St. Vincent and the Grenadines is expected to debate pension reform as part of the Budget Debate this week.
Pension reform has been a hot button issue with potential political fallout — a veritable can that administrations past and present have kicked down the road.
Executive Director of the National Insurance Services has warned that reforms will have to take place by 2024 if “draconian changes”, for example, increasing NIS contribution rates by 10 percentage points are to be avoided.
It is in this context that Minister of Finance Camillo Gonsalves is expected to outline the options in his Budget Address this evening (Monday).
However, based on the legal arguments advanced by a lawyer in the vaccine mandate trial last month, the government may be limited in what it can do to address the situation as far as existing workers are concerned.
Some public servants in SVG retire with a pension that is up to 120% of their salary.
This is because they collect a government pension, to which they make no contribution, as well as the contributory NIS pension.
During the vaccine mandate trial, a lawsuit against the government over its dismissal of workers for failure to take a COVID-19 vaccine by December 2021, Dominican lawyer Cara Shillingford-Marsh argued that the claimants are entitled to pensionable benefits which are protected by section 88 of the Constitution.
She said this protection is a deeply entrenched clause of the nation’s supreme law.
“… essentially, the law in relation to pension rights cannot be amended to make it less favourable to the individual,” Shillingford-Marsh argued before Justice Esco Henry, who has said that her ruling will be handed down this year.
“And we’re submitting that by changing the definition of ‘abandonment’ in regulation 28(1) or by proposing to change the definition of abandonment, indirectly the impugned regulations had the effect of changing the law or changing the claimants’ rights to the pension,” the lawyer argued.
Hundreds of public sector workers, including educators, nurses, and police officers were fired from their jobs, under a statutory rule and order — a law passed by the Cabinet of Ministers — deeming them to have abandoned their job if they failed to take the jab within the specified timeframe.
The workers were deemed to have abandoned their jobs even if they physically continued to attend work and perform duties up to the day they were given dismissal letters.
Shillingford-Marsh pointed out to the court that the Pension Act specifies the situations or circumstances in which an individual would qualify for a pension.
“And the circumstances do not include the situation where an individual has abandoned his or her job. That is not included in the Pension Act,” she told the court.
She noted the case of Elvis Daniel, an opposition politician who was forced to resign his job at the last minute in order to be nominated as a candidate in the 2010 general elections.
Daniel, as well as Kenroy Johnson and Addison “Bash” Thomas, also of the opposition New Democratic Party, had relied on the collective bargaining agreement he Teachers’ Union had signed with the government five years earlier.
The agreement guaranteed up to six months unpaid leave for teachers to contest general elections and to return to their posts, all benefits intact, if they were unsuccessful.
However, Prime Minister Ralph Gonsalves, one of the signatories to the agreement, said the election leave provision was “aspirational” as it contravened the constitution. He claimed that all the parties knew this when they signed.
The teachers were forced to resign their jobs, putting their benefits, including pensions, at risk.
Shillingford-Marsh noted that in Daniel’s case, the Eastern Caribbean Court of Appeal held that pension benefits would be amenable to protection as property rights under Section 6 of the Constitution, unless the deprivation of benefits arise from a lack of qualification or entitlement to it.
She said that in the vaccine mandate case, the government was supposedly arguing that the claimants were not entitled to pension benefits.
“We are submitting that this argument is erroneous, because the only reason why the claimants are being prevented from getting pension benefits is that they are deemed to have abandoned their jobs and, therefore, they cannot qualify for a pension.”
She said this is what made the SR&O under which they were dismissed “unlawful”.
“It is an interference with your pension rights,” the lawyer reasoned.
“In this case, the appellants are entitled not only to a declaration that the property rights guaranteed by Section 6 of the Constitution has been breached, but an assessment of damages for that breach, as a mere declaration would not be adequate, given the nature of the breach in determining.”
She argued that there is no rational connection between depriving individuals of their pension rights, “making them possibly destitute during their elderly years”, and protecting public health — as the vaccine mandate purported to do.