HONOURABLE PEARNEL CHARLES, CD, MP, JP Minister of Labour and Social - - PDF document

SECTORAL DEBATE 2010/2011 Presentation by HONOURABLE PEARNEL CHARLES, CD, MP, JP Minister of Labour and Social Security Tuesday, October 12, 2010 Gordon House, Kingston

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Introduction

• Mr. Speaker, emanating from the Sectoral Debates last year was a consensus that the

global recession had impacted the Jamaican society in unprecedented ways. However, I believe we have seen compelling evidence which indicate that the country, while not totally out of the woods, has been stabilized and is now on a path towards economic growth.

• Mr. Speaker, in spite of

the challenges, the social sector was adequately provided for in the Budget. As the Prime Minister assured us in his presentation, all efforts were to be made to ensure that education, health and social security would be a priority in

• rder to provide a cushion for the vulnerable groups in the society. As a result, my

Ministry ­ which is responsible for a significant part of that social sector ­ was able not only to maintain existing support levels, but also to extend our reach in a number

• f

services so that more persons were captured under the social security programmes. Through participatory dialogue with our traditional partners (employers and trade unions) and other stakeholders, we have been able to maintain a relatively stable industrial relations climate. While this remains our core function in the Labour Division, we are also engaged in training, job creation and marketing of skills

• verseas. Human capital development has to be a major objective of

the Ministry in these times if more workers are to be properly positioned to compete in the global marketplace.

• Mr. Speaker, throughout the year, we experienced significant challenges on the

industrial relations front. Among public sector workers there have been demands for improvement in their working conditions. The Government recognizes the importance

• f this and, in most instances, their demands are legitimate. Nevertheless, the

economic realities ofthe country must also be recognized.

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As responsible public servants, there has to be sensitivity and understanding of the plight of the Government. The Government is not intransigent in believing that there will be no changes, but asks that the demands be made within the confines of the current economic situation. Unless this is so, it will only become worse for everyone concerned. In most ofthe disputes in which the Ministry has offered its conciliatory services, the issues were satisfactorily resolved although only the major ones were reported on

• nationally. The Ministry continues to build its capacity for intervention and

conciliation and I want to congratulate the members of staff who continue to work diligently, even at great personal sacrifice, to deal with these disputes.

Overseas Employment

• Mr. Speaker, the global recession has continued to significantly impact the overseas

employment programme. The negative effect ofthe economic recession in the United States has resulted in a decline in the number of workers for both the Farm Work and Hospitality Programmes during the first part of the 2009/2010 season. The Farm Work Programme reflected a decrease in the USA by 7.8 per cent while the hospitality programme declined by 53 per cent in comparison to the 2008/2009 season. In terms of the Canadian programme, Mr. Speaker, there was relative stability as the programme experienced a decline of only 3 per cent. This resulted from the downsizing of several farms during the latter part of the 2009/2010 financial year. Five thousand, eight hundred and sixty­two (5,862) workers participated in the programme in the last financial year, compared with 6,053 in the previous year. Mr. Speaker, in spite of the challenges imposed by the difficult international economic environment, the Ministry was able to place more than 10,000 Jamaican workers in employment opportunities both in the USA and Canada.

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Remittances

• Mr. Speaker, we cannot overemphasize the importance ofremittances to the Jamaican
• economy. According to BOJ statistics, in 2009/2010, total remittances to the country

were US$2.1 B compared to US$2.3B in 2008/2009, a slight decline of 9.5 per cent. Remittances from the US Farm Work and Hospitality programmes fell from US$9.3M to US$6.1M, largely due to the decline in the number of workers who participated in the Hospitality Programme. Remittances from the Canadian Programme were quite stable with a marginal decline of 2.9 percent from Can$12M in 2008/2009 to Can. $11.7M in 2009/2010. Prospects for the current financial year are extremely encouraging. Already we are witnessing an increase in the number of employment opportunities under the US Hospitality Programme. Many of the traditional employers are now experiencing an upturn in economic activities and are recalling workers who were not recalled for the last two seasons. The US Farm Work programme is also showing signs of growth as new employers are participating in the programme. Two months ago, a new employer in California engaged 300 workers in the citrus industry ­ an area which we have been trying to exploit for some time now. In Canada, there are strong indications of a rebirth in the tobacco industry. More than 160 workers were recalled to several tobacco farms and are being processed for dispatch as we speak. New employers are also coming on stream in the seafood industry in New Brunswick and Nova Scotia. Workers are already being dispatched to growers of strawberries and other fruits in provinces such as Nova Scotia and Ontario. Non­traditional employment opportunities are also poised for growth as the Ministry realizes the fruits of partnerships with several training institutions in Canada. In June 2009, 18 Jamaicans left for Red River College in Manitoba where they completed 3

training and were awarded Red Seal Certification as chefs. These workers are all currently employed in Canada. In January, 14 heavy duty mechanics were dispatched to the College of North Atlantic in Newfoundland and 13 auto service technicians were sent to Red River Col1ege. These trainees have completed training in their respective disciplines, obtained their Red Seal Certification and are employed in

• Canada. It must be understood, that securing employment depends on successful

completion ofcourses to gain Canadian certification.

Deaths ofFarm-workers

• Mr. Speaker, I wish to take this opportunity to express sympathies to the families of

two ofour farm workers. who died recently in Ontario, Canada. They are 44 year­old Ralston White from Preddie. Manchester and 36 year­old Mr. Paul Roach of Milk River, Clarendon. According to the autopsies, both Mr. White and Mr. Roach died as a result of environmental suffocation. The circumstances surrounding the accident are still being investigated by the Ontario Provincial Police as wen as the Ontario Ministry of Labour Health and Safety Division and our Liaison Service. The families have been compensated in the sum of C$15,OOO from the insurance plan

• perated by the Jamaican Liaison Service. Each fami1y has received an initial lump

sum payment which is the maximum payable under the Workmen Safety and Insurance Scheme. In addition, spouses and children will receive a monthly

• al1owance. The spouse will receive the monthly payment until death and the children

will receive until age)

• 9. The Children will receive payment up to age 30 if

they are in university. This represents a reasonable package. The Ministry continues to be proactive and so through our Liaison Service in Canada we are conducting on­going inspections to reduce and where possible, prevent work place fatalities and accidents. 4

• Mr. Speaker, we take a keen interest in the welfare of Jamaican workers engaged
• verseas. We have established a Family Services Unit in the Ministry which is a

social intervention programme designed to strengthen family ties while spouses are

• away. A major focus of this programme is to ensure that earnings are used for the

maintenance and development of families. Since the inception of the Unit two years ago, over 6,000 families have benefited. This has resulted in increased remittances to families, improved school attendance and involvement in entrepreneurial activities.

• Mr. Speaker, we are also taking steps to prevent migrant workers from returning

home without adequate provisions for their retirement after many years of

• employment. We have, therefore, put in place the necessary arrangements to facilitate

their participation in the National Insurance Scheme. We intend to do a similar exercise for their participation in the National Housing Trust (NHT) and Health Insurance coverage.

Industrial Relations

• Mr. Speaker, the year 2009/2010 has been somewhat challenging for the Ministry as

it pursued its mandate of promoting and maintaining industrial harmony at the workplace through tripartite dialogue. With the advent of the economic recession and its impact on Government's wage policy, there have been a number of difficult disputes, particularly in the public sector. The financial meltdown has also affected the private sector. As you are aware Mr. Speaker, the faU­out in this sector has led to significant loss ofjobs, productivity and revenue, especially in the bauxite Industry.

• Mr. Speaker, the Ministry maintains a record of

the number of redundancies. In fact, the Employment Termination and Redundancy Payments Act (ETRPA) were recently amended to require all employers to report to the Ministry all proposed as well as reported redundancies. Mr. Speaker, we consider this to be of vital importance as we want to ensure that redundancies are carried out in a manner consistent with the provisions of the law. Workers must receive what they are entitled to. The law is

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there to protect workers as well as employers because, in the long run, when issues of separation are not dealt with properly, redress is usually sought in court at great expense to all parties. So this Jaw is important. I must report to this Honourable House that the response to the requirements of the law has been satisfactory so far. Mr. Speaker, since July 2008 and up to September 23,2010, we have recorded 22,000 cases of redundancies, representing unionized and non·unionized workers. I now present to you the statistics ofjob losses in the various sectors as officiaJly reported to the Ministry.

• In the Manufacturing Sector, 36 companies reported a total of619

redundancies.

• In Financing, Insurance, Real Estate and Business Services, 55 companies

reported a total of 990 job losses.

• In the Community, Social and Personal Services sector, 40 companies

reported 586 redundancies.

• For Restaurant Services, 18 companies laid off 179 workers.
• In the Retail Services sector, 50 companies reported 894 job losses.
• The Hotel Services sector reported 1,501 redundancies by 46 companies.
• In Communication, 13 companies reported 1,099 redundancies.
• In the Transportation and Storage Sector, there were 3,412 redundancies

from 33 companies. The largest number ofcasualties occurred at Air Jamaica with 2,535 during the recent winding·down operations. 6

• The Agricultural Sector was where the bulk ofthe redundancies occurred ­ a

total of 8, 975 by 17 companies. The sugar companies alone, arising from the divestment exercise, reported over 7,000 redundancies.

• Electricity, Gas and Water reported 244 redundancies from six companies.
• In the Mining Sector, there were 3,253 redundancies reported by seven

companies, with Windalco, Alpart and Alcoa­Hatch accounting for the majority ofjob losses.

• In the Education Sector, six companies reported 66 job losses.
• The Construction Sector reported 133 job losses from seven companies.
• Mr. Speaker, the Ministry continues to monitor companies closely to ensure

compliance with the ETRP

• A. And we consider this legislation so important that we

decided to insert a new section into the Act. I want to remind employers that there are stiff penalties for non­compliance.

• Mr. Speaker, the Act now requires employers to submit a written statement of

calculations of redundancy to employees. Failure to provide this statement results in a fine of $250,000 ­ up from the paltry amount of $100. Mr. Speaker, the law also requires the company to submit to the Ministry the effective date of dismissal; name and address of employees; the amount payable to employees; the name, description and type of employee's post, membership in union and name of union, where

• applicable. This information must be submitted within 21 days from the date of

decision for redundancy or dismissal. The penalty for non­compliance is $250,000 or imprisonment of 3 months. 7

Polygraph Testing

• Mr. Speaker, as we seek to level the playing field for Labour and Management we are
• nce again faced with new complaints. These complaints are not of the conventional

types which relate to breaches of the Labour Laws, but are more of a social nature which needs an alternative dispute resolution mechanism instead of conciliatory

• process. Mr. Speaker, the Ministry has been receiving reports that some employers

are requiring that employees submit to polygraph testing. Workers have been complaining that their rights are being violated due to the taking

• f this test. The employees have also complained that the results of these tests have

been utilized as a basis for their dismissal or other disciplinary action. Some employees have also complained that they have agreed to polygraph testing out of fear of losing their jobs or being otherwise penalized as the result of a refusal to take such tests. Currently Mr. Speaker, there is no statute in Jamaica that prohibits the use of polygraph testing as a basis for granting, continuing or terminating employment. Additionally, there is no provision which compels a worker to submit himself to polygraph testing. At the same time, there have been increasing concerns about the credibility of polygraph­test results and there is a strong possibility that employers who rely solely on the results of polygraph tests as the basis for dismissing employees might not be able to successfully defend a wrongful dismissal suit.

• Mr. Speaker, if

you employ a group of workers for five, six, seven or eight years, and then come Monday morning, everybody has to take a polygraph test to stay on the job, I cannot support you on this action. But, if you tell me that you are going to employ some people next week and a standard that you are setting is that they must convince you, through a polygraph test that they are the right employees that you need, then I can discuss that with you.

• Mr. Speaker, this Ministry, in the 2010/2011 fiscal year, will be carefully reviewing

this issue to make a policy decision as to whether legislative provisions should be 8

introduced to regulate polygraph testing at the workplace. This is in an effort to maintain a more harmonious worker management relationship. At this point, Mr. Speaker, I am making a special appeal to Management and Labour to work together. You have to co­exist and lack of trust is not conducive to good worker­management

• relations. Initiatives at the local level to increase productivity and reasonable sharing
• f the gains could go a far way towards improving morale and avoid some of the

disputes reaching the Ministry.

Occupational Safety and Health

• Mr. Speaker, the Ministry continues to put in place strategies to bring the

Occupational Safety and Health Programme to international standards. We continue to pursue a national programme to link productivity with a safe and healthy working

• environment. Some of

the strategies being pursued include:

• Increasing the span of

workplaces that are monitored and inspected on a regular basis to include agricultural undertakings, offices, hotels, and garages.

• Expansion of

the Voluntary Compliance Programme.

• Accelerating the process for the enactment of the new Occupational

Safety and Health Act.

The National Workplace Policy on HIV&AIDS

HIV &AIDS will continue to get the kind of attention and support needed to prevent the spread of the disease, stigma and discrimination at the workplace. This year, the National Workplace Policy on HIV &AIDS examined by the Joint Select Committee was approved by this Honourable House in February, 2010. We await the consideration by the Senate. This policy will provide a foundation for the legal framework on HIV/AIDS at the workplace. We are grateful to USAID for funding the HIV IAIDS Voluntary Compliance Programme (VCP) to the tune of US$76,OOO. 9

Labour Market Study

• Mr. Speaker, the number of graduates leaving tertiary institutions each year whose

training never seem to accomplish any real fit between the demands ofthe job market and the courses pursued, is of growing concern to the Ministry. A number of students seem to be pursuing subjects that are easy to negotiate leaving gaps in subjects and skills which are more challenging, such as Mathematics. What this has created, Mr. Speaker is a "masking" or camouflaging of the employment situation in Jamaica, in that jobs may be available in different areas of the labour market, but students do not have the specific skills for those openings. So, you see there has to be a different approach to career guidance and the global availability ofjobs must be used to guide career path. I recently commissioned a study to determine the demand for and supply of skilled workers in Jamaica. The field work was conducted between March and July, 2009. The sample covered six education and training institutions and 303 employers in 11 major industries. The Study attempted to identify:

• Areas ofactual and potential growth in employment;
• Gaps in the labour force as it relates to skilled labour;
• Changes and anticipated changes in the demand for skilled workers;
• The extent to which migrant skilled workers are being employed at the

expense ofJamaicans; and

• Employment opportunities for persons with disabilities.

Areas of actual and potential growth in employment are found mainly in the Agricultural, Manufacturing, and Wholesale and Retail sectors. According to the survey, the types ofskills that are in high demand include customer service, computer technology and sales. Several skil1 gaps were identified in the labour market which includes Nursing, Practical Nursing, Computer Technology, Mechanical Engineering and Psychology. 10

The anticipated changes in demand for skilled workers over the next five years include an increase in demand for persons with Levels 2 and 3 vocational

• certifications. It has been noted that there is a shortage of Instructors to teach Metal

Engineering at levels 4 and 5. At the tertiary level, it is forecasted that there will be an increase in demand for persons with Bachelor's and Master's degrees who have managerial and supervisory skills. In addition, it is anticipated that there will be an increase in demand for persons in the Professional, Senior Official and Technician categories such as Audiologists, Speech Therapists, Web Designers, Programmers, Physics Engineers and Surgical Technologists. Only 6 per cent ofthe employers indicated that they employed foreign workers which suggest that expatriates were not being employed at the expense of Jamaicans. In relation to persons with disabilities, 21 per cent of the employers reported that they had one such person in their organization.

Sharing with Stakeholders

This information will be shared with labour market stakeholders with a view to assist with policy formulation as it relates to career and educational planning. The Ministry plans to share the findings of the Labour Market Study through a series of sessions with Guidance Counselors in secondary schools and with Administrators in tertiary institutions island wide in the current financial year. In fact Mr. Speaker, the first of such workshops will be held in November 201 O. This workshop will target primarily Guidance Officers from the Ministry of Education. It will be a training of trainers' workshop where the Guidance Officers will then train the Guidance Counsellors in Secondary, All­Age and Primary and Junior High schools islandwide.

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Flexible Work Arrangements

• Mr. Speaker, I am pleased to announce that significant strides have been made in our

effort to implement flexible work arrangements in Jamaica. The Joint Select Committee completed its deliberations and submitted its report to Parliament In January 2010. This report has been approved by both Houses ofParliament. The process to amend restrictive provisions in legislations which are contrary to the principles of flexible work arrangements has now commenced. Mr. Speaker, we hope to complete the process in this financial year.

Productivity Improvement

• Mr. Speaker, historically Jamaica has been a low productivity country.

The Government and the Ministry of Labour and Social Security have long accepted the fact that Jamaica's productivity record over many decades must be reversed in order for us to achieve meaningful economic growth, create decent jobs, alleviate poverty and resolve our balance ofpayments problems. The alarming fact is that "Total Factor Productivity" in Jamaica has declined by 1.08 per cent per year between 1982 and 2008. By comparison, the Total Factor Productivity of Trinidad and Tobago rose by 1.79 per cent, while in St. Lucia it increased by 1.14 per cent over the same period. This clearly suggests that we have failed to efficiently optimise the use of our resources namely labour, capital, land, material, energy and information. The issue of productivity is complex and presents many challenges. Such complexity is born out of the fact that productivity is dependent on the collaboration of labour and capital for the efficient production of goods and the provision of services. The 12

involvement of Government in delivering public goods and services in an efficient and timely manner is also a key component. It has been reported that 75 per cent of Jamaican Companies have a difficulty in finding workers with good technical skills and 66 per cent reported that most workers lack basic skills. Jamaica's productivity is therefore hampered by a shortage of workers with the appropriate technical skills for the kind of innovation and creativity that is necessary. In this globalised environment, that is unacceptable. The objective

• f

the workforce must be "How can this job be performed better?" and not "How am I supposed to do this job?" We also require visionary management that understands that human resources are the most critical ingredient in facilitating productivity and that new methods, techniques and products must be explored. Low work ethic and worker disfranchisement are barriers to improved productivity. We must tum Jamaica into a "Productivity Improvement Nation" and one in which the fruits of productivity increases are equitably distributed. We need a national crusade for productivity improvement. The Jamaica Productivity Centre, the national organization mandated to promote and facilitate sustained national productivity growth is poised to assist the process. It will provide databases with both local and international benchmarking and best practice information and analysis to allow public and private sector improvement in productivity performance. The Centre will produce and use various combinations of presentations, publications, videos, radio programmes and newspaper articles to support its efforts to build a productivity conscious nation. What is therefore required is the willingness of the social partners to join in this thrust. I therefore call on employers, workers and their trade unions, the media, educational and training institutions and all other well intentioned Jamaicans to join in this crusade to improve and increase national productivity ifour nation is to survive in these challenging times.

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This Parliament and other stakeholders must embark on this complex and difficult journey ifJamaica is to have sustainable social and economic development.

Minimum Wage Advisory Commission

• Mr. Speaker, I now tum to the review of the National Minimum Wage and the

Minimum Wage for Industrial Security Guards. I have noted concerns about the delay in the implementation of increases to these wage rates as recommended by the Commission. There are several factors that must be taken into account in determining adjustments in the minimum wages. There must be a balance between the increase being considered and the consequences of such an increase. Given the current state of the economy, it is strongly felt that any increases at this time could result in a reduction in the number ofhours worked and, ultimately, job losses. The Members of the Minimum Wage Advisory Commission in their deliberations noted that the majority of participants at the consultation exercises expressed the desire for a Study to be undertaken to determine what constitutes a livable wage and in their report they have made that recommendation.

• Mr. Speaker, I have commissioned this Study 'To determine what constitutes a

livable wage'. The results of this Study wiH be used to inform us as to the way

• forward. Mr. Speaker, I propose that we wait for the completion of

this Study before implementing any further adjustments in the minimum wage rates. The Study is projected to be completed by March 2011.

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The International Programme for the Elimination of Child Labour

• Mr. Speaker, in February 2009, the Government of

Jamaica, in collaboration with the European Union launched the project Tackling Child Labour Through Education (TACKLE). Since that time, there has been a series of consultations across the island to assess the implementation and enforcement machinery to combat child labour in Jamaica. Another series of consultations are due to be undertaken to review the legislative framework to address this phenomenon. Sports is also being used as one avenue to prevent child labour. In this regard, mentorship and football clinics were held in certain inner city communities of Kingston, Spanish Town and Montego Bay during the summer. Three hundred children ages 12 to 16 are targeted to participate in these clinics. Over 1000 adults have been sensitized on the detrimental impact of child labour. Through these clinics, we have achieved some degree of capacity building for teachers, students and parents to combat child labour.

The Programme of Advancement Through Health and Education (PATH)

• Mr. Speaker, I tum now to the Programme of Advancement through Health and

Education (PATH) which continues to be the flagship social assistance programme of the Government ofJamaica through its investment in human capital. As at August, the number of persons benefiting stands at approximately 350,000. This represents an increase of

• ver 30 per cent over the number registered in April of
• 2009. Within this financial year, the programme is slated to achieve its goal of

registering 360,000 beneficiaries.

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PATH Focuses On Children

• Mr. Speaker, PATH is designed to help protect the most vulnerable and in need in the

society and we know that if one is healthy and educated, then the chance of that person living in poverty decreases significantly. The Programme seeks to break the intergenerational poverty cycle through a sustained emphasis on children and youth in poor households. In fact, over 75 per cent ofthe beneficiaries on PATH are children.

• Mr. Speaker, there seems to be some misunderstandings about PATH.

The programme targets the most vulnerable within specific categories, poor children, poor elderly, poor persons with disabilities, poor pregnant and poor breastfeeding women. Persons who are in the economically active age group are not targeted. So the man or woman who is 27 years old and physically able to do work will not be accommodated under PATH. These persons should not be on social welfare, we must provide them with the necessary support needed such as training, grants or soft loans so that they can enter the labour market. Some persons may tell you that they have been taken off PATH. This is not so. Persons are only taken off

ifthey die, migrate or in the case of

children, they graduate from high school. However, we are constantly monitoring the programme to maintain its integrity and occasionally we will find an NIS pensioner who is in receipt

• f PATH, or someone who has registered in two different names. We cannot have
• ne person registered twice, we have to remove one. If you are in receipt of a

pension you are not eligible for PATH but the other members of your household can still benefit. Adjustments to make PATH more responsive

• Mr. Speaker, over the past year the challenges brought about by the recession has

affected all of

• us. As a result, we have increased benefits to all beneficiaries under the
• programme. This year approximately $48 has been provided, an increase of 25 per

cent over last year's allocation. Mr. Speaker, there is no question that the programme

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is meeting performance standards. Parents are sending their children to school more than the 85 per cent ofthe required days per month. Some families, however, do not meet the conditionality established for the programme, and should have their benefit suspended. The Ministry, in keeping with international standards has introduced a minimum social protection floor whereby a minimum of J$400 per month per beneficiary is paid instead of suspending the entire benefit.

• Mr. Speaker, there is often complaint about the length of time that it takes to be

registered on the programme. In response to this problem, a new Management Information System has been introduced. Clients are now advised immediately of their status upon application at the parish level. There is also an Appeals process for those persons who believe their applications need to be reviewed. PATH addresses needs of the Disabled and Elderly Poor The Government has secured a Grant of US$2.6M from the Japanese Government and has embarked on an aggressive islandwide campaign to register disabled and elderly poor on PATH. Mr. Speaker, we have found that many persons in these categories who have not registered for PATH are unable to travel to the Parish Offices and have no form of support system to help them. Many of these persons are asset rich but income poor. Through this intervention, it is hoped that an additional 10,000 poor elderly and disabled persons will receive a PATH benefit.

• Mr. Speaker, I would like to pubJic1y thank the Government and people of

Japan for their support and wish to also thank the World Bank, which was instrumental in securing this Grant for the Government ofJamaica.

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Expansion of

the Steps to Work and Special Youth Employment and

Training (SYEAT) Programme

• Mr. Speaker, welfare cannot and will never be a way out of poverty. However we

believe that through programmes like PATH, with its strong emphasis on Human Capital Development, poor families will be better able to break the poverty cycle and provide a sustained livelihood for the generations to come. In this regard, we will be expanding our efforts to ensure that working­age members of poor households are provided with the opportunities to seek and retain employment through the Steps to Work Programme. The experience of the first six (6) pilot parishes in the last financial year has resulted in over 3,200 persons being provided with training opportunities in order to enhance their employability. We have also forged strong partnerships with other agencies such as HEART Trust, the National Youth Service, the Jamaica Business Development Corporation and the Jamaican Foundation for Life Long Learning. These partnerships have allowed clients in PATH households to better access the services that they provide at no cost. This year, over 5,000 PATH household members are being targeted.

• Mr. Speaker, the Ministry also has responsibility for the integration of
• ur youths into

the Labour Market. The Ministry in 2008 examined its mandate and instituted the Special Youth Employment and Training (SYEA T) Programme. The Programme targets young people in the age range 18 to 25 years giving them access to the job market through strategic partnership with the private sector. It also provides them with valuable job experience and so enables them to be equipped to advance in their careers. Since inception, the SYEAT programme has registered over 5,000 persons and it is anticipated that we will be able to register an additional 2,500. J$37M has been allocated in this year's budget to assist in delivering the required training and placement services for youths who come to the Ministry for assistance. 18

Of the number registered, over 50 per cent have completed their HEART Level I Certification making them employable. An active programme ofjob placement is

• n­going and the partnership with the private sector has enabled us to access jobs for

some. Although challenging, the SYEA T programme has measured success in building sustainable relationships with the private sector, ensuring that the clients that are served are able to access the opportunities as they arise. We want to take this opportunity to thank the employers who have been participating in this Programme and for giving our youths a second chance, one that they would not have had under normal circumstances. Successes recorded by these trainees are significant as they serve to motivate and encourage other youths to participate in the

• Programme. This has been as a result of employers believing in them and giving

them the opportunity to advance. The Ministry continues to be committed to the development of the youths, ensuring that they can secure for themselves a livelihood that can advance their lives and the lives of their families. As such we will continue to invest in the young and their future as it is known that this will ensure a better Jamaica for alL PATH as a Vehicle for Educational Advancement Since 2009, the Government has introduced a new benefit for persons living in PATH

• households. Children who have graduated from high school and are matriculating to

post secondary institutions are now eligible for a J$15,OOOgrant. This is an incentive to continue their education. J$IOM has been paid out to approximately 700 students last year. This financial year, the Ministry has budgeted J$45M for grants. Over 400 applications have already been processed. 19

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PATn Achievements This year, the Ministry was pleased to acknowledge the over 100 students who met the criteria for selection as top achievers with passes of 8 subjects or over in CSEC

• examinations. Some with as many as 11 subjects with distinctions. The achievements
• f

these students reflect not only the support of Government through PATH, but are a powerful indication of the investment of mothers and fathers in their children's

• future. This is a symbol of the pride and dignity of the true Jamaican spirit which

shines despite their socioeconomic status.

The National Insurance Scheme & Fund

• Mr. Speaker, I turn now to the National Insurance Scheme (NIS) which continues to

be a major component of the Government's Social Protection Programme. Social Insurance systems which provide a financial safety net for the elderly, such as the NIS, are under increasing pressures worldwide. Major demographic changes caused mainly by rising life expectancy, improved health care and lower birth rates have resulted in significant growth in the proportion of

• lder persons in the populations.

At present, the NIS provides benefits to approximately 95,000 pensioners. The projection is that this number will increase substantially in the coming years. The latest Actuarial Evaluation shows that by 2015, the number of pensioners is projected to be 121,000 and approximately 200,000 by 2035. According to STA TIN, Jamaica's current population of persons 60 years and over is estimated at 298,000 or approximately 11 per cent of total population. It is projected that by the year 2025 this number wiJ] increase to approximately 472,000 or 14.5 per cent of total popUlation, according to data from the Economic Commission for Latin America and the Caribbean (ECLAC). A person who is currently 60 years can expect to live for another 19 years in the case

• f

a man and 22 years in the case of a woman. Against this background, the payout to 20

NIS pensioners will continue to increase over time due to the maturity of the Scheme and the ageing of the population. The impact of the "baby boomer" phenomenon, which led to an increase in the birth rate in the 1940's is now evident in the fact that more is being paid for benefits than is being collected in contributions. In the last financial year (2009/2010), we collected approximately $5.51 B in contributions and paid out $9.16B in benefits, a net deficit

• f $3.65B. As a result, we have had to depend more on investment income to close

the gap. For the financial year 20091201 0, the National Insurance Fund (NIF) earned net investment income of $7.44B, up from $6.28B in the previous year. This shows an improvement in the performance of

• ur investment portfolio. This also represents an

increase of approximately 19 per cent in investment income, despite the reduction of interest income as a result of the Jamaica Debt Exchange (JDX) programme. The growing reliance on investment income means that the NIS will have to pursue more aggressive investment strategies for growth and profitability in the pension Fund, while ensuring prudence. This means that diversification ofthe present mix of investments will be important in the changing economic environment. The total value

• f the Fund as at March 31, 2010 was $62B, moving from $53 B at the end of

March

• 2009. This represents year to year growth of approximately 18 per cent in the net

assets ofthe Fund.

• Mr. Speaker, let me commend the National Insurance Board and Secretariat for their

prudent management ofthe Fund, particularly during the past year. Ensuring Viability and Sustain ability

• Mr. Speaker, we have introduced several reforms to ensure the long term

sustainability of the Scheme, while maintaining meaningful and relevant benefits for

• ur pensioners. One such measure was to lift the NIS Insurable Wage Ceiling (IWC)

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to $1 M per annum. The IWC was last increased 7 years ago in October 2003 from $250,000 to $500,000. The new IWC of$IM per annum became effective on August 2,2010. The contribution structure reflects an employee deduction of 2 per cent of income for the National Insurance Fund (NIF), and 0.5 per cent of income for the National Health Fund (NHF). These contributions are matched by the employer. The lifting of the IWC will, therefore, provide additional revenue to both the NIF and the NHF. The additional contributions to be gained will increase the pool of funds to be invested, and will help to ensure that pensioners are provided with better benefits in the future. We have also increased the flat rate contribution made by Domestic Workers, Voluntary Contributors and Self­Employed persons from $20 to $50 per week. The method by which Members of Parliament and Jamaica Defence Force soldiers contribute to the NIS has also been changed. Instead of contributing at the Flat Rate, they will now contribute to the Scheme at the same rate as other employed persons through payroll deductions.

• Mr. Speaker, another major reform of

the NIS which will be addressed is the disparity in the qualifying age to receive the NIS retirement benefits for females and males. This anomaly has persisted for too long. Currently, females and males qualifY to receive their NIS retirement benefit at different ages, 60 for females and 65 for males. Cabinet has approved the unification of the NIS retirement age to allow both females and males to receive the benefit at age 65. The female retirement age will be gradually adjusted over five years, commencing January 20 II. This will ensure that women who are closer to the existing retirement age of 60 years will not be required to wait the full five years to receive their benefit. The adjustment of the qualifYing age for receiving benefits is one ofthe major reform measures that are being implemented in social security systems worldwide to address the effects of the changing demographics. 22

Another major adjustment is the substantial increases in the levels of NIS benefits since July 1,2010. These benefits were last increased in April 2008. Earlier this year, I provided details to this Honourable House about the ranges of these increases. As a result of these increases, approximately $11 B will be spent on benefits this year, compared to $9B last year. Pensioners will be pleased to also know that the annual renewable benefits under the NIGOLD Health Plan have been improved. This will see increased limits for Prescription Drugs, Diagnostic Services and Dental & Optical Services. Mr. Speaker, in order to safeguard and protect the integrity of the NIS, we have embarked on a special project to recertify our pensioners. The main objective of this exercise is to minimize or prevent leakages. Our pensioners and their agents can therefore expect to be visited by officers of the Ministry. All pensioners will be required to register with the Electoral Office of Jamaica in

• rder to receive their new NIGOLD Health Cards. These cards will be used to access

NIGOLD benefits as of April 20 II, and will also serve as identification cards for our pensioners.

• Mr. Speaker, the Honourable Prime Minister observed in his Budget presentation last

year that the Fund was in a precarious position and was likely to become bankrupt if certain corrective measures were not taken. The Actuaries have advised that the reforms that have been introduced will ensure the viability and sustainability of the Fund up to 2035. Mr. Speaker, this is a demonstration of vision, responsibility and prudence. Non-Compliance

• Mr. Speaker, the effect of these reforms could be nullified if compliance is not at a

satisfactory level. Recently there have been a lot of discussions about funds not being 23

remitted to the NIS. In last week's Public Accounts Committee (PAC) meeting, the Sugar Company of Jamaica was cited as owing J$430M to the NIS. This amount represented an accumulation of non­remittance ofNIS contributions since 1997. Since this government assumed office, it became clear that non performing government entities could no longer continue to be a burden on the budget, hence the policy of divestment. At the first meeting of the Cabinet after assuming office in 2007, upon close examination, it was decided that in order to tidy up the mess that persisted for many years the government would assume the indebtedness of the SCJ to the NIS.

• Mr. Speaker, it is unfortunate that a bad situation persisted for so long without the

previous administration taking the required steps to address the situation. We were bold enough to take the necessary steps and put in place arrangements to protect sugar workers of this country. It is to be noted, Mr. Speaker, that most of the sugar workers are elderly persons who have been working in the sector for many years and are now approaching retirement. The decision of the Government to assume the indebtedness of the SCJ is to protect the interest of these workers. I want to announce Mr. Speaker, that the sugar workers who have contributed to the NIS are covered because of the action of this Government. So I would ask that they check with the NIS offices island wide to find out their status within the scheme. Taking Non­Compliant Employers to Court

• Mr. Speaker, heavy weather has also been made of

the fact that some employers have been neglectful in paying over NIS contributions which have been deducted from employees' salaries. In the Ministry, there is a two­pronged approach to recovering the amounts due and ensuring that the employee can receive his benefit at retirement. 24

Firstly, the Compliance department of the Ministry uses moral suasion and, where this is unsuccessful, legal action is pursued. Secondly, the employee has the option of making a civil claim in the Resident Magistrate's Court under Section 48 of the National Insurance Act to recover hislher lost benefit. The amount which is recoverable is 12 Y2 times the annual old age pension payable at the date of

• entitlement. The 12 Y2 times used is the average life expectancy of a person after
• retirement. This currently amounts to approximately $1.5M. Where an employer

deducts the money but fails to pay it over, criminal proceedings can be instituted against him. Ifconvicted, he can be fined or face imprisonment.

Centenarians

• Mr. Speaker, as I noted earlier, we are living in an ageing society. It is within this

context that special recognition is given to persons attaining 100 years. According to ST A TIN there are over 1,000 centenarians in Jamaica. It is believed that some are as

• ld as 113, 115, 116, 118 and maybe older.

Since 1999 (the International Year of Older Persons) there has been a drive to identify persons who are 100 years and older. The Ministry has held several functions in recognition of these milestones. Those centenarians born prior to January 1908 are provided with a Special Pension under the NIS. They are also provided for under the NIGOLD Health Plan. Other centenarians are accommodated under PATH, and are assisted under the Jamaica Drugs for the Elderly Programme (JADEP).

Persons with Disabilities

• Mr. Speaker, Persons with Disabilities (PWDs) represent an integral part ofthe labour

force. Many of them have been exposed, and have developed a wide range of competencies. They constitute a national resource, which has not been fully harnessed over the years because of lack of

• pportunities. In this year's budget, over

$100M has been dedicated to empowering persons with disabilities. 25

• Mr. Speaker, of this figure $) 5M will go toward grants to the various voluntary
• rganizations providing various types of services for persons with disabilities while

$IOM has been allocated for grants to PWDs to start their own small businesses. Additional resources have also been allocated for skills training. Each year the Ministry has afforded employed persons with various levels of disabilities the accommodation for income tax exemption. In 2009, 95 persons were granted income tax exemptions and 57 persons for this year, to date. This includes all categories of workers. These income tax exemptions amount to millions of dollars which the Government is foregoing as revenue collection in order to provide for PWDs. The Abilities Foundation has strengthened its programme of vocational training for PWDs to prepare them for the labour market. Currently there are over 100 PWDs pursuing HEART training courses at the Foundation. The challenge before us today is to bring Jamaicans together to fully include PWDs in the productive sector. There can be no other way towards sustainable development that will benefit and improve their lives. While we emphasize this inclusion we need the private sector to be on board as currently the Government is the largest employer

• fPWDs. We need more companies in the private sector to recognize that PWDs can

work and participate in the productive sector.

Conclusion

• Mr. Speaker, in concluding, I must emphasize that access to decent employment and a

stable industrial relations environment will help unlock the potential for creating a Jamaica "the place of choice to live, work, raise families and do

business': in keeping with the Vision 2030 Jamaica National Development Plan.

The Ministry will continue to provide the platform for policies and training to facilitate this VISIOn. The Ministry will place stronger emphasis on providing assistance for the poor and vulnerable in the society.

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A lot of what has been achieved to date has resulted from the mature partnership developed between employers, trade unions and the Government. Despite our disagreements at time, I am sure no one can disagree about the extent to which our deliberations have redounded to the benefit ofJamaicans over the years. I have enormous faith in this process of engagement and will work to modernize the Ministry to the whole process of transformation to address the global challenges facing us. It is in this context that I want to express thanks to the tripartite partners and look forward to continued collaboration. The Ministry is committed to the task ahead. We are aware of the dynamic changes in the world, but believe that the people of Jamaica have the innate potential to

• succeed. Thank you.

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