Now is the winter of our discontent…

In Solidarity

This site has historically displayed its solidarity with the organised labour movement, so it will no doubt come as a no surprise to readers that I am in solidarity with the BTUC today.

Photo credit to the Bermuda Sun’s Don Burgess.

The BPSU has released this evening a document [BPSU-letter-Jan-26-2015 – pdf] which provides the genesis of the current discontent, and it gels largely with what I’d been hearing for the last few months – indeed, this current action by the unions should come as no surprise to any observer of the relationship between the OBA and organised labour over the last 12 months and beyond.

The BPSU Document

I recommend readers review this document released by the BPSU; I provide below just a bullet-point version of what I see as the pertinent points:

• The BTUC and Government met on October 16th, 2014, with the BTUC opposing the then imminent Public Bodies Reform Bill while at the same time offered to assist the Government develop a multi-year deficit reduction strategy.
• A joint working group of the BTUC and Government – the Budget Reduction Working Group (BRWG) – was formed as part of the proposed multi-year deficit reduction strategy proposal.
• The BRWG was tasked with assisting with the proposed 5% budget cuts for the upcoming 2015/2016 Budget.
• The Government agreed to postpone the introduction of the Public Bodies Reform Bill. [The operative word there is ‘postpone’ by the way.]
  • The BPSU consulted its members on ideas for cost-savings to meet this proposed 5% cut.
  • These suggestions were collated by the BPSU’s Political Action Committee and developed into a proposal to be put forward to the BRWG.
  • It’s not clear if the resulting proposal was solely that of the BPSU or that of the entire BTUC.
  • The BPSU/BTUC proposal would have led to cost-savings of between $65-85 million dollars ‘in cost saving’ but also included ‘about a dozen substantial revenue generating ideas’.
  • The Government side of the BRWG rejected all but $37 million cost savings from the unions proposal.
  • The first meeting of the BRWG (November 19th, 2014) led to an agreement that the target for budget cuts was $47 million.
  • It was soon realised (presumably by the union side) that the government side had, for whatever reason, overlooked that the furlough days agreement expired on March 31st, 2015, and its calculations were based on the continuation of that furlough days system.
  • The unions insisted (I’m paraphrasing here based on my understanding) that this would have to be re-negotiated and could not be automatically assumed to be a given; therefore the target for budget cuts was adjusted to reflect this – changing from $47 million to $67 million.
  • After the government side rejected all but $37 million of the unions proposals for budget reduction, the unions suggested the government come back to the negotiating table with ideas of their own.
  • Government agreed to this and returned to the BRWG on December 17th, 2014.  However, the government side only came with proposals amounting to just $5 million.
  • The BTUC were ‘furious’ with this, as they had been led to expect the government side would return with something closer to $46 million.
  • In reaction to the BTUC’s dismay the Government side ‘also indicated their displeasure with the collective efforts from the Departments’.
  • ‘The meeting ended with the Government Officials supposedly going back to the Departments for further cuts.’
• Despite this, on January 8th, 2015, ‘the BTUC was informed by letter from the Cabinet Secretary that the meeting of the December 17th, 2014, was the last meeting of the Working Group [BRWG] and that talks had concluded.’
• ‘The letter also informed the members of the BTUC that they will be contacted by the negotiators to continue the talks.’
• In reaction the BTUC requested a meeting with the Premier and the Minister of Finance; the subsequent meeting was held on January 14th, 2015.
  • In this meeting the BTUC expressed its displeasure with the process and the abrupt termination of the BRWG.
  • The BTUC also questioned why the negotiators would contact them rather than participate in the BRWG (an earlier part of the letter stresses these negotiators acted merely as observers without participating).
  • The BTUC also stressed that they’d come to ‘the table as honest genuine brokers’ (I read this as implying they felt the government side had not acted in such a way).
  • The Minister of Finance apparently argued that despite the BRWG process it had failed to meet its targets.
  • The BTUC responded that this was because the government side had not come forward with meaningful savings.
  • The BTUC also queried whether the 5% saving was actually realistic to achieve and whether the Minister of Finance had ‘done any analysis to indicate which areas of spending could actually be reduced’.
  • These points were not rebutted or addressed by the Minister of Finance or the Premier, and the Minister of Finance ‘explained that the expenditure targets were not solely his position but a demand of his creditors’.
  • The Premier asked if the furlough day policy could be extended.
  • The BIU President replied that such would not be easy and ‘for the BTUC to ask their members to continue furloughs was not something he was prepared to do’ – these sentiments ‘were shared by the other BTUC members at the table’.
  • The BPSU General Secretary pointed out ‘that the reasons we [the BTUC] conducted this exercise was to protect wages and jobs, and continuation of furlough days defeat the whole purpose’.
  • The meeting concluded, with the Premier saying he would discuss the meeting with his team and contact the BTUC soon.
• The next morning (January 15th, 2015) a conference call was held between BPSU President, the BPSU President, the Premier and the Cabinet Secretary.
  • The Premier ‘said that Government was looking into some of the additional cost savings initiatives that were discussed in the meeting the day before’.
  • ‘There was no mention of a desire to continue furlough days in the short telephone exchange.’
  • ‘There was no formal correspondence after that conversation.’
• On January 23rd, 2015, letters were handed to the BTUC, via the BIU President (in his capacity as 1st Vice President of the BTUC) from the Minister of Finance.
  • This letter acknowledged that the contributions of the BTUC would lead to savings of about $35 million, and an additional $5 million would be saved as a result of the proposals made by the government side.
  • This $40 million in savings however was not enough and the target for the 2015/2016 budget can only be achieved through the continuation of the furlough days.
  • The letter then contained a de facto lock-out threat if this could not be agreed – ‘To be clear, unless a budget is approved… …the Government will not be able to operate, requiring all services to be suspended and all staff to be sent home, unable to be paid.’
  • This threat was then followed by another threat (a bit of a bait and switch – proposed a really bad idea in order to make another bad idea sound better) – ‘If you are unable to agree to continue the furlough, the Government will be forced to take steps to achieve the necessary reduction in expenditure for 2015-2016.  Such measures could include a reduction in salaries of Government Employees equal to the savings achieved in the current financial year by the furlough.’
  • The letter contained a deadline for agreement on the furlough of noon on January 26th, 2015.
• The unions found this to be an ‘unreasonable demand’.  This led to the actions taken today by the unions.
• The BPSU then articulates its opposition to the continuation of furloughs:
  • Health insurance rates are to increase by 19% in April 2015.
  • The BTUC have actively participated in a process to help the Government reduce expenditure primarily to avoid pay cuts – the proposals submitted already contain levels of further sacrifice.
  • The Government failed to contribute any meaningful savings to the working group.
  • Many members have expressed financial hardship due to furloughs.
  • Members have experienced two years of pay freezes and two years of pay cuts since 2010.
  • Shared sacrifice is not [being?] shared.
  • The Government plans to spend money it does not have on America’s Cup and the Airport redevelopment and the Tourism Authority.

Immediate Thoughts

To be clear, I don’t know what proposals the BTUC made which the Government side rejected, nor do I know what the BTUC proposals that were accepted were.

Nor do I know what reasons the Government side gave for rejecting those other BTUC proposals.

However, it seems clear to me that the BTUC has genuinely tried to be constructive and are right to be frustrated with the Government who, it seems, has been acting disingenuously, as well as stone-walling.  The blame for this current impasse and failure to meet the budget targets would appear to be solely that of the Government – and more specifically the Minister of Finance for insisting on furlough days without entertaining the other BTUC proposals.

The onus is now on the Government to explain why they’ve:

1. Rejected the other BTUC proposals;
2. Failed to offer alternative proposals beyond the mere $5 million;
3. Insisted on furlough days as the only option.

The workers actions are no doubt frustrating to some members of the public, but this frustration should be directed not at the workers but at Government for its apparent intransigence – or lack of imagination in suggesting alternatives.

Next Steps?

I think it’s clear that there is a huge trust deficit between the BTUC and the Government now.

This doesn’t mean the situation cannot be negotiated and an acceptable resolution reached, however it does make achieving that even harder.  How it plays from here is hard to tell.

The BTUC have already announced a new membership meeting tomorrow at 0900hrs.  I think it’s fair to expect tomorrow to be almost a repeat of today – meeting at the BIU followed by a march on Cabinet.

The failure of Government to attend its own talks will have angered many of those who participated on the Monday – expect that to be evident tomorrow.

Public schools have already announced they’ll be closed tomorrow, and I would expect public transport to be mostly down as well, at least until the afternoon.  This will of course have a knock-on effect in the private sector.

I also expect the Government is reaching out to the BTUC overnight trying to resolve thins in advance of tomorrow.  Potentially this might lead to an announcement tomorrow morning at the 0900 meeting.

As noted though, the Government’s actions on Monday have angered many, it won’t be easy to contain the memberships righteous anger.

I’d also expect the Public Bodies Reform Bill and the push to change certain categories of labour to ‘essential services’ to be renewed from the Government side.

If the Government decides to engage in a game of chicken with the unions then this is just going to escalate, perhaps even to 1981 proportions.  The upcoming 50th anniversary of the Belco riots will no doubt colour industrial discontent if the Government insists on playing hard-ball here.

Again, this doesn’t have to escalate.  However, from what I’ve seen – and especially on the basis of the document reviewed above – the ball is in Government’s court as to whether or not this escalates.