Published On: Fri, Feb 18th, 2022

Avoid salary-reductions at all cost, labor union says

PHILIPSBURG — The St. Maarten Communication Union (SMCU) has asked Prime Minister Silveria Jacobs in a letter dated February 16 to provide a template or a format that makes clear to government-owned companies how they have to implement the 12.5 percent reduction on labor conditions for their employees. According to SMCU-chairman Ludson Evers it is unclear whether a part of those reductions can be applied to salaries.

“A direct reduction of salaries should be avoided at all cost,” Evers wrote to the prime minister.

He also asks in his letter until when the ordinances that regulate the reductions are valid. The answer to this question appears from the ordinances as they have been published on the Parliament’s website and in the National Gazette: “Until further notice.” In other words, there is no set date; the measures will remain in place until the ordinance is withdrawn.

There is no clear answer to the union’s other question (whether the reductions can be applied directly to salaries). The legislation speaks of cuts in the “total package of labor conditions” (which includes salaries), while the government states in the explanatory memorandum with the relevant ordinance that “basic salaries are completely spared.”

On May 15, 2020, the Kingdom Council of Ministers conditionally granted St. Maarten its second tranche of liquidity support. The government agreed with the conditions. One of the conditions was, as quoted in the relevant ordinance: “A 12.5 percent reduction of the total package of labor conditions in the public sector.”

The explanatory memorandum with the ordinance states the government has “done everything possible to prevent that the reductions affect basic salaries.” Against that background, the memorandum states, the government considers the reductions proportionate because “the monthly basic salaries are completely spared.”

The reductions apply since July 1, 2020, to vacation-allowances, salary-increases and overtime. As long as the ordinance is in place, the right to vacation-allowances has been frozen. Salary-increases have been frozen until further notice starting from the calendar year 2021 and civil servants who are above scale 10 do not get any payment for overtime; the same applies to managers.

The temporary national ordinance adjustment labor conditions for the (semi-)public sector was submitted to parliament on January 22, 2021.

However, almost a year earlier, on May 19, 2020, the parliament grudgingly agreed to the conditions for receiving liquidity support. A day later, the Minister Plenipotentiary reported to the Kingdom Council of Ministers that St. Maarten “unconditionally agreed” with the conditions.

The reductions could theoretically still touch the basic salaries of workers in the (semi) public sector if other measures do not add up to 12.5 percent. The bottom line is the legal minimum wage that was in place per July 1, 2020. Until further notice, salary-increases are not allowed.


Letter SMCU to Prime Minister Silveria Jacobs