_______________________________________ ________________________________________

1

Sectoral Presentation 2015-2016

Labour Market Reform, Productivity and

Social Protection

Consolidating the Gains

The Honourable Derrick Kellier, CD, MP

Minister of Labour and Social Security

Tuesday, April 21, 2015

Gordon House

_______________________________________ ________________________________________

2

r. Speaker, I wish to once again thank the Prime Minister, the Most

Honourable Portia Simpson Miller for having the confidence in me to

manage the portfolio of Labour & Social Security. I wish to thank the

entire management team and staff of the Ministry of Labour and Social Security,

my adoring constituents and my political team members of South St. James,

members of the Cabinet, my family and colleagues on both sides of this

Honourable House, for the sterling support offered to me as a Member of

Parliament and member of the Executive branch of the Government throughout the

2014-2015 legislative period.

I extend thanks also to the Ministry‟s long list of external stakeholders in the

private sector, the trade union movement, and various government departments.

They all continue to prove most willing to partner with us in shaping the social and

labour market policies and programmes befitting a modern developing society like

ours.

Permit me also, Mr. Speaker, to pause briefly and offer thanks and commendation

to our former Permanent Secretary, Mr. Alvin McIntosh, for his 40 years of

outstanding service to the public sector of Jamaica and in particular his 25 years as

Permanent Secretary in the Ministry of Labour and Social Security. His

contribution to the work and progress of the Ministry has been legendary; and I am

sure I speak for all on both sides of the isle in this Chamber in extending best

wishes to him on his retirement.

He has been replaced by Mrs. Colette Roberts Risden, and I warmly welcome her

to the Ministry of Labour and Social Security. Mrs. Risden is no stranger to the

Ministry having served for 11 years prior.

Mr. Speaker, I propose within the time allotted to me this afternoon to confine my

presentation regarding the Ministry of Labour and Social Security within the

context of the theme: “Labour Market Reform, Productivity and Social

Protection – Consolidating the Gains.”

But before I proceed, I wish to lay on the Table of the House two documents the

2014/2015 Annual Performance Report, and the Labour Market Trends and

Prospects for Employment Opportunities in Jamaica- April 2015.

M

_______________________________________ ________________________________________

3

ECONOMIC GROWTH AND SKILLS-SET DEFICIT

A careful distillation of the core findings in these two reports, Mr. Speaker,

confirm that from a labour market point of view, the Government‟s macro-

economic performance under the four-year Extended Fund Facility of the

International Monetary Fund (IMF) continues to exhibit signs of a return to

stability and confidence in the economy.

This bodes well for the investment- friendly climate in the country for both local

and foreign capital, and reflects the tremendous work undertaken by the tri-partite

machinery – Government, the trade unions and the private sector – in maintaining

a stable industrial relations environment over these past three (3) years. We have

had a total of 356 reported industrial disputes in the 2014/2015 period compared to

363 and 396 in 2012/2013 and 2013/2014, respectively.

I wish to thank and commend the Industrial Disputes Tribunal (IDT), the trade

union movement and the Jamaica Employers‟ Federation (JEF) for contributing

admirably towards this success.

But, in spite of this, Mr. Speaker, we continue as a country to face the vexing

problem of a skills-set deficit even as the economy grows and the capacity for

investments deepens in small and medium enterprises. Objectively, there is an

urgent corresponding need for the upgrading of the country‟s skills-set so as to

better increase our competitiveness in the global economy.

Mr. Speaker, this salient point is often overlooked by those who feel compelled to

assault the public space with suggestions encouraging our enterprising young

people to abandon their homeland in search of job opportunities overseas.

We, in the Ministry of Labour and Social Security, reject this suggestion as a

viable option facing our human resource. Educating our people here at home to

migrate is the height of folly. From where we sit in the Ministry of Labour and

Social Security, this approach represents not only a case of misplaced priority, but

more important, is regarded as a downright dangerous proposition.

_______________________________________ ________________________________________

4

LABOUR MARKET REFORM IN THE “NEW ECONOMY”

We have chosen to respond to this challenge instead, Mr. Speaker, with a laser-like

focus on the issue of the identification of the demand for new and appropriate

skills-set in this “new economy”, and setting about determining the training needs

and infrastructure necessary to underpin this new reality.

In fact, Mr. Speaker, in the context of the “new economy” which this

Administration is engaged in building through fiscal discipline, debt sustainability,

improved public financial management and accelerated reform of the public sector,

this new focus now forms the corner-stone of the modus operandi of the Ministry

of Labour and Social Security under my policy watch going forward into the 21st

century.

It is a focus from which we do not intend to flinch because we consider it

necessary – and eminently sensible - if we are to lessen precipitously the perceived

frustration on the part of our proven adaptable and enterprising young people, and

reduce the incidents of them opting to leave our shores to build up the competitive

capacity of other countries.

Honourable Derrick Kellier on a recent tour of Berger Paints Jamaica Limited on Spanish Town Road,

Kingston.

_______________________________________ ________________________________________

5

My team and I, are of the unshakeable view, that as the country moves into the

most critical phase of its economic reform programme, social and economic

transformation becomes impatient of debate, if this country is ever to create real

and sustainable pathways to growth and development.

And in all of this, Mr. Speaker, transformation of our labour force to ensure that

we become highly productive, is critical.

LABOUR MARKET REFORM COMMISSION (LMRC)

Following on a promise I made in my Sectoral Presentation last year, we have

worked tirelessly in establishing the 18-member Labour Market Reform

Commission (LMRC) under the leadership of Dr. Marshall Hall. The Commission

should complete its work in two years.

Mr. Speaker, the Commission will seek to ensure that our labour market structures,

regulations, policies, programmes and projects are all compatible with modern best

practices so as to facilitate higher levels of efficiency, productivity, and economic

growth. In this regard, the Commission is expected to make recommendations to

the Government in the areas of:-

Education and training

Productivity

Technology and innovation

Labour policies and legislation

Social protection, and

Industrial relations.

In short, the LMRC will seek to establish the platform on which gains made in the

reform of the labour market over the past three years can be consolidated to propel

us forward as a country.

_______________________________________ ________________________________________

6

LABOUR MARKET INFORMATION SYSTEM (LMIS)

As we look to the future Mr. Speaker, we are responding to the challenge of the

skills-set deficit in the “new economy” by the institutional strengthening of our

Labour Market Information System (LMIS) within the Ministry of Labour and

Social Security.

Throughout the period of the past year, we have done a considerable amount of

work in-house in the area of labour market intelligence and information.

Mr. Speaker we have implemented, career development initiatives and

employment opportunities within the private and public sector.

And in this regard, one of the reasons for tabling the document titled “Labour

Market Trends and Prospects for Employment Opportunities in Jamaica-

April 2015” is to allow for a better understanding of where the genuine potential

lies for employment in Jamaica in the “new economy”.

In our research we have found that the greatest potential for employment in

Jamaica today is in the areas of:-

Business Process Outsourcing (BPO)

Agriculture

Tourism

The creative industries

Health services

Green Economy

Alternative Energy

The Logistic Hub and

Information, Communication and Technology

But, what we have also found, Mr. Speaker, is that among the critical skills which

will be required to move the “new economy” forward are:-

Customer service

Literacy and numeracy

Information literacy

Social media literacy

Presentation skills

Technology literacy

_______________________________________ ________________________________________

7

Leadership and responsibility

Foreign language skills (eg: Spanish, Mandarin)

Entrepreneurial skills.

As a consequence, we have taken this information on board and are moving with

alacrity to set the benchmark in the standard for Labour Market Information

System (LMIS) in Jamaica.

Since November 2013 we have launched a job placement component of the LMIS

website; and in June of this year this initiative will be expanded to include a

Labour Market Intelligence and Skills Bank component. Mr. Speaker, this

component will enable the Ministry to provide services to the public through

web-pages dedicated solely to labour market intelligence, education and training,

career development and the maintenance of an employer and investor skills bank.

I am proud to say, Mr. Speaker, that this represents a major advancement in the

Mission and strategic thinking of the Ministry of Labour and Social Security.

We can no longer be regarded as the “Farm Worker Ministry”.

In short order, we will be considered the cutting edge Ministry for labour market

information and reform in Jamaica.

Already, the absolute correctness of this policy shift is evident in the fact that since

November 2013, the total number of registered job-seekers on the LMIS website

amounts to some 8,186 persons with a corresponding 236 registered companies

and employers.

Mr. Speaker, the scope for growth in this new direction is enormous!

In addition, Mr. Speaker, the number of actual jobs registered on the website has

moved from 8 in 2013 to 361 at present, with 291 persons already placed in

employment locally via this medium.

Furthermore, Mr. Speaker, note must be taken that local employers and foreign

investors will be provided, via the webpage, with information on the country‟s

labour laws; the general public will have timely and reliable information on

employment opportunities, including regional and international employment; and

we will be able to link our graduates with job opportunities in the public and

private sectors.

_______________________________________ ________________________________________

8

So, the ultimate aim in this new, dynamic, and historic journey, Mr. Speaker, in the

context of the labour market challenges within the “new economy”, is to establish

“one-stop” fully functional career centres throughout the length and breadth of

Jamaica that will cater to the combined needs of employers, job seekers, overseas

investors, and other stakeholders.

This will eliminate much of the chaos that presently attends our labour market,

especially in the areas of large foreign investment projects in the tourism sector

often leading to unnecessary and unwarranted industrial relations strife.

OCCUPATIONAL SAFETY AND HEALTH (OSH)

Mr. Speaker, we in the Ministry of Labour and Social Security are determined to

have the long awaited Occupational Safety and Health Bill (OSH) passed into

law in the 2015/2016 legislative year.

In preparation for this eventuality and for a comprehensive Occupational Safety

and Health programme in Jamaica by September 2015, the Ministry will be

introducing for the first time, the “workers passport”.

This document will be introduced in the construction industry with the objective of

ensuring that every worker on a construction site is exposed to a five (5) hour

Occupational Safety and Health basic training programme.

When the system is fully implemented, Mr. Speaker, it is expected that workers on

these work sites will carry their passports indicating their certification, experience,

competence and skill to work in a productive and safe manner. These passports

will not only be the warranty that the workers are competent and equipped to

operate safely on work sites. They will also indicate that these workers are

competitive in an economy capable of operating at the highest standards in the

international labour market.

OVERSEAS EMPLOYMENT PROGRAMME

Mr. Speaker, another aspect of the transformation of our labour market in which

we are passionately involved concerns the Overseas Employment Programme

where Jamaican workers are temporarily employed overseas.

_______________________________________ ________________________________________

9

I would like to encourage skilled Jamaicans to prepare themselves to take

advantage of the demand of the new skills offerings in the non-traditional areas of

the North American Labour Market.

Currently, Mr. Speaker, the Ministry cannot find enough highly skilled class 1,

tractor drivers or heavy duty mechanics to satisfy the demand for these skills,

particularly in the Western Provinces of Canada.

But again, Mr. Speaker, the challenge we are likely to face in the long-term in this

regard centres around our ability to supply such skilled workers on a consistent and

reliable basis.

To counter this, our local training institutions must endeavour to direct increasing

numbers of trainees to these areas of training in preparation over the long-term to

take full advantage of the job opportunities available overseas.

Up to February of the 2014/2015 fiscal year, Mr. Speaker, some 13,854 Jamaicans

were employed under the Overseas Employment Programme – with Canada

accounting for 7, 085 workers.

Throughout the same period, 97 drivers, heavy duty mechanics and auto service

technicians took up employment in Canada, while 177 persons were employed in

the hospitality sector of that country.

The numbers for the United States Agricultural and Hospitality programmes are

also trending upwards as well, Mr. Speaker, at 4, 217 and 1,135, respectively.

It is for this reason we continue to take the Overseas Employment Programme

seriously given its tremendous contribution to the gross domestic product of the

country. Last year, for example, Jamaica benefitted in remittances from Canada

alone in the form of savings sent home by the workers through the Ministry to the

tune Seventeen Million Two Hundred and Forty Six Thousand Six Hundred and

Ninety Four Canadian dollars (Can$17,246,694).

_______________________________________ ________________________________________

10

In light of this, I am appealing to our skills training institutions to partner with us

in identifying where the new skills are needed in the Overseas Employment

Programme so that the country can consolidate the gains made thus far in some

fifty years of existence of the Programme and prepare for the employment

opportunities in the next decade of the twenty-first century.

Mr. Speaker, let me use this opportunity to advise Members of this Honourable

House that the Ministry will be undertaking a pre-selection exercise in July of this

year to recruit 2000 persons for the farm work programme, the details of which

will be announced at a later date.

PRODUCTIVITY PARTNERSHIPS

Mr. Speaker, the on-going “Productivity Revolution” campaign in the country

spearheaded by the Ministry‟s Jamaica Productivity Centre (JPC) came about as a

result of the need to bolster the national Growth Agenda. This is against the

background that in the 13 year period 2001 to 2013, only four out of eleven

industries registered positive productivity growth.

Honourable Derrick Kellier (2nd right) and Senior Advisor, Everton Pryce (right) meet with one of the longest-serving Farm

Worker in Canada.

_______________________________________ ________________________________________

11

Since then, Mr. Speaker, great strides have been made in building awareness and

facilitating productivity growth as a key pillar for national success. The Jamaica

Productivity Centre has been working to build the capacity of firms to improve

their productivity levels through targeted workshops and seminars coupled with

technical assistance and productivity audits to enable businesses to deliver

responsive, high quality and cost effective goods and services.

This has involved forging strategic functional partnerships with stakeholders in the

trade union movement, the private sector, other Ministries, Departments and

Agencies (MDAs), the Japanese Government, secondary and tertiary institutions,

the youth movement, and the recently formed Labour Market Reform Commission.

Our ultimate goal in pursuing this “revolution”, Mr. Speaker, remains the

transformation and improvement of the quality of our labour force so that we can

increase our chances of attracting quality investors necessary for the creation of

productive employment, guarantee growth in national output, boost profits, tax

revenues and wages and lead to an increase in infrastructural development and

social services.

Honourable Derrick Kellier on a productivity tour of The Uniform Centre garment factory in Kingston with Mr.

David Wan (3rd left), President of The Jamaica Employers' Federation and Mr. Alvin McIntosh, Permanent

Secretary.

_______________________________________ ________________________________________

12

THE NATIONAL INSURANCE FUND (NIF)

Turning to the National Insurance Scheme (NIS), Mr. Speaker, let me say from the

outset, that contrary to public statements, the Scheme is far from being insolvent or

approaching anything resembling bankruptcy. The National Insurance Fund (NIF),

which is the brain-child of the Most Honourable Prime Minister, is today in a most

robust state of health.

As I speak, the cumulative net assets of the Fund stands at J$71.231 Billion –

representing an increase of over J$3.35 billion, or approximately 5%, over the year

ending March 2014. We have never, in the history of the Fund, faltered in our

pension payments obligations to the Jamaican people – and we do not intend to

start now.

But there is the challenge of a gap existing between contributions into the Scheme

and what is paid out in NIS pension benefits to the tune of close to J$3 Billion.

We have, however, addressed this problem by exercising pro-active management

of the Fund.

We invited the actuaries to study the problem and their investigation was

completed some three months ago.

Their recommendations are currently under review by a committee appointed by

the Cabinet. Once this Committee has completed its work, its findings will be

forwarded to the Cabinet, for a decision to be made on the level of contribution and

benefit rates that will be required to ensure the continued viability of the NIF. This

Administration is committed to taking all necessary steps to avoid any fall out in

the Fund.

Mr. Speaker, I want to also inform this Honourable House that the NIF has

increased its loan value to the small and medium enterprise sector under the

NIF/SME Credit Facility from J$1 Billion to J$11/2 Billion. In addition, the Fund

has taken the decision to increase the individual loan limit to borrowers from $5

Million to J$30 Million in an effort to stimulate job creation and increase

opportunities for skilled workers throughout Jamaica.

_______________________________________ ________________________________________

13

EMPOWERING PERSONS WITH DISABILITIES

Mr. Speaker, Jamaicans of all class, colour and creed ought to rejoice at the recent

passage into law of the first ever Disabilities Act 2014 treating with the integration

of persons with disabilities in all areas of national life, guaranteeing their progress

as citizens of this country, so that going forward they can unleash their true

potential in the pursuit of whatever they want to do in fulfillment of personal and

national development goals.

The Jamaica Council for Persons with Disabilities (JCPD), with the support of the

Inter-American Development Bank (IDB), has already registered approximately

30,000 persons with disabilities in the country under the Support to Improve the

Lives of Persons with Disabilities project.

And for the year going forward, Mr. Speaker, we will be focused on establishing

the JCPD into a body corporate under the new Act which will encompass a

Disabilities Rights Tribunal to reinforce and promote recognition and acceptance

within Jamaica of the principle that a person with a disability has the same

fundamental rights as any other person in Jamaica.

Honourable Derrick Kellier greets students from the Abilities Foundation. The recently

passed disabilities act makes provisions for persons with disabilities.

_______________________________________ ________________________________________

14

EARLY STIMULATION PROGRAMME

Mr. Speaker, in reporting on the activities of the Early Stimulation Programme

within the Ministry for the period under review, I want to single out the Digicel

Foundation and the IDB for their effort in supporting the institutional strengthening

and capacity building of the Programme in the form of two (2) new facilities. The

Early Stimulation Programme currently caters to 1,800 children with

developmental disabilities.

Mr. Speaker, the number of children with various types of developmental

disabilities in Jamaica is on the increase. Plans are on the way in the next financial

year to expand the ESP Programme in the Western Region of the country.

POVERTY ALLEVIATION

Mr. Speaker, I want to reinforce the point that the Administration of which I am a

part remains committed to finding creative ways to arresting the negative fall-out

in the social sector and the unfavourable movement in the rate of poverty on

account of trying to fix the problems endemic to our economy. In this, we are not

daunted, Mr. Speaker, despite the bogeyman promise by the Opposition to

eliminate poverty from our shores if and when it forms the Government.

For our part on this side of the House, we remain warriors for the vulnerable and

socially challenged and we make no apology for this.

Happily, Mr. Speaker, I can report that the recurrent budget of the Ministry of

Labour and Social Security has been increased in the 2015/2016 Financial Year to

J$3.228 Billion from J$2.872 Billion in the 2014/2015 Financial Year, and, as

such, we have already begun to re-direct the resources of the Ministry towards the

further empowerment of those in poverty.

To consolidate the gains made in tackling poverty under the Programme of

Advancement through Health and Education (PATH), an estimated J$4.3 Billion

has been approved for cash transfer payments to families, and a 15% increase was

afforded to all categories of beneficiaries except the elderly who received a 67%

increase in the 2014/2015 financial year.

_______________________________________ ________________________________________

15

We have, furthermore, impacted some 2,371 PATH students with post-secondary

grants of between J$15,000 to J$50,000 valued at J$59,533,213. For the 2015/2016

financial year, we propose to consolidate these gains further by expending some

J$70 Million under this programme.

For the 2015/2016 financial year, Mr. Speaker, we propose also to increase to

J$100 Million, the PATH tertiary bursary budget up from J$38.8 Million in the

2014/2015 financial year –all in an effort to consolidate the gains achieved so far

in tackling the endemic problem of poverty.

And we propose to go further in this vein and continue with the payment of

transportation allowances to students at the secondary level under PATH who have

demonstrated marked to chronic non-compliance in their attendance record at

school.

We are going to spend J$72 Million in the 2015/2016 budget on transportation

allowances for 2,500 students – so as to consolidate the gains achieved thus far in

the fight against poverty and ignorance.

Mr. Speaker, we will remain resolute in our efforts to stem the cycle of inter-

generational poverty in Jamaica; and we have targeted children under PATH in the

educational system because we want to break the cycle of dependence on hand outs

and move our vulnerable citizens away from the culture of welfare to one of wealth

creation.

PATH Top Achievers in attendance at the Awards Ceremony in July 2014.

_______________________________________ ________________________________________

16

CHERISHING OUR SENIOR CITIZENS

Mr. Speaker, the Ministry of Labour and Social Security through the National

Council for Senior Citizens (NCSC) continues to support the gains of our senior

citizens as active members of this society beyond their formal years of service to

nation building. Not only are our senior citizens living longer and actively

contributing through social, cultural and educational pursuits to the further

development of the country, but their numbers are growing noticeably. Older

persons now make up 11.9 % of the total population of Jamaica, or some 324,100

citizens.

In light of this, we have increased our overall budgetary allocation for this

important demographic segment of our population by 10% over the 2014-2015

period. In particular, the budget for the National Council for Senior Citizens

(NCSC) has been increased from J$72-Million to J$79-Million, that for the Golden

Age Home from J$265-Million to J$289-Million, while that for the Denham Town

Golden Age facility has increased from J$18-Million to J$20-Million.

SOCIAL INTERVENTION PROGRAMME

Mr. Speaker, the Social Intervention Programme (SIP) continues to exceed all

expectations in terms of providing employment opportunities for young Jamaicans,

facilitate training and skills transfer, foster independence and self-reliance through

educational and entrepreneurial assistance.

Some 102 beneficiaries were assisted between April 2014 and March 2015 with

entrepreneurial grants totaling J$7.2 Million – representing an increase of over 100

percent when compared to the previous financial year.

Similarly, some J$24.4 Million was disbursed over the same period in education

grants for secondary and tertiary schooling and skills training to over 400 youths –

representing an increase of 65 percent over the previous financial year.

CONCLUSION

In closing, Mr. Speaker, permit me to say that the Government‟s prevailing

experience with economic re-balancing offers the country a window of opportunity

for growth and development worth grasping with urgency. It provides us with an

opening to reform and restructure an economy that has endured productivity

stagnation for far too long.

_______________________________________ ________________________________________

17

In this context, labour market reform becomes critical to our national Growth

Agenda, and this explains why the Ministry of Labour and Social Security took the

initiative to spearhead the passage into law recently of the Employment (Flexible

Work Arrangements) (Miscellaneous Provisions) Act, The Disabilities Act

2014, the establishment of the Labour Market Reform Commission (LMRC),

the revamping of our Labour Market Information System (LMIS), and the

commencement of the „Productivity „Revolution‟ campaign.

These holistic labour market reform efforts, when combined, will enable us as a

country to embrace our long-term vision of transforming Jamaica into a place

where we will want to live, do business, work, and raise our families.

The Ministry of Labour and Social Security is perched on the threshold of a new

and exciting mission and strategic focus. We want, at all times, to protect the

Jamaican worker, especially in an environment of the importation of foreign

workers accompanying foreign investment projects.

When gaps arise in the availability of local skills for foreign investment initiatives,

however, if we are not to frustrate the progress of investment projects, then such

skill- gaps have to be filled. In our way of thinking, the best way to protect the

welfare of local workers is to equip them through training with the relevant skills-

set.

Hence, if we are able as a society to improve labour relations and the creative re-

direction of resources towards enhancing human capital – inclusive of vulnerable

individuals within the society – then we will not only protect our hard-earned

national gains; but more significantly, we will be able to inspire national

confidence and co-operation in Project Jamaica.

I end my presentation, therefore, Mr. Speaker, by inviting partnership on the part

of all our citizens in moving Jamaica forward to grasp the opportunities that await

us in the global economy.

I thank you, Mr. Speaker.

Hon. Derrick Kellier, CD, MP

Minister of Labour and Social Security

_______________________________________ ________________________________________

18

NOTES