Guysuco has struck a deal that will see sugar workers receiving their Annual Production Incentive (API) but the company is still mulling a reform of the payout scheme given the need to cut costs.
According to the Guyana Agricultural and General Workers Union (GAWU) newsletter Combat, the sugar corporation has agreed to give 19.45 days of pay with a production target of 305,000 tonnes of sugar, plus an additional day's earnings for every 8,950 tonnes over the mark. The company paid around $1B last year under the API.
It also agreed that each estate could qualify for a greater number of earnings than the national target, depending on its production surplus. The incentives are given based upon the level of sugar production.
The company finally reached an agreement with the union after four bilateral meetings and one conciliation conference at which it had been pressing its proposal to replace the API with a Profit-Based Incentive (PBI) scheme.
The PBI was to award incentive to workers based on the profits of the company.
But it was rejected outright by the union which contended that the scheme was unfair since it went beyond the control of the workers, who would not be responsible for any poor management of the industry which might affect profits.
Guysuco agreed to retain the production-based incentive scheme although made it clear that its reform or replacement may be necessary.
Also, as part of its terms for the agreement the company asked for an 80% rather than 75% attendance record for workers to qualify for the incentive.
The union's delegation agreed to the condition as it noted that the Weekly-Production Incentive (WPI) also requires an 80% attendance record.
Guysuco had sought to introduce a productivity-based scheme under a condition the Guyana Government agreed with the World Bank for funding of the Skeldon Modernisation Programme.
The PBI scheme is based on the imminent need to link incentives to profits as the company continues to pay out large sums even when it does not make a profit.
It paid out close to $1B to workers last year under the API scheme.
Guysuco proposed a three-year agreement for the 2004-2006 period.
It suggested that during the transitional first year it would boost the available profit to meet the expectations under the API scheme based on the production for the year.
But this would not have been used during the ensuing years, since the projected profits would be sufficient to meet the expectation of the incentive.