Union loses lawsuit about cost of living adjustment

POSTED: 03/11/14 12:24 AM

St. Maarten – The government is under no obligation to pay the cost of living adjustment over the years 2011 and 2012 to civil servants, the Court in First Instance ruled yesterday in summary proceedings. The government does not have to index the salaries over these two years by 4.6 and 5.4 percent respectively either.

The union argued at the court hearing on February 14 that the state is obliged to adjust the salaries because the government has paid the cost of living adjustment for decades without any problems. The union’s attorney, Monique Hofman, said that civil servants consider the adjustment as an acquired right and that they counted on the payments in 2011 and 2012 as well.

The court based its decision to reject the claim on the country’s salary-policy for civil servants, written in 2007 and implemented in 2008. The policy states that a correction for inflation is an instrument to maintain the purchasing power and that this is not the same as a salary-increase. The policy states furthermore clearly that the cost of living adjustment will be applied “depending on financial resources.” The Executive Council of St. Maarten decides on a year-to-year basis whether it is possible to pay the adjustment. Since St. Maarten became a country on 10-10-10, the decision is in the hands of the minister of finance.

Attorney Richard Gibson Jr. told the court that the country is under no obligation to index the salary scales every year.

The court ruled that the union’s claim cannot be based on a regulation established in public law, nor could the union have “any justified confidence” that the government would pay the adjustment over the years 2011 and 2012. The policy states that there must be money available to make the payments, and the executive branch has to take a decision about it, the court ruling states.

The court ruled that the unions position that it could rely on the payments in spite of the government policy, requires further investigation, but that there is no space for such an investigation within the framework of summary proceedings.

The union claimed that the adjustment has been paid to its members over the past two decades, but the country countered this position with motivated arguments. “Therefore the court cannot assume that the union’s position is correct,” the ruling states.

Even if the claim were correct, this would not necessarily mean that cost of living adjustment payments are an acquired right, the ruling states. “Apparently the country has deemed that it is not possible to pay the adjustment over the years 2011 and 2012. The members of Wicsu/PSU will have to accept this for now.”

The court ordered the union to pay the 1,500 guilders for the costs of the lawsuit.

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