Market Premium Not Negotiable – White Paper

The government will, henceforth, determine market premium and will not make it a subject of negotiations, a White Paper on the guidelines for market premiums on the Single Spine Pay Policy (SSPP) has stated.

“Government acknowledges that market premium shall be determined for critical but scarce skills and jobs through the conduct of comparative salary surveys. Thus, the government endorses the recommendation that it shall not be determined through negotiations,” the document stated.

The White Paper, signed by the President, Mr John Dramani Mahama, on April 9, 2013, said market premium would be paid by the government to attract and retain critical skills in short supply within the economy.

It said market premium would not be based on qualification, job description, job title, grade or level but strictly on the scarcity of skills.

“Market premium shall not be based on service classifications of occupational groups or jobs classified as essential services as specified under Section 175 of the Labour Act 2003 (Act 651) and as stated in Regulation 20 of the Labour Regulations, 2007 (LI 1833),” it said.

A section on transitional arrangement in the White Paper said with the issuance of the guidelines, all prior arrangements on market premium or memorandum of understanding (MoU) signed to the effect would be discontinued.

Additionally, any interim market premium would be discontinued as soon as a market premium was specified for a group.

It said market premium should not signify the importance or superiority of a job.

The document defined market premium as “an absolute amount paid only to employees with critical skills in short supply”, adding that the premium would not be calculated as a percentage of a worker’s basic salary.

This position of the government seeks to end the controversial issue of market premium determination as a factor of basic salary which was started as an interim measure for some workers when they were migrated onto the Single Spine Salary Structure (SSSS).

The White Paper stated that the government would review market premium periodically, with the timelines dependent on research findings.

It said the Fair Wages and Salaries Commission (FWSC) would be responsible for determining market premium, in consultation with the Ministry of Finance and Economic Planning and the Ministry of Employment and Labour Relations.

It said in determining market premium, the FWSC should undertake research and identify critical but scarce skills or jobs in the public sector.

The White Paper said cognisance was to be taken by government agencies of budgetary allocations in the determination of market premium.

It also said the degree of scarcity of a skill or job in relation to the government’s priority for that skill or job for a reference period and the ability of the government to pay should also be considered in determining market premium.

“Based on the government’s priorities, the list of scarce skills and jobs shall be published in the gazette,” it stated.

Other issues in the White Paper are the objective of market premium under the SSSS, which is to “enable the public service to compete favourably with the private sector for critical skills” and “to enhance performance and productivity in the public service”.

The document also said that “social security shall not be paid on market premium”.

The White Paper also noted that the government appreciated the valued co-operation and collaboration of its social partners and indicated that it would support intensive public information, education and communication campaign on the market premium by the FWSC and other social partners including the Ministry of Information and Media Relations and the leadership of organised labour and associations.

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