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Musings: Financial woes and public sector employment


By Jeff Cumberbatch

“…[D] o not personalise job loss. The cause for dismissal was a business calculation…” John-Talmage Mathis – For the (Soon) Unemployed…(2012)

“We hold these truths to be self evident…that [all men] are endowed by their creator with certain unalienable rights…life, liberty and the pursuit of happiness [prosperity]” – US Declaration of Independence 1776

I usually started my Dismissal Law [the law on the termination of employment] lectures with a critical examination of the deleterious consequences of job loss. Not that this has anything directly to do with the pertinent law itself, but I hoped thereby to provide the students with some understanding that whether one is acting as counsel for the employer or as counsel for the dismissed employee, a decision of the court adverse to the employee might have grave implications for his or her physical and psychological health.

A Time magazine article for May 10 2009 by Alice Park relates the results of a study by Kate Strully, a sociologist at State University of New York. This found that among people who became unemployed owing to factors beyond their control and who did not report any health problems prior to losing their job, 80% were diagnosed with a new health problem – ranging from hypertension and heart disease to diabetes – 18 months later. According to Strully, “Job loss leads to a lot of physiological changes”.

Moreover, these effects appeared to be long-term. Even if some of the displaced workers were re-employed within 18 months, they also reported an increased onset of new health problems. And lesser-remunerated workers appeared to be harder hit so far as their health was concerned; a phenomenon that Strully ascribes to the smaller financial buffer that these workers tend to have to cushion the impact of a sudden loss of income. The article concludes that all of this serves as a strong reminder that losing one’s job can be traumatic for both body and mind and may have lasting effects.

Given that a purported caring administration would not be unmindful of these consequences, and given its electoral undertaking or, at least, representation to terminate the jobs of public workers as a last resort only, the announced proposal on Friday the 13th of this month by the Honourable Minister of Finance to dismiss some 3 000 members of the public sector in early 2014 should have
indicated even to the proverbial “blind man sitting backwards on a trotting horse” that our current economic situation is indeed dire.

What immediately gives cause for puzzlement however, is that despite the relatively cogent case advanced by the chancellor of our Exchequer and the Honourable Prime Minister that there was no other practicable recourse in the present circumstances – Mr Stuart asserted that it was no longer possible “to ignore structural and systemic problems in the interest of wet-nursing and molly-coddling critics” – the governing administration nevertheless subsequently affirmed its willingness to meet with the representatives of the public workers’ organisations, apparently as an afterthought, to hear their alternative suggestions.

This arrangement is, of course, in keeping with the substantive, though arguably not procedural intendment of Section 6.10 (a) of Protocol VI of the Social Partnership, which stipulates that when an employer contemplates terminations, it shall, among other things, “provide the workers’ representatives concerned in good time with relevant information including the reasons for the terminations contemplated, the number and categories of workers likely to be affected, and the period over which the terminations are to be carried out”; and Section 6 (10) (b) which requires that in accordance with national law and practice, it should give [to] the workers’ representatives concerned, as early as possible, an opportunity for consultation on measures to be taken to avert or to minimise the terminations and measures to mitigate the adverse effects of any terminations on the worker’s concerned…”

Still, one effect of these clauses in the Protocol would be to appear to deny to an employer the entitlement to make a definitive pronouncement of intended terminations until there is an agreement with the worker’s organisations that there shall indeed be terminations at the initiative of the employer and, if so, how many, when, and under what conditions.

It must be conceded however that such a conclusion tallies hardly with the existence of the generally accepted notion of the managerial prerogative of “final decision-making to safeguard the viability of its operations”, a concept specifically referred to in Section 6 (2)(b) of the Protocol. Unless the employer is to be taken as having completely surrendered this right – a most unlikely eventuality – and in the absence of clear provision that it has indeed been abandoned, any claim of a contravention by an employer of the Protocol could lead to a dispute that might have to be resolved either by
social dialogue or industrial warfare.

Happy to relate, in the circumstances, the representatives of the workers appear to have connived at this technical infringement, and to have chosen the path of social dialogue.

Yet, even in this context, there is likely to be a legal issue. According to another section of the press last week, one of the alternative options contemplated by the most representative public workers’ organisation is that all public sector workers should volunteer to take a three per cent pay cut, a proposal that has been met with a counteroffer from Government negotiators that five per cent cut would be “more realistic”. However, the notion of a pay cut, even if voluntary, might raise some substantial legal and constitutional issues.

First, it should be recalled that there was a 1995 amendment to the Constitution that provides: “The salaries and allowances payable to the holders of offices established under the Civil Establishments Act and the Defence Act shall not be altered to their disadvantage”. [Section 112A] There might be a tenable argument that a voluntary undertaking to permit a downward variation of one’s salary is not to that individual’s disadvantage and that the section merely prohibits a unilateral negative variation by the state, but the idea that constitutional entitlements, generally regarded as inalienable, might be so easily surrendered is not particularly appealing to many.

In any event, even if one individual should voluntarily opt for a pay cut, this would not necessarily bind another individual who is not similarly minded. Nor would a majority decision by a workers’ organisation be binding on all its members. The right conferred by section 112A is an individual and not a collective right whose existence or non-existence is to be determined on the basis of democratic assent.

Of course, Parliament may, by the required majority, amend the Constitution to repeal this right – section 49(2) – but, given the present composition of the lower Chamber, this recourse would require the co-operation of the Opposition, comprising the very party that enacted the provision in the first place.

A blessed Christmas to you and yours.

To be continued…

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