From the get-go, the SSRP was intended to enable employers to maintain employment relationships with as many employees as possible. It was anticipated that, without such a program, the number of lay-offs and bankruptcies would harm our economy to such an extent that it would be difficult to recover. The development of the initial program, applied for the months of April and May, was done by Government without any real consultation with the social partners. While it is understandable that the formal legislative process was not adhered to, the complete lack of consultation is not.
Because of the fast development of the Corona Crisis, Government had to act fast and it is understandable that the program that was rolled out was not perfect. What is less understandable is that there appears to be no flexibility to adjust the program as we went along. This has become worse with the application of the June Support, where there appears to be no flexibility at all. All questions with respect to this program, and there are many, are referred to CFT which, we have been informed, does not allow any adjustment at all and does not want to create clarity where the limited regulations leave ample room for improvement. This is unfortunate because what was meant to have a positive impact on the level of employment and our economy has become a topic of animosity and antagonism.
We have identified a number of issues with the SSRP program amongst which (but not limited to):
1. All employees must agree: If one, out of all, employees does not sign the agreement, the employer forfeits all support for the month of June. Mind you, after the month has passed. Employers who, in good faith, paid their employees for this month are now left hanging to dry if just 1 of their employees refuses to sign the required statement drafted by Government. Apparently, the lack of consultation and consensus has upset the Chamber of Unions to such an extent that they are now advising their members (and private sector employees in general) to not sign the required statement. This is unfortunate as it will lead to mass layoffs and an increase in the number of business closures (bankruptcies). This has created an unworkable level of animosity and distrust between employers and employees.
2. SZV registered wages: These wages include all sorts of wage elements (vacation pay, fixed bonusses, premiable allowances, shares in service charge and tip pools, commissions, provisions, etc.) that will only have to be paid when earned. Since many businesses have been closed since mid-March (5 months by now) there are no sales (so no commissions, provisions, service charge and tip pool) and employees do not actually work (so no allowances). At the same time, it has become impossible for employers to mitigate the loss of those types of income for their employees. Yet they are still included in the basis (SZV registered wage) for the calculation of the employee’s and SSRP contribution. Especially for the performance-based remuneration, there is no legal basis for payment. This causes a lot of employers to not be able to apply for support.
3. Exclusions: Many businesses were excluded from the payroll support for April and to a lesser extent for May. The selection of excluded businesses was not always logical. Many businesses that did suffer significant loss of sales were not able to qualify for support. Supermarkets come to mind, even though they had to close for a few weeks and lost additional revenue because of the absence of tourists and the closure of the border. The published number of businesses that did apply for support and the amount of support paid out is significantly below the anticipated number and budgeted amount. One wonders whether the exclusion list has not been established overly broad, out of fear of overspending.
4. Time to process, accessibility of June support portal: While some business requests for support have been processed in time, many businesses are still waiting for an answer that they are eligible. This creates significant financial problems for these businesses. The conditions for the June payroll support were published late and the portal for the June payroll support was only accessible as of 7 August. Aside from financial problems, this creates large problems for all employers that did not pay the percentage of SZV registered wages, established in accordance with the rules of the new system, for the month of June. Employers that paid more will find it difficult to get their employees to agree, when they paid less they may not qualify, when the SZV registered wages include variable wage elements it becomes very difficult to qualify. Even though adjustments in pay on a later date are allowed, it still creates unnecessary problems for both employers and employees while it also adds to the lack of trust between employers and employees.
The above-mentioned could have been avoided, we believe, if consultation between the social partners had taken place during the process of designing the SSRP. Our Country has 2 established bodies for such consultation, the Tripartite Committee for Labor Affairs and the Social Economic Council. Both of these are dormant at this time, primarily caused by the unwillingness of the Government to engage with the real representatives of the private sector. We invite the Government and the Windward Island Chamber of Labor Unions to restart the process of consultation, for the good of Sint Maarten.