Published On: Sat, Feb 22nd, 2020

IMF: “Remove restrictions to hire foreign workers”

Former Labor Office Building - front

Obscure Labor Tripartite Consensus Document from 2016 surfaces in new work permit policy debate ~

PHILIPSBURG – When representatives of employers, unions and government signed the Labor Tripartite Consensus Document on August 30, 2016, St. Maarten finally seemed to have established the foundation for the modernization of its labor market. By now, it seems that this document is all but a dead letter, given the – no doubt well-intentioned – initiative of current Labor Minister Pamela Gordon-Carty to establish a new work permit policy.

The Consensus Document carries the signatures of employers-representatives like Brian Deher, Paul Henriquez and Damodar Rawtani, unionists like Claire Elshot, Ernesto Lake and Julia Solognier and government representatives like Minister Emil Lee, Len Dijkstra and Linda Froston who is currently on the team of Minister Gordon-Carty.

With such broad consensus, one would think that the direction the document indicated for the labor market’s future would be secured. To examine whether this is a true or false statement, let’s have a look at what the labor tripartite agreed on back in 2016. The document also detailed changes to the civil code to curb the abuse of short term labor contracts; leaving that aside, the tripartite expresses in this document “the urgent need for labor reform” and that this topic should have “utmost priority” on the minister’s agenda for the years 2016, 2017 and 2018.

This does not mean that the document’s validity ended in after 2018; it is currently still on the table, but its existence is also ignored. Creating more flexibility and security in the labor market as well as the promotion of voluntary mobility and productivity were the core points of departure in 2016.

IMF headquarters in NYUnderpinning these ambitions are, among other things, recommendations from the International Monetary Fund (IMF). “Increasing growth and resilience to (external) stressors requires dealing with long-standing structural bottlenecks such as stifling red tape and inflexible and dysfunctional labor markets,” reads one IMF-observation that is part of the consensus document.

An IMF country report labels “a dynamic private sector as the linchpin of sustained growth in the medium term” and that this requires “tackling the maze of permits and licenses which has hampered investment and innovation.”

“Restrictions to hiring foreign workers should be removed,” in the opinion of the IMF.

And while Minister Gordon-Carty said last week that she does not need data, the IMF emphasizes in its report the need to improve the statistical infrastructure and data. “They are presently not adequate for effective macro-economic analysis, surveillance and policy response.”

SER St. MaartenThe consensus document also contains references to a Social Economic Council report entitled Flexicurity for Sint Maarten. Published in 2014, this report states that the local labor market lacks flexibility.

According to this report, limited retirement entitlements and difficulties in transferring employer-bound pension schemes to the next job inspire employees to stay put. The labor market also lacks flexibility for employers to dismiss employees in case of reduced production. The procedures to fire non-performing employees are “overly complicated,” according to the SER, although employees need sufficient protections because “motives for dismissal (in case of non-performing) may be “far more subjective” than for dismissal based on economic grounds.

The consensus document states explicitly that members of the tripartite “agreed to review the legislation and procedures with regard to the employment permit policy” and that they “intend to comply with today’s reality in the labor market and provide flexibility in those areas needed.”

With the consensus document as its guiding principle the labor department was expected to come up with concrete proposals to turn intentions into applicable law. Why this never happened is anybody’s guess but it seems that under Minister Gordon-Carty the ministry is choosing a way forward in the opposite direction.

Photo caption: Former Labor Office building on the Pondfill. File photo.


Related articles:
Minister Gordon-Carty’s new conditions for an employment permit
Minister Gordon-Carty talks about work permit policy and abuse
Former Minister Emil Lee: “New policies should be based on facts and consultation”
Following procedures the new norm?



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