Interview Beejaye Coomar Appana

Interview: Beejaye Coomar Appana – Former Director of PRB

“An additional Rs 100 million to improve the conversion for the low paid would have made the 2013 PRB Report acceptable”

“The introduction of a minimum wage may lead to ‘closing shops’ and thus increase unemployment”

“It would be advisable for private sector organizations to follow the public sector at the lower levels and share partially consistent super normal profits…”

“With the Equal Opportunity legislation, ‘specific hunting grounds’ may gradually dwindle”

Mr Beejaye Coomar Appana has had a wide experience as part of PRB teams before assuming its directorship. After his tenure there, he has acted as consultant on pay-related and human resource issues in a number of sectors, both public and private. He is therefore eminently qualified to comment on the latest PRB recommendations contained in the ‘Manraj’ Report, and his considered views are presented in this interview.

Mauritius Times: Following protests from trade unions, the government appointed Dev Manraj, former Financial Secretary, to deal with anomalies arising out of the Aujayeb PRB Report. After it was made public, the Manraj Report has met with criticisms from certain quarters. It may not be the main preoccupation of the drafters of Pay Review reports to try and please everybody in the service, including their union representatives, but what is it that a PRB director requires to be able to come to grips with such a comprehensive exercise and how would such a Pay Commissioner go about fulfilling his mission?

Beejaye Coomar Appana: “Do we pay a doctor more than a priest?” asked Barbara Wooton, an authority on the subject in her book ‘The Social Foundation of Pay Policy.’ The reply to the question is that it depends on norms in the country. If we value the soul more than the body, then the priest should hierarchically be higher than the doctor. I want to stress that pay determination is a normative science and a good Director of PRB/Pay Commissioner should, in the first instance, have a comprehensive understanding of the expectations of all the stakeholders in a given environment. Striking the right balance between what would be ‘felt’ good in terms of relativity and acceptability to unions in general and what would be affordable in terms of cost is a major challenge.

A good Director PRB/Pay Commissioner should be knowledgeable in different fields, viz, management, HR, Economics, Statistics, Law, Consultancy, among others. As all these competencies cannot be found in one individual, a Director/Pay Commissioner should be able to work in a team, know where to get his information or advice from, be a good planner, communicator and above all be logical, equitable and just.

In fulfilling his mission, he should engage all stakeholders in the process from the very beginning, discuss his pertinent findings and sound the different stakeholders on different proposals at different stages of the exercise, so that no party is surprised with the final recommendations.

* The Aujayeb recommendations created a big stir among public servants in the middle to lower parts of the income ladder who were claiming that the rate of increase in their case was disproportionately small compared with those at the highest levels. What, in your opinion, would explain this disproportionate award of salary adjustments in the public sector?

Compensation for loss of purchasing power as a key consideration explains partly this disproportion. It should be noted that each year employees at the lower end receive higher compensation through payment of the statutory COLA than those at the upper end. A Pay Review tries to redress same.

Another element is the need to bridge the gap between salaries in the civil service and those practiced in the private sector and even in the State-owned enterprises for comparable grades. The gap is larger for professionals and above while salaries of manual grades are higher in the public service. It should also be noted that the country is spending a lot of money on the laureates and most of them are not coming back. There is a drain of certain skills

While it may be appropriate for a Pay Review to bring about certain corrections in relation to the foregoing, there is equally need to ensure that the absolute increases at the lower end are acceptable, e.g., an additional Rs 100 million to improve the conversion for the low paid would have made the 2013 PRB Report acceptable.

* The Manraj recommendations, on the other hand, raised salary levels at the lower levels in the public sector to such a point that similar categories of workers in the private sector feel they are relatively heavily underpaid. This may give rise to a spate of salary increases in the private sector where some enterprises claim they are unable to grant matching increases. Does the PRB, including adjustment for anomalies, consider the impact of its recommendations on the broader economy?

The PRB should consider the implications of its recommendations on the economic development of the country while at the same time ensure social acceptability and industrial peace. It is bound to take into account the repercussionary implications of its recommendations on the private sector and be cautious while adjusting salaries.

In principle, the PRB has always argued that on grounds of social policy, the public sector should lead the private sector at the lower levels and should follow at the higher levels. By adopting this stance, the authorities give the signal to the private sector to improve pay at lower levels where the capacity to pay permits and the survival of the firm is not threatened.

The Manraj Commission operated in a specific context of great expectations from the Unions and particularly of employees at the lower end after they have taken cognizance of the absolute increase granted by the PRB to officers at the upper echelons. It must also be noted that the Manraj recommendations have been spread over three years.

Poverty anywhere is a danger to prosperity everywhere. It would be advisable for private sector organizations which have the means but are continuing to adhere to minimum remuneration prescribed by National Remuneration Board and are in a situation of making super normal profits to follow the public sector at the lower levels and share partially consistent super normal profits to the private sector employees through increase in pay.

* There was a time when the public sector attracted the best brains and very dedicated top Civil Servants. It is said that the quality of their work was in no way inferior to those of British Civil Servants. Yet, the salaries they got was not the overriding dimension of the image they projected. Today, it would appear that this factor is the topmost consideration in the public service. Do you think that the money mentality has indeed become so dominant, especially at certain levels, over the service mentality in the delivery of the public service?

It would be unfair and perhaps dangerous to generalize such a statement. However, it is true to say that not all persons join the public sector because they are public-spirited.

Today, with free education and facilities for upgrading skills it has become natural that employees and even workers would look for greener pastures if they feel they are not adequately compensated for their skills and knowledge.

But I can assure you that what you call service mentality exists in many areas of the public service e.g. judiciary, medical, nursing, just to quote a few.

* Governance is becoming increasingly more complex just as business, crime, etc., more transnational. This perhaps makes the case for leaner but more effective and stronger governments. When you were making recommendations about salary and benefits to be awarded to public servants, was the quality aspect – as regards staff retention – at the top of your concerns, and therefore you were liberal about awarding increases?

Attracting and retaining rare talents has always been a key consideration in salary determination. Specific additional increase or benefits have to be recommended for certain competencies. For example, it is penny wise and pound foolish to train our nurses at high cost for them to then go and serve foreign hospitals at no cost to the host countries.

* Many in part of the local media put up a claim that public servants are not productive enough. Have you contemplated to effectively implement a performance-related pay system that could draw out the expected productivity from the public service? Is this the answer to the problem or is there no such problem, because the service can deliver only that much as its leadership is able to get out of it?

It would be treading on slippery ground to generalize as regards this question of inadequate productivity though we cannot deny that there are a number of individuals who are not delivering at the level expected from them in various quarters. In my last two reports I did recommend the introduction and implementation of a Performance Management system with the ultimate objective of improving performance across the service, rewarding meritorious individuals and dealing with poor performance.

As for the leadership aspect, it is true that leadership is the capacity to frame plans and the ability to make them succeed at the cost of very great sacrifice. It is the ability to make the team/organisation do what the leader wants them to do. A leader who has control over a good reward strategy can make a difference. However, I do not think that the performance-related pay system in its present form can add much to the ability of a public service leader to deliver on his mandate.

* There is a trend towards contracting out some of the top jobs in the public service. Do you think that this system allows the concerned public servants to walk away with a much more generous salary allocation than it would have been the case if those persons were maintained on the Establishment?

Section 20 of the Employment Rights Act provides for equal remuneration for work of equal value. The PRB has always recommended that salaries of contract officers should be in line with those of substantive officers except for certain differences in terms of allowances for very specific reasons, e.g, compensation for security of tenure/inducing someone to forego his earnings somewhere else, etc.

* We are seeing in European countries currently that hordes of civil servants are being laid off. The state does not have the funds to continue employing them. Which could mean that there were more men and women in the public services in those places than were required and necessary. In your experience, would you believe that, for some reason or other, our public service became similarly overweight at some time in the past, so many are there who don’t give value for money?

I do not think that there is overmanning on a large scale across the Civil Service. We need the number of Police Officers to ensure security, the number of teachers for our children and the number of nurses to man our hospitals and to deal with our increasing needs. However, there may be areas where there is some overmanning in lieu of changes in technology or changes in the importance of a sector. These are being specifically and effectively addressed in the public sector. Recently a Voluntary Retirement Scheme has been implemented at the Mauritius Cane Industry Authority. I have myself been involved in devising VRS for the Sugar Insurance Fund Board which is at present being implemented.

* In the light of your experience, in which directions will our public service evolve in the future? Will there be fewer public officers delivering the same or a larger amount of output in the public sector, with the aid of technology transforming the way the services are delivered?

In certain areas yes, but in other sectors e.g. health we may need additional resources to cater for an increasing number of patients.

* In such a case, where will qualified people find a place to work at, it being given that our private sector has its own reserved and specific hunting grounds when it is in search of workers? In other words, are there among our public servants some who have the capabilities to become entrepreneurs in their own rights and be successful at that?

With the Equal Opportunity legislation, the ‘specific hunting ground’ may gradually dwindle. With the creation of new areas of development in both the Public and Private Sectors, there will be new opportunities for our graduates. However, there is an urgent need to guide our school leavers towards the appropriate fields of vocational/tertiary education so as to avoid and minimize the mismatch between available resources and skills required.

* While public servants are relatively highly comfortable now after the anomalies adjustment, there are other workers in Mauritius who are neither covered by anything like the PRB nor have bargaining power (e.g. household servants) and who get miserable salaries compared with both the public sector and the formal private sector. How do those people act to become entitled to a decent salary?

This has always been a real headache for our political masters even during the colonial days.

Many developed countries have set a minimum wage and this has to some extent been a solution to this issue. On the other hand the introduction of a minimum wage may lead to ‘closing shops’ and thus increase unemployment.

In the present socio-economic environment, it may be advisable for government to review all remuneration orders in the formal private sector and come up with a minimum pay increase for those not covered by any pay machinery.

* A few of the strategic sectors of the Mauritian economy, namely the port and public transport where government has a stake, have been shaken up by trade disputes recently. It does not look like a repeat of the 1970s yet, which the government seems willing to avoid at all costs. Employees of the Cargo Handling Corporation and of the Central Electricity Board, for instance, may not be keen to come under the umbrella of the PRB because of the much higher take-home-pay than the public service’s pay package. In the circumstances, what kind of wage negotiations and/or settlement are necessary to avert these key sectors becoming a threat to the country’s economic stability?

Let us in the first instance look at the wage negotiations/settlement mechanism available to public sector organizations not under the umbrella of PRB. In the first instance, unlike organizations falling under PRB, these organizations are generally governed by the provisions of the Employment Rights Act and the Employment Relations Act. The Employment Relations Act provides for collective bargaining involving negotiations between the employer represented by management and the employees represented by the Union with a view to reaching a collective agreement on salary and conditions of service. The situation becomes more complex when the organization has several unions which are not prepared to work together in a Joint Negotiating Panel.

Section 56 of the Employment Relations Act reads as follows:

“Where there is a joint negotiating panel or a group of recognised trade unions, a collective agreement signed by one or more trade unions representing more than 50 percent of the workers in a bargaining unit shall bind any other trade union in the joint negotiating panel, or a group of recognised trade unions, which refuses to sign the agreement.

“Where there is a joint negotiating panel or a group of recognized trade unions and one or more trade unions signing a collective agreement represents less than 50 percent of the workers in the bargaining unit, the trade union or the employer concerned in the bargaining unit may apply to the Tribunal for the making of an award enforcing the collective agreement.”

However, certain organizations may not have the negotiating competency for such an exercise and consequently engage consultants to assist them in the process. Unfortunately, these consultants are given a Terms of Reference to produce a Report but not to assist in the negotiation process. Such Pay Reports are often given to the employees to opt prior to having the agreement of the union. Such a process should, as far as possible, be avoided in the future.

Considering the above, it is suggested that the organization:

a. either carries out the collective bargaining process in line with the provisions of the Act and reaches an agreement on salary and or conditions of service.

b. or engages a consultant with appropriate competency to be an Agent of the organisation with full powers to negotiate with the union to reach an agreement on pay and conditions of employment while adhering to the procedures of the Employment Relations Act on Collective Bargaining.

c. or engages a Consultant to prepare a Pay Report and the recommendations of the Report are used by management in the collective bargaining process which it engages in, in line with the provisions of the Employment Relations Act.

d. or discusses the draft Report of the engaged Consultant with the Unions, considers their counter representations, takes them on board in the final Report and subject to the concurrence of the board and the union, issue options to employees for implementation of the pay recommendations.

The authorities may also wish to consider coming up with pay guidelines for the concerned sectors in order to avoid pay decision in one sector having repercussionary implications across the country which could lead to anarchy in the future or review the industrial process for the concerned organisations.

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* Published in print edition on 27 July  2013

Tags:2013 PRB Report, Aujayeb PRB Report, British Civil Servants, Dev Manraj, Director PRB/Pay Commissioner, Equal Opportunity legislation, Interview Beejaye Coomar Appana, Manraj Report, Mauritius Cane Industry Authority, Pay Review, Voluntary Retirement Scheme