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SUVA, Fiji (Fiji Times, Oct. 21) – More than 29,000 members of civil service unions in Fiji will receive a FJ$30 million (US$17.5 million) payout this Christmas in the form of a Cost of Living Adjustment (COLA) backdated to January 1 2004.

For the first time, the lowest paid union members will receive the largest COLA increase while the highest paid will receive the least.

This comes after Permanent Arbitrator William Callancinni yesterday awarded members of the Fiji Public Service Association, the Fiji Nurses Association and the Fiji Teachers Union their 2004 COLA Log of Claims.

The Confederation of Public Sector Unions yesterday said they would write to the Government to ensure that only union members received the COLA payout and not all civil servants as in previous years.

The unions had taken their case to arbitration after the Public Service Commission failed to accept their request for COLA adjustments.

It is understood that the backpay would be taken from $12 million the Government had put aside in its 2005 Budget for performance pay increases. And it was likely that certain ministries would be instructed to identify savings.

To accommodate further increases, the Government may have to go back to Parliament for a supplementary budget if it doesn't include any excess as part of the 2006 Budget.

In his ruling, Mr Callancinni departed from the practice of percentage rises and instead gave monetary increases.

The COLA payments are grouped in three categories with effect from January 1, 2004 and are to be incorporated into the pay scales of staff.

In Category A, the Tribunal has decided that public servants who earn $17,500 or less will receive an increase of $14 per week in their pay as COLA ($728 per annum).

In Category B, those earning between $17,501 and $35,000 will receive an increase of $10 per week COLA ($520 per annum).

And in Category C, those earning above $35,001 will receive an increase of $7 per week as COLA ($364 per annum). As an example, the lowest ranked officer in the SK05 grade, on a salary of $6398 would receive $14 per week or $728 per annum for year 2004 and he will move to $7126 per annum.

Even though that is still below the poverty line, his new annual salary amounts to an 11 per cent increase over his 2003 pay rate, chairperson of the Confederation of Public Sector Unions Rajeshwar Singh said yesterday.

"In Category A, staff close to $7500 pa (near poverty line) basic pay will realise a 9.7 per cent COLA increase effective from 1 January 2004.

"In Category B ($17501-$35000), the $520 pa returns a COLA increase ranging from 3 per cent to 1.5 per cent.

"Those in Category C above $35,001 would see one percent change or less, being the lowest increases as elaborated by the Tribunal.''

Mr Singh said a 2 per cent salary increase paid last December was not part of the arbitration ruling yesterday.

He said the rates given in this recent award were additional to the amount already paid, and that two per cent would also be taken into the salary scales.

The monetary figures were based on evidence, submissions and materials put before Arbitration by Economists, the Ministry of Finance, the Public Service Commission, the Unions and the Fiji Employers Federation.

The ruling also means the continuing of the COLA based pay increases over the proposed Performance Management System (PMS).

Mr Callancinni said the PMS does not promote equity in pay determination in the public service; it lacks objectivity; the criteria are not easily measured; and it is confusing and cumbersome.

Mr Callancinni said a flat rate percentage figure across the board tends to overcompensate the higher paid public servants whilst at the same time under compensating lower paid public servants.

"The result is a partial increase in the real wages of higher paid public servants whilst there is a partial reduction in the real wages of lower paid public servants," Mr Callancinni said.

"This would have the effect of not only increasing the wage gap and wage inequalities but also reduce the standard of living of lower paid public servants pushing some towards hardship.

"The purpose of COLA increase in wages is to maintain the purchasing power of existing wages, where the loss of the purchasing power is caused by inflation. It is not a reward and it is not based on productivity."

In a joint statement, the FPSA, FNA, FTU, Fijian Teachers Association, Public Employers Union and the Viti National Union of Taukei Workers welcomed the Arbitration Tribunal award.

He said COLA has been a historical practice within Fiji's workforce, but now the union and Government were faced with the question of whether to replace COLA with PMS, as that proposed by PSC.

October 21, 2005

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