SUMMARIZING THE DEBATE
Written by Joseph Layne on November 15, 2017
SUMMARIZING THE GREAT PUBLIC OFFICERS PENSION DEBATE IN GRENADA
This is the Eighth and final Article in the series on pension rights of public officers in Grenada.
In the very first article I asserted that the People’s Revolutionary Government (PRG) never intended to leave public workers stranded with only the basic NIS Pension.
I argued that at the time the PRG passed People’s Law No. 24 of 1983 (aka the PDA) it was intended as a temporary measure. The main objective of the PDA was to establish a cut-off point between the old system of non-contributory pensions under the 1958 Pensions Act and the new system of contributory pension under the NIS.
In the context of the legal framework on pensions to which the PRG committed by way of People’s Law No. 9 of 1979, a public officer was entitled to a pension based on the law in existence when the officer was appointed. In the absence of the PDA, public officers appointed after the NIS was introduced would be entitled to pension rights under the old system (represented by the 1958 Pensions Act) and under the NIS Act. Why? Because under Section 92 of the Constitution the minimum pension benefits that a public officer is entitled to is that provided under the law in existence when he or she was appointed.
At the same time, without subsequent reform, the effect of the PDA is that a public officer appointed on April 3rd 1983 (the day before the PDA took effect) would receive pension and a lump sum gratuity payment under the 1958 Pensions Act (the law he would have met in place when appointed) and also an NIS pension (since this applies to all workers in Grenada). However, a worker appointed on April 4th 1983 and sitting side by side with a worker appointed the day before the cut off date would be entitled only to the NIS pension.
This discrepancy was an obvious anomaly. It was never intended to be permanent. Hence Section 47 of the NIS Act granted certain powers to the minister of social security to institute necessary reforms.
There was no legal necessity that reforms under Section 47 of the NIS Act be instituted together with the passage of the Act. There was no pressing need for the PRG to have the reforms ready when the Act was passed or immediately thereafter. There was ample time to properly think the matter through and to develop and put in place a proper system for pension for all public officers within the context of the NIS. This was so because generally a person must reach the age of 60 or serve 26 years and 8 months as a public officer before he or she becomes eligible for pension.
However, within months of commencement of the NIS, tragic events descended on Grenada with the demise of the PRG. Subsequent governments from 1983 did not complete the legislative intent of the PRG by exercising the power under Section 47 of the NIS Act. Thus what was intended as a temporary measure has remained in place for over three decades.
The problem has now come to the fore because persons who were in their twenties and thirties when appointed after April 4th 1983 are now coming of pensionable age and they are naturally anxious about their pension rights.
What was the real intention of the PRG?
There are those who argue that the PDA was driven by a mind-set within the PRG which perceived that with the enormous growth in the social welfare programmes under the Revolution in the form of free medical care, housing reform, education and other social benefits, that any need for pension benefits would have diminished so that by the time the generation of 1980’s public servants came of pensionable age, they could comfortably survive on a basic NIS Pension.
In order to rationalize the PDA this is the way that some accept the people-first perspective of the PRG and its policy of seeking to bring constant improvement to the conditions of workers.
However, this view of the PRG’s approach to pension does not square with many of the actions that government undertook. It may be recalled that within days of the Revolution the PRG passed People’s Law No. 9 which committed the new regime to respecting pension rights of public officers. Peoples Law No. 68 of 1979 was passed to increase the pension for pensioners and included ‘back pay’. People’s Law No. 15 of 1983 also increased the pension for existing pensioners with back pay. And of course People’s Law No. 24 effectively preserved the pension rights of persons appointed before April 4th 1983.
If the PRG passed the PDA in a context where it was expected that future expansion of social benefits would compensate for reduced pensions then that strengthens the case for reform. Since the tragic fall of the Revolution the Grenadian State has abandoned the PRG policy of massive expanded social benefits. Consequently, it is unfair to post 1983 public officers to leave them without the expected social benefits and only with the basic NIS pension.
Special Pensions Act
It is not to say that governments after 1983 were unaware or unconcerned about the problem. There is evidence that they were. For example in 2003 Parliament passed the Special Pensions Act. The Act brought relief to four categories of workers who started to work with the government of Grenada prior to April 4th 1983 but were only appointed as public officers after that date.
Those workers received a special pension calculated as a percentage of their last salary. They do not receive the lump sum gratuity payment as is provided under the 1958 Pensions Act. The special pension plus the NIS pension comprise a substantial part of the last salary.
Yet the majority of public officers have to this day no relief from the government which explains why they have no option and have reverted to judicial intervention.
PRG laws unconstitutional
One of the factors that have complicated the pension’s debate is the 1985 decision of the Grenada Court of Appeal in the case of Mitchell v. The Director of Public Prosecutions. The issue in that case was whether the legal system established by the Revolution had by 1983 supplanted the Constitution. If the answer was yes then it meant that the PRG laws survived its demise. If the answer was no, then the PRG laws died with it and they could only be revived by the Parliament elected under the provisions of the 1974 Constitution.
The High Court decided that indeed the legal system established by the Revolution had supplanted the Constitution. That decision was reversed on appeal. The Grenada Court of Appeal applying jurisprudential principles of Revolutionary legality decided, by a 2-1 majority meaning that although the PRG was an effective government, widely recognized internationally, there was not sufficient evidence before the Court upon which it could safely find that by 1983, the Revolution had established a new legal system in Grenada supplanting the 1974 Constitution.
The effect of the decision in Mitchell v. The DPP is that (a) the PRG’s Laws did not automatically survive the demise of the Revolution; (b) their continuation depended upon their validation by the post-Revolution Parliament; and (c) the lawfulness of all validated PRG Laws are to be measured against the yardstick of the Constitution.
This declaration of unconstitutionality was therefore not a moral judgment of the PRG or its Laws. The issue before the Court was not whether the PRG’s Laws were legal or illegal but whether those Laws survived when the Revolution ended. This was a highly technical legal issue with enormous implications.
It is against the background of the decision in Mitchell v. The DPP that the courts were called upon to determine issues connected with pensions for public officers. Two important cases were looked at in this series of articles. McQueen v. The PSC and Armstrong v. The AG.
By 2009 (the time of the Armstrong case) the discrepancy referred to above where persons who were appointed just a day apart in the public service could receive substantially different pension benefits was at the forefront and it had to be resolved. But on what legal basis?
At the end of the day, the courts were faced with two different bases upon which to hinge their decisions. First, the decision could be hinged on the basis that the PDA is unConstitutional. Or second it could be hinged on the failure of all governments since 1983 to do what Section 47 of the NIS Act allows namely -reform the pension scheme and bring justice to public officers appointed after 1983.
Despite the many difficulties with the decisions, which were identified in earlier articles, it is clear that the tendency of the courts was to resolve the issue of the clear unfairness to post 1983 public officers on the basis that the PDA (People’s Law No. 24 of 1983) was unConstitutional. Translated in political terms, ‘The PRG is responsible for the injustice being suffered by public workers appointed after 1983’. In the process the courts did recognize that post 1983 governments did not complete the legislative intent of the PRG. However, this observation was not used for calling out those governments for their delinquency. Instead it was used quite remarkably, in the McQueen case, to find People’s Law No. 24 of 1983 unConstitutional even after it was validated by the Parliament.
The State has acted unreasonably and unfairly
It is now a notorious fact that the present government and those unions representing public officers are locked in battle negotiating the issue of pension for post 1983 public officers. PM Keith Mitchell has expressed his commitment to resolving this issue on several occasions.
Whatever the outcome of the current battle it is my firm view that the correct legal remedy for post 1983 public officers is not a declaration of unConstitutionality of the PDA.
I submit that the correct legal remedy is a declaration that the State has acted unreasonably and unfairly (if not unConstitutionally) by not exercising the power under Section 47 of the NIS Act for all of 34 years (to 2017). That remedy should include a judicial Order compelling the State to exercise the power.
The courts cannot decide how the power is exercised. The details of how that power is exercised is a matter of the political process and political calculation.
Legally wrong, financially unsustainable
In addition to not being correct from a legal standpoint, a decision that the PDA was unConstitutional even after its validation by Parliament in 1985 carries a huge cost. It would mean that all public officers are Constitutionally entitled to pension and gratuity under the 1958 Pensions Act. It would further mean that as of 2017 the taxpayers of Grenada are liable for unbudgeted pension and gratuity obligations possibly in the high hundreds of millions of dollars, accumulated over 34 years.
A legally correct flexible and realistic solution
The alternative legal remedy of requiring the State to exercise the power under Section 47 of the NIS Act, is the legally correct remedy. This would have the added value of allowing greater flexibility for stakeholders since it would allow the politicians and the unions to negotiate a solution within the context of the NIS that is consistent with the Constitution and carries a realistic price tag. This can be done even in the absence of an order from the court.
Such a solution would have to recognize that pre April 4th 1983 public officers are Constitutionally entitled to the pension and gratuity under the 1958 pensions Act. They are also Constitutionally entitled to their 4% contribution under the NIS (it’s their property) but not to government’s 4% contribution. The reason why the government’s 4% contribution is not protected under the Constitution for pre-1983 public officers is because the NIS Act was not in existence when they were appointed.
Public officers appointed between April 4th 1983 and February 22nd 1985 are in a unique position. They are entitled to pension and gratuity under the 1958 pensions Act (for reasons examined in previous articles). They are also entitled to the full NIS pension, since they met the NIS pension law when they were appointed.
Persons appointed after February 22nd 1983 are entitled to the basic NIS pension plus whatever improvement is implemented in exercise of the power under Section 47 of the NIS.
As stated above, such a solution can be arrived at around the table. It does not require a court order. Going to court at this time could be a long process that can go all the way to the Privy Council. It would delay a solution to a problem that has festered for too long and requires an urgent solution. Further, I submit that there is a good chance that the Privy Council would arrive at the very remedy suggested herein.
Additionally, such a solution would be a win for public officers in that it would allow public officers to achieve, around the negotiation table, the best result possible without going to court; and in the shortest possible time. It would also represent a win for the People and Grenadian State as it would avoid long and costly legal battles and bring a relatively fair resolution, at a realistic cost, to a problem that should have been resolved long ago but which has been allowed to fester like a bad sore foot.