Irresponsible trade unionism at BEC

First Published: 2004-02-13

(Note: The following is an abridged version of four editorials appearing in The Tribune between January 26 and January 29, 2004)

In mid-January 2004 Bahamas Electrical Union President Dennis Williams warned Prime Minister Perry Christie that his members would not be intimidated by "personal attacks." Mr. Williams, whose union is in dispute with BEC management over a new industrial agreement, claimed that Mr. Christie had "threatened" him. He based his claim on two statements made by the Prime Minister. The first was during a live TV show – "The Prime Minister Speaks" – when Mr. Christie was questioned by the press. The second was made at the PLP convention in November 2003.

During the television show Mr. Christie, speaking on the current labour unrest, said: "This country cannot afford to have any one group destroy it."

And at the PLP convention he had said: "Threats and illegal work stoppages and acts of sabotage have no place in the modern arsenal of responsible trade unionism. Instead, we need to restore discipline, restraint and mutual goodwill as the central virtues of industrial relations in our country."

This was a message to all union leaders and their members. We read and re-read the prime minister's statements, trying to find a threat, particularly a specific threat to Mr. Williams. Thinking we had missed something, we got out our magnifying glass and went once again in search of that elusive "threat." But the slippery eel kept eluding us. All we could find was very sound advice by a prime minister who is concerned for his country and its citizens. Mr. Christie threatened no one.

Mr. Christie urged "discipline, restraint and mutual goodwill" as the "central virtues of industrial relations in our country." Apparently Mr. Williams had a problem with that since he threatened to pull the switch and throw this island into darkness for Christmas if BEC did not address his proposals.

Pay and productivity. The government's objective at BEC is to raise standards with an incentive programme. In the future salary increases are to be based on productivity – no work, no pay. BEC offered its workers from three to eight percent increases each year, but only for those who produce efficiently.

This is not government's first attempt to introduce an incentive programme. Every June BEC workers get a 3.4 per cent increase. They are only supposed to receive this if their performance is top of the line. However, this "incentive" increase soon became automatic, with no reference at all to employees' output. So one might say that BEC staff already has had a free ride with some giving nothing in return – and being paid to get away with it.

And so, if the union's proposed seven per cent salary increase goes through and is joined by the 3.4 per cent "incentive" pay already in place, for the first year of the contract – 2003 – staff will be receiving an increase of 10.4 per cent.

The union has agreed to government's incentive plan to improve productivity, but it doesn't want this plan to kick-in before 2006.

National Insurance and pensions. Working Bahamians who participate in insurance programmes, especially National Insurance, know that, although their employer pays the lion's share, they have to contribute to the programme.

BEC employees have a good pension plan to which they contribute nothing – the corporation pays it all. Staff members also have a major medical plan. Here again they contribute nothing. The corporation pays it all. The employee only pays for whatever family member he might add to the plan.

The pensions at the Water & Sewerage Corporation are 0.5 per cent higher than those given by BEC. Like BEC staff, Water & Sewerage employees make no contribution to their pension plan. But, unlike BEC that generates enough revenue from taxpayers' rates to underwrite its own pension scheme, the water corporation does not. The corporation's pension is paid by the Public Treasury.

Mr. Williams' union believes that BEC employees' pensions should be on a par, or even higher than those of the water corporation. And so the electrical union is demanding an increase of 1.0 percent, which will bring its pension scheme up to 2.5 per cent.

At present BEC pays 13 per cent of staff salaries into the pension fund and in 2000 it is reported that the BEC pension fund had $109 million in its account. Although BEC did pay 13 per cent into the fund, it now must pay 18 per cent because there was a shortfall in the pension's investment portfolio. BEC now has to make up the difference; but remember the BEC staff still contributes nothing.

Now the electrical union wants to increase BEC's payment by 2.5 per cent. This is the equivalent of paying between 27 and 28 per cent of staff's salaries into the pension fund. The corporation wants the pension scheme to remain as it is.

Retirement benefits. If Mr. Williams gets what he wants, an employee after 30 years service can retire on full pension, which is two-thirds of his salary. BEC contends that this increase would push the corporation over the top – it simply cannot afford it.

Age sixty is the current retirement age. However, BEC workers can now retire after 35-36 years service. But Mr. Williams wants full pension after 30 years of service.

In addition, if an employee has been with BEC for 30 years and then dies his or her beneficiary is entitled to the full pension for 10 years after the death. This provision has been made retroactive to four years so that beneficiaries of all 30-year employees dying in that four-year period are entitled to the same 10-year pension.

Salary increases. The average BEC worker's salary is $35,000 a year. Secretaries can make between $36,000 and $37,000 a year. On average cleaning ladies make $2,000 a month, but some months they can make more.

As for salary increases, the union wants a 7 per cent increase for the year 2003. We don't think that the 3.4 per cent increase given every June should be forgotten. The 3.4 per cent was meant to go only to those staff who improved their production. However, the incentive to produce got lost somewhere between the floor boards; and now we are told that the 3.4 percent is automatically paid to all staff members – even to those who only show initiative in shirking their duties. And so, instead of a bonus, this should be taken away because it is not being used for the purpose for which it was intended. Or, if kept, it could be included as part of a properly managed incentive program, or even considered part of the proposed increase, which has been paid in advance.

This year – 2004 – the union wants a six per cent salary increase and in 2005 another 5 per cent. Again let's not forget that wayward 3.4 per cent that is being automatically paid out, not in the way that was intended.

Nor must we forget that every year's increase in salaries raises BEC's payment to the pension fund. No wonder BEC sees its costs spinning out of control.

In response BEC has offered a 3 per cent salary increase for 2003, and a $2,500 lump sum to be paid this year – 2004. The corporation has also agreed to do an evaluation of its technical staff to regularize their salaries, which will give them an additional wage increase.

Entry level at BEC which demands few qualifications – possible five BJCs – is $20,500 for technical staff and $15,000 for clerical staff. But this is the interesting item – cleaning ladies, whose only qualification is to know how to hold a broom are employed at a higher salary level than clerical staff. They start at $17,200 a year.

Of course, these figures do not include overtime, nor do they include the incentive programme of $785 paid out every June, whether staff does their jobs or not.

As they move up the ladder and their overtime is added, some of these people are making more than highly qualified doctors, teachers and nurses.

No wonder so many Bahamians want to share in easy street and join BEC. We understand the corporation has 3,000 job applicants on file.

New benefits. Mr. Williams wants BEC to pay scholarships for all staff's children who qualify; and as icing on the cake, he wants electricity rates to be further reduced for his members and a $1,500 bonus to be added to their Christmas packet.

Double dipping on sick leave. What is not generally known is that when ill, BEC staff is allowed to "double dip." BEC pays the full medical plan and National Insurance for its staff. The only contribution a staff member makes is if he requests that a family member be added to his medical insurance.

When BEC staff members are ill, they take their full allowance from National Insurance, and also from their private medical plan. We understand that BEC makes no reductions – as it should – from the private insurance reimbursement. Therefore, staff get full benefits form both schemes for eight weeks of sickness a year. This suggests that it pays to be sick at BEC.

The cost of the union demands. The last union contract signed by BEC cost the corporation $10.5 million. We understand that if BEC caves in to all of the union's demands on the five year contact now being negotiated, it will come with a $52 million price tag.

While BEC staff is trying to push costs up, they seem to be oblivious to what is going on elsewhere…to the adverse consequences of their actions. The Tourism Taskforce in April 2003 and other sources since then have shown that the Bahamas is pricing itself out of the tourism market in part because its electricity rates are the highest in the region.

And as every businessman in this country knows, if they want to stay in business, a generator has to be a part of their plant because of BEC power outages that seem largely related to maintenance problems at BEC. With BEC's good salaries, and incentive programmes, no piece of equipment should break down for lack of maintenance. Today these workers even drive air-conditioned trucks.

BEC staff has the best of the best; and the union is intent on keeping it that way…even at the expense of the consumer and tourist.

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