FWSC Response to GMA Claim

 

 

 

 

 

 

 

 

 

 

 

1.0 INTRODUCTION:

The attention of the Fair Wages and Salaries Commission (FWSC) has been drawn to the press statement issued by the Ghana Medical Association (GMA), on the matter of payment of Conversion Difference to their members.

We are compelled to respond to GMA’s statement in order to let the good people of Ghana know the facts.

It will be recalled that at a meeting of the Public Services Joint Standing Negotiating Committee (PSJSNC), a media truce was declared on the current labour agitations in order to dispassionately attempt to find a solution to the various post-migration challenges.

The public would bear us out that since that decision was taken, the FWSC has tried to observe the truce.  The same cannot be said of some of the labour unions and associations who have decided not to respect that truce but also have taken advantage of the truce to wage a media campaign to prosecute their side of the story.

Following the press statement by the GMA, the FWSC now feels obliged to set the records straight by responding to the issues therein that we deem as misinformation in order to set the records straight.

In this regard, the FWSC responds to the GMA’s press statement as follows:

2.0 WHETHER OR NOT THE GHANA MEDICAL ASSOCIATION (GMA) IS ENTITLED TO THE PAYMENT OF CONVERSION DIFFERENCE:

1. The FWSC stands by its position that the GMA is not entitled to any Conversion Difference.

2. A Conversion Difference (referred to under the previous Ghana Universal Salary Structure (GUSS) as ‘grandfathering’) is part of the Single Spine Pay Policy and is paid to a jobholder when upon migration it is found that his/her previous basic salary is more than what he/she is to take on the Single Spine basic salary.  The jobholder is given Conversion Difference in order that he/she is not made worse off upon migration.

3. Conversion Difference, technically, means that such a jobholder was being over paid under the previous salary regime.  However, in order that the jobholder is not made worse off, the difference between his previous basic salary and the Single Spine basic salary is paid to him/her.  This implies that the jobholder will have to “mark time” for others on the same grade to catch up with him/her.

4. “Marking time” means that the amount credited to him as Conversion Difference would gradually reduce until it is cleared off.

5. As an example, a jobholder who was earning GH¢3,007 on a previous salary structure and is to earn GH¢1,825 on the Single Spine Salary Structure (SSSS), will be paid the GH¢1,825 plus a Conversion Difference of GH¢1,182.  If in the following year the Single Spine basic salary increases to GH¢2,000, the said jobholder will have to take the new Single Spine basic salary and in addition take a Conversion Difference of GH¢1,007.  The Conversion Difference will therefore continue to reduce until the Single Spine basic salary gets to the GH¢3,007 that the jobholder was taking before migration.

6. In the process of migrating jobholders and institutions from their previous salary structures to the SSSS, the FWSC was confronted with challenges in the Health and Education (Tertiary) Sectors.

7. In the case of the GMA for example, the doctors’ previous basic salary was a consolidated salary comprising their basic salary under the Ghana Universal Salary Structure (GUSS), and the Additional Duty Hours Allowance (ADHA), which became the Health Sector Salary Structure 1 (HSS1).  Thus, the doctors’ previous basic salary prior to migration onto the SSSS could not be considered as an over-payment, because it had in it an element of premium to cater for their extra hours.

8. For this reason, giving them Conversion Difference which by definition is supposed to erode with time would mean eroding their extra hours.  This means they would be made worse off.

9. To overcome this challenge, the parties agreed to introduce the Interim Market Premium instead of paying Conversion Difference to the doctors.  This became necessary because if it was called by any other name, connoting an allowance, it could create a problem where others would demand same, knowing that negotiations of new allowances had been frozen.

10. The Interim Market Premium was computed using the extra hours medical officers do as a proxy.

11. Following disagreement over the applicable rates and the Ruling by the National Labour Commission, the doctors were awarded market premium of 100% and 120% of their basic salaries depending on whether the doctor is a junior or senior medical officer by the agreed classification.  Therefore, using our previous example, a medical officer earning GH¢3,007 when migrated onto the SSSS was paid GH¢1,825 plus a market premium of 100% or 120% of his basic salary.  In this example the said medical officer falls into the 120% bracket.

12. This medical officer under SSSS was paid GH¢1,825 Single Spine basic salary plus a Market Premium of GH2,190.  This brought the total salary to GH¢4,015 from his previous consolidated salary of GH¢3,007.  In effect, the doctor had made a significant gain of GH¢1,008 on his total compensation.

13. At the time of migration, not even one medical officer was entitled to Conversion Difference.

14. The Controller and Accountant General’s Department (CAGD) had been advised and trained on how to input the information regarding payment of doctors on the SSSS.

15. At the time of payment, however, because the CAGD system has been programmed to pay only Conversion Difference at this stage of the SSSS implementation and also because by law Social Security can only be paid on basic salaries, the system could not pay the Social Security on the old basic salary.  This was because the old basic salary was considered by the system as not earned.

16. Owing to the challenge, the CAGD did not revert to the Ministry of Finance and the FWSC; and the system paid the doctor the Interim Market Premium plus a Conversion Difference on top once it recognised a reduced basic salary.

17. In our example, the Controller and Accountant-General’s Department’s system therefore made the payment to the medical officer as follows:

Basic Salary -   GH¢1,825

Market Premium -   GH¢2,190

Conversion Difference -   GH¢ 1,182

Total = GH¢5,197

18. In addition, owing to the fact that the migration was effective 1st January, 2010, the medical officer was paid this amount including the Conversion Difference plus eight (8) months of arrears.  This meant an over-payment of GH¢1,182 per month per doctor for 8 months.

19. When the error was detected, the Ministry of Finance directed the CAGD by letter No. ERFD/11/SAL. 1 dated 21st December, 2011 to stop the payment of the Conversion Difference to the doctors and to recover the over-payment.

20. Following this directive to recover the amount and as a compromise from Government, the Ministry of Finance directed the CAGD by letter No. RSD/ADMIN/01/12 dated 30th January, 2012 that the recovery should be suspended to the extent of the recovery but to stop the payment of the Conversion Difference going forward.

21. The GMA has all along been aware of the situation.  It is therefore unacceptable to the FWSC for the GMA to come back and demand the payment of Conversion Difference which they knew was paid to them in error.

22. As part of the discussions, it was understood that the Interim Market Premium was being paid in lieu of Conversion Difference using the extra hours as proxy, because it was the shortage or scarcity of doctors that occasioned the performance of extra hours in the health sector.

23. Thus the payment of the Interim Market Premium precluded the payment of Conversion Difference because it would amount to double counting and therefore over-payment.

24. The FWSC was established to ensure fairness and equity in pay administration and therefore cannot accede to this demand for payment of Conversion Difference to doctors.

25. Conversion Difference will be paid to doctors on condition that the current Interim Market Premium being paid to them by mutual agreement be withdrawn.

3.0 RESOLVING THE ISSUE OF REDUCED SOCIAL SECURITY AND NATIONAL INSURANCE TRUST (SSNIT) PENSION CONTRIBUTION BY THE MEDICAL OFFICER:

26. The initial concern of doctors was with their reduced SSNIT pension   contributions.  The issue is one of the post-migration challenges being handled by Technical/SSSS Implementation Post-Migration Committee.

27. The issue of reduced pension is a technical issue and a decision on same should be based on sound technical grounds and not on expediency or convenience.

28. By law, Social Security deductions are paid on basic salary.

29. As has been demonstrated, the doctor’s previous basic salary had been computed on 56 hours per week which was considered his consolidated basic salary.  Social Security deduction was thus paid on this 56 hour schedule comprising the 40 mandatory hours and the 16 extra duty hours.

30. This was an anomaly and contrary to the laws of Ghana which required that every employee works for 40 hours per week on which social security is also paid.

31. Computing his basic salary on the 40 mandatory hours instead of the previous anomalous 56 hours meant however that the doctor’s basic salary on which SSNIT deduction is made has genuinely reduced.

32. From our example above, instead of the SSNIT being computed on GH¢ 3,007 it would have to be computed on GH¢ 1,825.

33. To resolve the matter, the Public Services Joint Standing Negotiating Committee (PSJSNC), the highest decision-making body between the Government side and Organized Labour on the implementation of the Single Spine Pay Policy tasked the Technical/SSSS Implementation Post-Migration Committee, which it had earlier set up, to look into the matter and present its recommendation.

34. The Committee presented its Report on 3rd May 2013.  The report states inter alia:

“The Technical Committee discussed the various issues raised and recommended as follows:

(1) That the Ministry of Finance and Economic Planning’s letter that instructed the   Controller and Accountant-General’s Department to suspend the deductions of the Conversion Difference should be strictly adhered to.  For the avoidance of doubt, all monies deducted should be refunded. (Refer to Appendix I and II)

(2) That, in line with the current three-tier pension arrangement, the jobholder makes contributions of his own from his or her enhanced salary towards his/her pension. This is because the doctors’ total compensation has gone up, following the implementation of the new pay policy.  They can, therefore, contribute to the third-tier pension on their own, to compensate for the short fall in their pension contributions.  This is also in view of the fact that their previous HSS salary was a consolidation of their basic salary and the ADHA.  In that sense they would not necessarily be made worse-off.  What is more, this is to be seen as part of the migration process started on 1st January, 2010”.

35. The Committee’s recommendation was informed by expert advice from the Ghana Revenue Authority and the Social Security and National Insurance Trust (SSNIT).

36. The Technical/SSSS Implementation Post Migration Committee report is now before the plenary of the PSJSNC and discussions on it is on-going.

37. In the meantime, Government, represented by the Ministry of Employment and Labour Relations, Ministry of Finance and the FWSC on the one hand and the GMA on the other signed a Memorandum of Understanding (MOU) dated 11th April, 2013, paragraph 4 of which stated that,

“The issue of Conversion Difference and pension is being dealt with by the Single Spine Post-Migration Technical Committee and the Government and the Ghana Medical Association will ensure commitment to the process”.

C. DIRECTIVE OF THE NATIONAL LABOUR COMMISSION AND AFTERMATH

38. In a separate matter where the NLC had gone to Court on 30th April, 2013 to enforce its directive to doctors to be part of the schedule for the payment of the Interim Market Premium (IMP) and to call off their strike and resume work, the Court had advised the parties (NLC and GMA) to amicably resolve the matter.

39. Based on paragraph 37 above, the NLC set up a Special Committee which sat on Saturday, 4th and Sunday, 5th May, 2013 to delve into the matter but which oddly now involved the issue of Conversion Difference.

40. The Special Committee which was a mediation process submitted its Report to NLC on Monday, 6th May, 2013.

41. Aware of the existence of the Technical/Single Spine Salary Structure Implementation Post-Migration Committee Report, as well as the MOU of 11th April 2013, but without giving a hearing to the parties (that is, FWSC/Government Team and GMA), the NLC came out with a Directive that the FWSC should restore Conversion Difference to doctors.

42. On 8th May, 2013, GMA purported to write a letter to FWSC to meet with FWSC to negotiate payment schedule of the Conversion Difference.

43. The FWSC replied to the letter stating that it was not aware of any agreement on the payment of Conversion Difference.  The FWSC referred the doctors to the MOU signed on 11th April 2013, which process the parties committed themselves to.

44. The FWSC is in court to quash the NLC’s Directive to restore the Conversion Difference to the doctors.  This is because paying the doctors Conversion Difference will amount to double counting and therefore over-payment with very serious consequences from the labour front.

45. Employees who were paid Conversion Difference were not paid Interim Market Premium.

46. Paying Doctors Conversion Difference would trigger agitation from other groups for the payment of Interim Market Premium to them as well.

D. CONCLUSION:

47. The issue is not about the amount of money to be paid to any group that is genuinely entitled.  However, the amount will have to be accommodated within the revenue inflows of the country.  Where the FWSC finds the amount more than what the revenue inflows can accommodate, it engages the groups to negotiate the schedule of payment.

48. In the case of the medic al officers, it is the principles underlying the SSPP that dictate that they are not entitled to the payment of Conversion Difference.

49. In conclusion, the Fair Wages and Salaries Commission is committed to the tenets of the MOU signed on 11th April, 2013 with the Ghana Medical Association, which process the parties committed themselves to.

50. The FWSC wishes to assure all Ghanaians that it is committed to ensuring fair, transparent and systematic implementation of the SSPP, which we are enjoined by law to do.

FWSC - PUBLIC AFFAIRS

Mapping and Migration

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