by Dr Lawrence A Joseph
The issue as to whether public officers in Grenada are entitled to pensions and gratuities from the government has caused emotional kickbacks from many persons.
It is quite understandable that persons who have worked for many years with an institution and would like to retire in financial comfort would be very upset if they get to understand that the financial returns which they would receive is much less than what they anticipated. It is important therefore to examine the legal dimensions of pension entitlements for those public officers in order to get a better insight into the issue.
At different times in Grenada’s history different Acts of Parliament were enacted to provide for the payment of pensions and gratuities to public officers by the government of Grenada. These were the Police Pensions Act of 1931, the Pensions (Prison Officers) Act of 1935, the Pensions (School Teachers) Act of 1943 and the Pensions Act of 1950 for officers in the general public service (“the Pensions Acts”). They were all pension schemes in which public officers made no financial contributions. All public officers were paid pensions and gratuities under these Pensions Acts until the Peoples’ Revolutionary Government (PRG) purportedly enacted the Pensions (Disqualification) Act in 1983.
This act sought to disqualify public officers who were appointed after 4 April 1983 from being entitled to pensions and gratuities under the Pensions Acts. Instead, the PRG only entitled the payment of pensions under the National Insurance Act which was also passed in 1983. The pension benefits however, which are provided by this scheme are much less generous than previously received by public officers. When the Laws of Grenada were revised in 1990, the provisions of the Pensions (Disqualification) Act were incorporated into each of the Pensions Acts.
For over 27 years therefore the provisions of the Pensions (Disqualification) Act were observed until the High Court ruling in the case of Hermilyn Armstrong v the AG of Grenada in 2010. The ruling was based on the fact that the PRG, being an unconstitutional government could not make valid laws. Indeed, whilst it was a de facto government it was not a de jure one as it did not have legitimacy not being officially endorsed by an election or by referendum. As a consequence, the Pensions (Disqualification) Act of 1983 was ruled to be invalid at the time when it was enacted by the PRG.
It is to be noted however that the PRG was ousted from power in October 1983 and the government of Herbert Blaize was constitutionally elected in December 1984. That government then validated all the Proclamations, Orders and Laws which were passed by the PRG by virtue of the Confirmation of Validity Act No. 1 of 1985, which Act became effective on the day it was gazetted, that is, on 22 February 1985. As a consequence, Hermilyn Armstrong and all other public officers who were appointed after 4 April 1983 but before 22 February 1985 were deemed to be entitled to pensions and gratuities under the Pensions Acts.
It has been reported that 56 public officers were identified as having been appointed during that period and that they were paid over $7 million by the government in recent times for pensions and gratuities. It goes without saying, that public officers who were appointed to the public service after 22 February 1985 would only be entitled to pension benefits under the National Insurance Act which Act was also validated by the Blaize administration. The Pensions (Disqualification) Act is now a valid Act. In accordance with section 92 (2) (b) of the Constitution of Grenada, all public officers are entitled to pension benefits which are existing at the date on which their period of service commenced.
The present government has agreed in principle to undertake a reform of the pension scheme which the government claims must be affordable and sustainable. In this light it proposes to enable public officers to be entitled to 70% of their highest monthly salaries as a pension to be paid in monthly installments at the age of 60 after a stated number of working years. The 70% is intended to be achieved by topping up whatever would be the contribution under the National Insurance Act. However, the bone of contention seems to be that the trade unions are demanding that 25% of pensions (referred to as gratuities) must be paid to public officers as soon as they retire from the public service. There seems to be no legal basis to support the unions’ demand, however, it is subject to negotiations between the parties. It is estimated that gratuities alone may cost the government about $30 million as all public officers who retired after 22 February 1985 would have to be paid. Pensions would amount to much more than this.