TUC Barks At Gov’t…Over Proposed Freeze On Salaries

The Ghana Trade Union Congress (TUC) has described as unfair and ‘insensitive’ government’s decision to freeze pay increases for workers.

This intended action, according to government will take care of the country’s budget deficit which is skyrocketing.

The Minister of Finance, Mr. Seth Terkper presenting a policy statement on Ghana’s economy on the floor of parliament, indicated that government is considering placing a moratorium on increases in public sector salaries this year.

But in a statement released by the General Secretary, Kofi Asamoah, TUC said government’s decision to consider that action in the first place is strange.

“This is unthinkable and unacceptable. We would like to warn government that Organised Labour would do whatever it takes to resist such policies, with particular reference to the so-called moratorium on public sector wage increase”.

Speaking to Kwami Sefa Kayi on Peace FM’s ‘Kokrokoo’, Kofi Asamoah said when they heard of the proposed freeze, they thought it was a joke to mark April Fool’s Day but “we later realised it was real”.

we can sacrifice but it will be difficult to over-sacrifice…looking at the current increment in utility bills, it will make livelihood unproductive and unbearable if you say you will not increase salaries. They are just trying to get people out of job…we should all look for a way out. The solution is not to put people out of work,” says the TUC.

Below is the full statement by the TUC


This week, the negotiations for upward review of the Base Pay on the Single Spine Salary Structure commenced under the auspices of the Public Services Joint Standing Negotiating Committee (PSJSNC). This year’s negotiations are important for two reasons. First, it marks the end of the five-year implementation cycle for the Single Spine Pay Policy (SPSS), which commenced in 2010. Second, the general economic situation prevailing in the country makes this year’s negotiations critical for workers and their families who continue to suffer unbridled imposition of taxes and daily price increases.

It is important to reiterate that, despite the bastardization by the very Government implementing the policy, the Single Spine Pay Policy (SPSS) has had noble objectives from the onset. Principal among these objectives was to consolidate the over 120 salary structures that existed in the public sector into a unified salary structure. This has largely been achieved with the migration of nearly all public sector workers classified under article 190 of the 1992 Constitution. By this feat, government now has full knowledge and control over its compensation system.

Prior to the implementation of the SPSS government did not even know the exact number of employees on its payroll. Government was not even aware of some of the existing pay structures. The second objective was to remove distortions and inequities in the pay administration. The new pay policy is based on the principle of equal pay for work of equal worth. Once this objective is achieved it is envisaged that resources would be freed to allow for further enhancement of public sector pay.

At the start of the implementation of the SPSS, the government white paper stated among other things that the new pay policy would be

implemented in an “inverted pyramid” form over a five-year period. By this, government indicated that more resources would be made available for the implementation of the policy as we approach the five- year period. Among other things, this commitment underlies the significance of this year’s negotiations. Organised labour took this commitment in good faith; we explained to our members to be patient and that as we approach the end of the phase implementation things would get better. In the intervening period, workers have forgone negotiations of non-wage conditions of service including allowances.

The working people of Ghana have high expectations as the five-year implementation period draws to a close and also given the fact of the harsh economic realities that have been visited on them by government policy choices.

It is, therefore, surprising and almost disheartening to read the policy statement on the Ghanaian economy presented by the Minister of Finance to Parliament on 1st April 2014 in which he outlined a long list of austere policies. In particular, organised labour finds it strange that government is proposing a moratorium on pay increase for this year. We find government’s statement made symbolically, on April Fools7 Day full of inconsistencies. A critical analysis of the policy statement leaves us with one obvious conclusion: that Government has once again demonstrated that it is totally insensitive to the harsh economic and social conditions the working people of Ghana and their families are facing.

We have come to this conclusion because of the policy mix contained in that statement. We are particularly baffled by the policy inconsistencies in the statement and wonder why a government, which claims to be social democratic, can even contemplate such a policy mix as the solution to the economic crisis in which we find ourselves today in Ghana.

We note the first reason cited by the Minister to explain the current economic crisis which is clearly evidenced by the high and increasing cost of living in the country namely “implementation challenges associated with the single spine wage policy initiated in 2007 to correct distortions and inequities in the public sector wage structure”.

We insist that the single spine pay policy is not the problem. The problem is how the economy is being managed, or more appropriately, being mismanaged. In other words, the main reason for the economic crisis has to do with the wrong policies adopted by Government to manage the economy. This reason was, understandably, left out of the list of reasons the Minister cited in the policy statement because government is not willing to accept economic mismanagement and wrong policy choices as the main reasons for Ghana’s current unenviable social and economic conditions.

We are fully convinced that if government is bold enough to abandon the IMF textbook macroeconomic policies and adopt the right social and economic policies Ghana will be out of this crisis in no time. What we need are policies that will take Ghana out of the current situation where over 8 million out of the 26 million Ghanaians find themselves in poverty despite all the natural and human resources endowment in the country, including oil.

The removal of subsidies on fuel and utilities, the increase in the highly retrogressive VAT from 15 to 17.5 percent on consumer items including food and medicine are undeniably the main causes of the high and ever increasing inflation and cost of living which have actually pushed more Ghanaians into poverty.

We would like to remind government that one of the main assessment criteria for good governance is the creation of decent jobs. But instead of adopting policies that will create decent jobs for the teeming youth roaming the streets of Accra and other urban centres government is rather continuing the policy of net freeze on employment in the public service, the rationalization of public sector staff in MDAs (including encouraging early retirement of public sector workers) as well as public sector reforms, with particular emphasis on right-sizing the public service.

Instead of enhancing the welfare of public sector workers who are toiling day and night to provide invaluable services for the people of Ghana government is rather proposing a moratorium on public sector wage increase in 2014. Instead of seeking to improve the wellbeing of the poor in society, government is rather determined to continue the socially unfriendly policy of complete withdrawal of utility and petroleum subsidies, in accordance with the dictates of the IMF. We wonder why government thinks that it can combine such policies all at once. How can government which professes to have the interest of Ghanaians at heart increase tariffs on utilities, increase VAT, increase fuel prices, abolish allowance payment to teacher and nursing trainees, and at the same time propose a moratorium on wages, all at the same time?

This is unthinkable and unacceptable. We would like to warn government that Organised Labour would do whatever it takes to resist such policies, with particular reference to the so-called moratorium on public sector wage increase. We should remind government that public sector workers are paid for the invaluable services they provide to Ghanaians. Any attempt to reduce the real value of their earnings will negatively affect the delivery of such services, including health care, education and security.

We are, therefore, calling on the membership of all Organised Labour groups, civil society organisations, students and, indeed, all Ghanaians to join us in resisting these austere policies.

It is also clear from the statement that the Minister does not fully understand the laws, rules and norms governing industrial relations practice in Ghana otherwise he would not have taken issues of salary negotiation to Parliament when we are already negotiating salaries through the Public Services Joint Standing Negotiation Committee (PSJSNC). If by taking such issues to Parliament the Minister was seeking to gain public support for such policies he has failed miserably because on such issues the public is on the side of workers. We will never allow any government to take away the right of collective bargaining which workers of Ghana earned with the ratification of the International Labour Organisation (ILO) Conventions 87 and 98 in 1957 by the Great Leader Osagyefo Dr. Kwame Nkrumah of blessed memory.

With high interest rate of about 25 percent, reflecting the high cost of doing business in Ghana, the increasing cost of living, the unstable exchange rate, the poor sanitation in our cities, and the incessant traffic jams on our roads in the major cities we wonder why the Minister still thinks Ghana remains a favourable investment destination. We do not see any evidence of that. We would like to advise the Minister to stop the self-gratification, change the defensive posture he has adopted and get to serious business of managing the economy of Ghana. If, indeed, Ghana is a middle-income country, our policies must reflect that status.


04 APRIL 2014