VZCZCXRO3768
PP RUEHGR
DE RUEHKG #0648/01 2401735
ZNR UUUUU ZZH
P 281735Z AUG 09
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC PRIORITY 8007
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEATRS/DEPT OF TREASURY WASH DC
RUEHLO/AMEMBASSY LONDON 0612
RUEHOT/AMEMBASSY OTTAWA 2421

UNCLAS SECTION 01 OF 03 KINGSTON 000648 
 
SIPDIS 
SENSITIVE 
 
STATE FOR WHA/CAR (JMACK-WILSON) (BALVARADO) (VDEPIRRO) (WSMITH) 
WHA/EPSC (MROONEY) (FCORNEILLE) 
EEB/ESC/IEC/EPC (MCMANUS) 
SANTO DOMINGO FOR FCS AND FAS 
TREASURY FOR ERIN NEPHEW 
INR/RES (RWARNER) 
 
E.O. 12958:  N/A 
TAGS: ELAB PGOV ECON EIND EFIN SCUL SOCI ASEC JM XL
SUBJECT: JAMAICA: AUGUST LABOR REVIEW, PUBLIC SECTOR UNREST GROWS 
 
REF: A. KINGSTON 581 
¶B. KINGSTON 504 
¶C. KINGSTON 631 
¶D. KINGSTON 638 
¶D. KINGSTON 471 
 
Summary and Conclusion: 
 
¶1. (U) -- Prime Minister (PM) Bruce Golding reiterates promise not 
to cut public sector jobs despite Government of Jamaica (GOJ)'s 
worsening financial prospects. 
-- National Workers Union (NWU) President Vincent Morrison expresses 
skepticism toward PM's promise, expects GOJ austerity measures to 
lead to public sector job losses. 
-- Public sector workers to begin receiving enhanced fringe benefits 
in September. 
-- Caribbean Cement Company unable to meet monthly payroll on time; 
hotel workers union claims "union busting." 
 
¶2. (SBU) As Jamaica's economy continues to be buffeted by the 
effects of the global economic slowdown, the potential for labor 
unrest becomes more and more likely.  The GOJ is attempting to 
navigate the crisis through budgetary cuts and, potentially, an IMF 
loan while avoiding widespread public sector job cuts that might 
spark social unrest.  However, public and private sector workers 
might nevertheless come to feel that labor actions represent their 
only avenue of redress in an economy that seems to be spiraling out 
of control.  End Summary and Conclusion. 
 
Golding Promises To Maintain Public Sector Jobs 
--------------------------------------------- --- 
 
¶3. (U) In his remarks before a newspaper editorial forum on August 
25, the PM sought to alleviate fears that his August 20, 2009, 
mandate that GOJ ministries cut 2009/2010 budgetary expenditures by 
20 percent would result in public sector job losses.  Faced with the 
island's most daunting economic crisis since the 1930s and a 
deteriorating balance of payments situation that is likely to force 
a return to the International Monetary Fund (IMF) for the first time 
since the 1990s (Reftel A), the PM affirmed that the GOJ's revenue 
shortfalls - over USD 113 million since April - had forced it to 
temporarily defer payment on some USD 90 million in goods and 
services contracts with private businesses.  The GOJ ministries are 
to have their proposed expenditure cuts in to the PM by August 
28,2009, with the revamped budget expected to be presented to 
Parliament in early September. 
 
¶4. (U) Golding described the public sector guarantee as a 
"trade-off," given that his Jamaica Labour Party-led (JLP) GOJ had 
reneged on a promised seven percent public sector wage increase 
earlier in the year.  Nevertheless, the PM still pledged to reduce 
the 117,000 strong civil service - the wage bill for which consumes 
almost 11 percent of Gross Domestic Product (GDP) - through early 
retirement or voluntary redundancy programs.  The PM acknowledged 
that the two year-old JLP GOJ had failed to prevent the annual 
public sector wage bill from increasing by over USD 460 million 
since 2007.  Maintaining that "[g]overnment is not simply there to 
employ 117,000 people," Golding set as a medium term goal the 
reduction of public sector employment to around nine percent of GDP 
through voluntary cuts and economic growth. 
 
¶5. (U) At an August 26 press conference at Jamaica House, Golding 
and Finance Minister Audley Shaw appeared defensive in responding to 
criticism from labor union leaders representing police and teachers. 
 "There are senior police officers whose salaries exceed that of 
some of my ministers," Golding noted, while Shaw pointed out that 
teachers had seen a 65 percent increase in their salaries since 
¶2007. 
 
Labor Unions Wary of GOJ Promises 
--------------------------------- 
 
¶6. (U) Golding's reassurances were met with skepticism by trade 
unions representing civil servants.  Morrison, whose NWU is 
affiliated with the opposition People's National Party (PNP), 
insisted that, given the magnitude of the proposed expenditure cuts, 
Golding's GOJ would have no choice but to lay off government 
employees.  "We have heard the Prime Minister say no job cuts," 
Morrison told the Jamaica Observer newspaper, "but the Prime 
Minister has said many things in the past and they don't hold." 
Despite Golding's statements, Morrison alleged that GOJ ministries 
were "collecting information pertaining to employees' years of 
service, attendance, and a number of other questions which seem like 
 
KINGSTON 00000648  002 OF 003 
 
 
staff cuts in the public sector is imminent." 
 
¶7. (U) Implying that public sector job growth under the JLP was the 
result of political cronyism and an overabundance of consultants, 
Morrison called on the GOJ to use the proposed IMF funding for 
public works projects rather than to stabilize Jamaica's balance of 
payments as a means of bolstering employment and stimulating the 
economy. 
 
¶8. (U) Similarly, Sergeant Raymond Wilson, Chairman of the Police 
Federation representing rank-and-file members of the Jamaica 
Constabulary Force (JCF) reiterated that the police union was 
refusing to accept the wage freeze as presented. 
 
GOJ Bracing For Protests 
------------------------ 
 
¶9. (U) Meanwhile, Arthur Williams, the Minister of State in the 
Ministry of Finance and the Public Service (MOFPS), told an August 
24, 2009, meeting of the Jamaica Confederation of Trade Unions 
(JCTU) that public sector employees would begin receiving increased 
fringe benefits such as clothing and vehicle allowances in their 
September paychecks (NOTE: Traditionally, a major portion of 
Jamaican remuneration packages have consisted of fringe benefits and 
allowances.  Reftel B.  END NOTE), but that the public sector wage 
freeze that went into effect March 31, 2009, would remain in place 
due to the GOJ's financial straits.  Williams pledged that arrears 
for the period April, 2008, to August, 2009, would be postponed 
until the first quarter of the 2010-2011 financial year. 
 
¶10. (U) In response, the Union of Schools, Agricultural and Allied 
Workers (USAAW) announced its intent to issue a 10-day ultimatum to 
the MOFPS demanding that past commitments be honored. The union 
represents administrative and maintenance staff at several public 
schools and community colleges, as well as railway workers and 
municipal employees.  The Jamaica Teachers Association (JTA) had 
previously intimated that it was considering a strike that might 
delay the September 7 beginning of the school year in response to 
the GOJ's failure to make good on promises of back pay (Reftel C). 
 
Cement Employees Paid Late, Hotel Workers Claim Union Busting 
--------------------------------------------- ---------- 
 
¶11. (U) The private sector Caribbean Cement Company (CCC) notified 
its employees on August 24, 2009, that it would be unable to make 
its monthly payroll on time, promising instead to try to pay its 
workers no later than August 28, 2009.  In announcing the delay, CCC 
management blamed cash flow problems resulting from "sustained 
contraction in the economy" and poor sales due to import competition 
and slowdowns in the construction sector, but insisted that it 
remained committed to the welfare of its employees. 
 
¶12. (U) However, Navel Clarke, General Secretary of the Union of 
Clerical, Administrative and Supervisory Employees (UCASE) that 
represents over 80 CCC employees, was not convinced of CCC 
management's sincerity.  "On a matter of principle, the company 
should have given the workers more notice," Clarke noted, although 
it appeared unlikely that the union would propose a strike over the 
issue. 
 
¶13. (U) Meanwhile, 320 employees of Montego Bay's Iberostar Rose 
Hall hotel were laid off on August 27 when management decided to 
temporarily shutter the resort due to occupancy levels that had 
fallen to sixteen percent.  Although the Spanish-owned Iberostar 
announced no plans to close its other Jamaican resorts, Lambert 
Brown, president of the University and Allied Worker's Union (UAWU) 
that represents many of the resort's employees, nevertheless decried 
the move as union busting.  "Had it not been," Brown claimed, "they 
would have come to discuss the issue with us." 
 
Conclusion 
---------- 
 
¶14. (SBU) As Jamaica's economy continues to be buffeted by the 
effects of the global economic slowdown, the potential for labor 
unrest becomes more and more likely.  The GOJ is attempting to 
navigate the crisis through budgetary cuts and, potentially, an IMF 
 
KINGSTON 00000648  003 OF 003 
 
 
loan while avoiding widespread public sector job cuts that might 
spark social unrest.  Given massive job losses in other sectors in 
recent years - 50 percent in the sugar industry, 60 percent in 
bauxite mining (Reftel D), and 90 percent in construction - as well 
as fears for the tourism industry and the likelihood that the 
impending privatization of Air Jamaica will result in layoffs as 
well (Reftel E), the GOJ is hesitant to do anything that might lead 
to a rise in unemployment. However, public and private sector 
workers - pressured by inflation, frustrated by wage freezes, and 
impatient over delayed arrears - might nevertheless come to feel 
that labor actions represent their only avenue of redress in an 
economy that seems to be spiraling out of control.  End Comment. 
 
Parnell