

"Cabinet also authorised a payout to eligible categories of contract employees based on a four percent increase on their December 2001 wages and salaries, again, retroactive to January 1, 2002," he said.

Luncheon said, too, that Cabinet instructed that steps be taken by the responsible Government Ministries, agencies and departments to ensure that these payments are received in a timely fashion and in anticipation of the upcoming Christmas holidays.

Regarding the salary increases for the Joint Services, Luncheon said Cabinet has decided that wages and salary increases in the order of five percent over their December 2001 levels would be provided to members of the four entities in the Joint Services - the Guyana Police Force, Guyana Defence Force, Guyana Prison Service and the Guyana Fire Service.

Luncheon said the hike would be retroactive to January 1, 2002.

According to him, Cabinet noted that there are ongoing considerations on specific interventions to improve the conditions of service of the members of the Guyana Police Force.

He also pointed out that Cabinet in its discussions was made aware of the difficulties with the arbitration mechanisms and the resort by the union to "the use of improper and inaccurate information about Government's designs - a move to suggest that Government intended in the very first place not to go to arbitration and to impose salary increases outside of the collective bargaining agreement".

"Cabinet at its meeting on (Tuesday) was updated on the most recent developments in the Public Service Management and the Public Service Union disputes over increases for 2002 wages and salaries for public servants in the traditional public service. At that meeting, it was disclosed that the likelihood of the timely resolution through arbitration of that dispute has been diminished by a number of unexpected and unforeseen circumstances, primary among which were the unavailability of the previously agreed upon Chairman of the Arbitration Tribunal and also a deadlock on the inclusion of items in the terms of reference for the arbitration (panel)."

He noted that among the agreements not reached were a multi-year wages and salaries agreement proposed by the Government and the inclusion of as many as 19 allowances for various categories of public servants as proposed by the union.

"The offer that was made by the administration of three percent at the beginning of the discussions with the union reflected the Government’s opening positions, and as you are quite aware, by no means reflected what the administration was willing to or prepared to offer," Luncheon said, in response to a query on why the Government decided to up its initial offer.

"We anticipated that the arbitration mechanism would likely be invoked in the process of resolving this wages dispute for 2002, and therefore, it is built-in into the Government's approach, some levels of flexibility in terms of the final dispensation," he added.

"We have responded to the Ministry of Labour's analysis that arbitration is not likely to provide a solution in 2002. This payout represents then, the Government's maximum offer. So the move from three percent to five percent to the employees in the traditional public service flows from the failure to institute arbitration in a timely way and hence, the provision of the Government's maximum offer in this payout," Luncheon added.

"My anticipation is that the computations would or should be concluded in time to provide both the statutory December monthly payments by Friday, December 13 and the retroactive payment sometime before or shortly after December 13," he added.

"Our computation also suggests that the cost of that payout can be and should be accommodated within the figures budgeted to make the payments for wages and salary increases and additionally for pension payments and increases in 2002 and some other smaller and lesser significant categories of increases; that sum was a little over $1Billion…”, he said.

Luncheon also stressed that this increase is intended to be the final payment in the fiscal year 2002. "It is not anticipated that additional payments for wages and salaries increases for 2002 would be made in 2002, (so) this is the final payment," he said.

It is understood that the Public Service Ministry had earlier submitted a proposal to Cabinet for the increases to be paid out to public servants.

Permanent Secretary within the Public Service Ministry, Dr Nanda Kishore Gopaul disclosed Tuesday afternoon at a news conference that once the payout is approved it will be retroactive to January 1, 2002.

According to Gopaul, following the breakdown in talks between the Government and the Guyana Public service Union (GPSU), both parties had agreed to the establishment of a tribunal, headed by a chairman, to oversee talks that would have led to a possible break in the impasse between the two sides.

Gopaul pointed out that Father Malcolm Rodrigues, in his capacity as Chairman of the Public Utilities and Undertakings Act, was identified by the negotiators as best suited to chair the tribunal.

But according to him, Father Rodrigues indicated his unavailability to the Chief Labour Officer.

Gopaul contended that the present situation was frustrating to both parties and also public servants.

“PSM has to be mindful of its role and relationship with public servants. We have a primary relationship with them … they have been calling for a payout to be made.”

It is a result of this call, coupled with the inactivity between the Government and the GPSU, that the Government has moved to obtain the approval of Cabinet of a payout, he said.

He reminded that “it is a payout without prejudice to further discussions with the union.”

The Terms of Reference continues to be a sticking point in the negotiations between the two parties, as they made many futile attempts to work out arrangements for arbitration in the impasse over wages and salaries for public servants, a major issue being allowances.

The GPSU and PSM commenced negotiations for wages and salaries for public servants on April 4 last, and Gopaul had previously said that the Government had done everything possible to have a satisfactory resolution to the wages dispute.

He said then that the Government had gone to the length of even committing itself to outside assessments of its financial capabilities but that unfortunately, the union did not flex in its approach to the matter.