Pregnant women in Barbados should be given one year’s maternity leave. — Dr. Carlos Chase, President of the Barbados Association of Medical Practitioners
In a recent presentation addressing the rights of workers and the plight of employers in Barbados, Dr. Carlos Chase made a compelling case for increasing maternity leave in Barbados while sharing illustrations of the lengths that some Barbadians will go to abuse the country’s generous sick leave benefits.
It is likely that every Barbadian worker may know of at least one individual who wantonly abuse sick leave or unemployment benefits, both of which constitute important elements of the social safety net. Just last year it was reported in another section of the media that employees of the Bayview Hospital were up in arms about the prospect of not being given an option of gratuity and reinstatement to their incumbent positions in the event that the private healthcare institution was acquired by new owners.
These events speak to a culture of entitlement and a lack of understanding of the purpose of the social safety net that has been built up over time to safeguard the vulnerable and sustain a decent standard of living.
This ignorance is breeding a form of mendicancy that undermines labour productivity and imposes unnecessary costs on various economic agents.
It places the country’s growth and prosperity in peril as it eats away at national development like a cancer. The abuse of sick leave in particular has been a cause of some consternation for some time now. Unfortunately, those that abuse social services seem to be oblivious to the negative impact of their actions and the actions of their co-conspirators.
It is time to cure the cancer. Moral suasion has not worked. For too long those in authority have contributed to the perpetuation of what has become known as a “talking society”, a most unflattering epithet. There is an obvious problem that requires firm and decisive action.
There was a time when Barbados was known for getting things done. Regrettably, the country’s administrative systems have not kept pace with the social and economic evolution that has taken place since Independence. A crisis should never be wasted. Carpe diem! Apart from reforming the structure and functions of government, policy makers will do well to modernise employee benefits to ensure that responsibilities are honoured as rights are affirmed.
I agree with Dr. Chase, six weeks is far too short a period for maternity leave. Though a year-long maternity leave may not be palatable at this time, it would be very progressive if provision could be made for an optional six week paternity leave for fathers of newborns while maternity leave is extended to six to nine months.
This would be better use of the famed NIS surpluses than the financing of unsustainable budget deficits, particularly current account deficits. After all the proceeds of employment insurance should resound to the benefit of workers and pensioners. The recommendation is worthy of actuarial examination.
“Barbados is more than an economy, it is a society.” Remember that? The introduction of paternity leave and the extension of maternity leave could be employed as important tools for promoting healthy family life and early childhood nutrition and development. Strong families make strong societies and strong economies.
Given the scale of sick leave abuse in Barbados, a stick approach may now be more appropriate than a carrot approach. Adjustments could be made to the nature of sick leave benefits as well as the qualifying criteria. It may be time to create disincentives for taking sick leave.
For instance, the percentage of insurable wages paid as a sick leave benefit could be reduced from the minimum 66.67 per cent. Also employers could be given the discretion to deduct pay for uncertified sick days, especially in circumstances where an employee has a history of taking uncertified sick days every year.
Alternatively, provision could be made to ensure that a person’s future pension is reduced if that person’s employment record contains periods of sick leave above a predetermined threshold for certain types of ailments or injuries. Of course, if the objective of reducing indiscriminate sick leave is to be achieved, employees should be continuously educated about the rights and responsibilities of employee benefits.
I know of individuals who firmly believed that they should take advantage of the allotted sick days in a calendar year and ensured that they periodically took uncertified sick days every year. I also know of others who held the view that if they were laid off, they would endeavour to claim unemployment benefits for the maximum period before they sought new employment.
Regrettably there are those who will always seek to abuse the system. The onus is on those that manage the system to update the safeguards in the interests of all concerned. As far as exploitation of old age pensions is concerned, better securities features should be instituted to prevent the unauthorised cashing of pension cheques. In addition, a mechanism should be put in place to garner the pensions of senior citizens that are abandoned at the QEH and long-term care facilities.
On another note, in last week’s edition of this column, titled Flirting with Danger, I made the following point: “Despite the fact that interest rates on short-term debt instruments tend to be lower than the interest rates on longer-term maturities, the switch from long-term borrowing to short-term borrowing will result in higher cumulative interest costs due to the increased refinancing iterations.”
I would like to take this opportunity to retract that statement and apologise to readers who were misled by that assertion. Nevertheless, I stand by all of the other points made in that article.
The Central Bank of Barbados’ notional yield curve of Barbados’ Government securities quotes annualised interest rates of 3.54 per cent onthree-month Treasury Bills and six per cent on five-year bonds. Therefore, the interest costs of a debt instrument of $1,000,000 atsix per cent per annum to fund an annual fiscal deficit of $1,000,000 would be $60,000; however the interest costs of a debt instrument of $1,000,000 with an annualised interest rate of 3.54 per cent and a three-month maturity to fund an annual fiscal deficit of $1,000,000 would be [$1,000,000 *0.885%] = $8,850 times four (i.e. $35,400). This result occurs since the debt of $1,000,000 will have to be rolled over on four occasions during a 12 month period in the second scenario.
The interest cost in the second scenario is in fact less than the interest cost in the first scenario. Therefore, all things being constant, the Government will not incur higher interest cost as a result of its increasing reliance on shorter term financing. It does however, run the risk of scarcer sources of financing if investor confidence continues to plummet.
* Carlos R. Forte is a Commonwealth Scholar and Barbadian economist with local and international experience. C.R.Forte@gmail.com
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