PRESENTATION BY THE MINISTER FOR EMPLOYMENT AND LABOUR RELATIONS, HON. IGNATIUS BAFFOUR AWUAH (MP), AT THE ‘MEET-THE-PRESS’ SESSION HELD ON WEDNESDAY, 16TH SEPTEMBER, 2020 AT 10:00 AM.
Colleague Hon. Minister for Information;
Hon. Deputy Ministers;
Chief Directors, Directors and Heads of Departments and Agencies;
Representatives of the Ghana Employers Association;
Representatives of Organised Labour;
Distinguished Invited Guests;
Friends from the Media;
Ladies and Gentlemen;
It is a pleasure for me to be here once again to interact with you and to apprise you of developments in my Sector. As the Ministry responsible for matters relating to Employment and Labour Relations, our core duty is to coordinate all employment interventions across sectors of the economy and to regulate the labour market for decent work outcomes.
This is done by facilitating the creation of decent jobs, ensuring retirement income security, eliminating child labour, protecting vulnerable workers and promoting harmonious industrial relations for sustainable development.
The vision of the Ministry is to ensure decent work standards for all workers in Ghana and Ghanaian workers abroad.
The developments in the Sector could not have happened without the support of H.E. the President, Nana Addo Dankwa Akufo-Addo, who has demonstrated keen interest in the affairs of workers and has participated in all May Day Celebrations in the past four (4) years.
We are also grateful to our Social Partners especially Organised Labour and Employers for their immense support and contribution to the promotion of harmonious labour relations and stability at the labour front.
We also acknowlege our collaboration with Development Partners notably the ILO, EU, GIZ, IOM and KOICA in the sector’s development.
COVID-19 AND THE WORLD OF WORK
Our pursuit of decent work outcomes has been negatively impacted by the outbreak of the novel coronavirus disease (COVID -19). The global pandemic has exposed some challenges of our labour market. Evidence has shown that some workers and their families as well as small and medium scale enterprises (SMEs) have been the worst affected by COVID-19.
Thanks to the strategic measures implemented by H.E. the President and his Government to mitigate the impact of COVID-19 on workers, the general populace as well as enterprises, the labour market has shown some resilience.
Nonetheless, I wish to bring to your attention the impact of COVID-19 to Ghana’s employed population of over 11.2 million workers (GLSS 7, 2019) in the first three (3) months of the outbreak (March-June, 2020).
The reduction in economic activity caused a decline in jobs and resulted in pay cuts for some workers. This was due to losses in working hours across sectors of the economy, particularly in the manufacturing sub-sector and services.
THE PILOT LABOUR MARKET SURVEY
Two (2) months ago, my Ministry commissioned a Pilot Labour Market Survey to assess the impact of COVID-19 on job losses and pay cuts. The survey covered 878 enterprises across the country and involved a total of 44,040 employees. The survey covered micro (1-4 employees), small (5-29 employees), medium (30-99 employees), and large (100+ employees) enterprises. These are the classifications used by the Ghana Statistical Service. The number of micro enterprises covered represents 11.4%, small 59.2%, medium 19.9 % and large 9.5%. In all, 98.5% of the firms covered in the survey are in the private sector with the remaining 1.5% in the public sector. The results of the survey revealed that the pandemic has had a significant impact on workers of some specific industries.
According to results of the Survey, 17,685 out of 44,040 (40%) workers suffered pay cuts. Pay cuts were highest among medium scale establisments with 46% of workers affected and lowest among small scale enterprises (38%).
Sectorally, over 50% of workers in construction and services suffered pay cuts to keep their jobs. Between 29-42% of workers in manufacturing, entertainment and events, sports, hotels and restaurants as well as mining also suffered pay cuts. Pay cuts were lowest in the finance sub sector (5%), followed by shipping/maritime (18.9%).
EXTENT OF PAY CUTS
Among the establishments that adopted pay-cut strategies to keep workers on the payroll, 21 percent reduced wages by 10% or less involving 3,870 workers. Thirty-seven (37) percent reduced workers‘ wages by 10-30%, 29 percent of them reduced wages by 30-50%. These pay-cuts affected 6,766 and 5,067 workers respectively. One thousand, nine hundred and eighty-two (1,982) workers from about 13 percent of the establishments reduced workers‘ earnings by more than 50%.
The impact of COVID-19 resulted in 11,657 job losses representing 26.5% of workers engaged. The incidence of job losses was highest among micro-sized enterprises (36%) and lowest in large scale establishments (23%). In the economic sectors, the highest incidence of job losses of 65% was recorded in the other services (recruitment agencies, media and laundry services), followed by construction (49%), hotels and restaraunts(45%) and private sector education(43%). The shipping/maritime sub-sector together with finance, agriculture, health and social work suffered the least incidence of job losses of 1%.
It is worth noting that there is no known record of job losses in the Public Sector as far as our records are concerned. And here I take the opportunity to express our profound gratitude to H.E. the President for this laudable policy initiative for protecting public sector workers.
As indicated earlier, the roll-out of interventions, gradual easing of restrictions by H.E. the President and return of economic activity in the country has resulted in the restoration of some jobs. Out of the 11,657 job losses, 2,849 representing 24% of jobs have been restored.
NATIONAL UNEMPLOYMENT INSURANCE SCHEME
I am happy to inform you that Government has taken steps to show that the nation is learning lessons from the pandemic. As you are already aware, Government announced its intention of creating a national unemployment insurance scheme for formal sector workers that are likely to lose their jobs as a result of such future occurences. Further to this announcement, a Tripartite Technical Committee has been put in place to come out with the modalities for implementation of the scheme. The scheme, when operational, would focus on providing direct income support to workers who loose their jobs or suffer pay cuts in the event of a social or economic crises. The scheme would also offer opportunities for training, re-training, job search support, apprenticeship and internships to enable those who loose their jobs re-adjust.
Ladies and Gentlemen,
During the early stages of COVID-19, the Ministry observed that low wage earners and unskilled workers were the most vulnerable. Further analysis also showed that workplace transmissions were becoming rampant. In order to curtail the spread of the virus at workplaces, the Ministry in collaboration with the National Tripartite Committee issued a 10-Point Communique on Workplace Safety. The purpose was to consolidate safety protocols of World Health Organization (WHO) and Ghana Health Service (GHS) as well as enhance routine inspections by the Inspectorate Departments of the Ministry.
The Ministry embarked on a nation-wide random inspection of workplaces. I personally led a team to inspect selected workplaces to ascertain the level of compliance with COVID-19 protocols. Some of the institutions visited were in the Manufacturing, Service, Retail and Recyclying sub-sectors. This was to ensure strict compliance with COVID-19 protocols and guidelines outlined by government.
I am happy to report that 80% of the establishments inspected were complying with the guidelines prescribed by Government. I wish to entreat all employers and workers to continue to adhere to the prescribed protocols to ensure safety at the workplace.
CURRENT UNEMPLOYMENT RATE
The total unemployment rate has reduced from 11.9% (GLSS 6) to 8.4% (GLSS 7). Further analysis of the meta data by the Ministry indicates that the unemployment rate has reduced to 7.1% 2019.
According to the GLSS 7, the rate is higher among females (9.2%) than males (7.5%). In terms of regions, Greater Accra recorded the highest unemployment rate of 11.8% followed by Ashanti (10.3%). The Volta Region recorded the lowest unemployment rate of 5.8% followed by the then Brong-Ahafo (6.0%). The youth unemployment rate has also declined from 16.9% to 12.6%.
Since January 2017, the Ministry has continued in line with its mandate to improve the capacities at the National and Sub-national levels for the promotion of decent job opportunities. The Ministry is collaborating with Development Partners to improve the capacity of the Labour Department and its Public Employment Centres (PECs). As a result, eight (8) PECs in strategic locations have been renovated and revamped to enable them provide active labour market services, including job matching and career guidance to job seekers. These centers include Accra, Tema, Cape Coast, Takoradi, Tarkwa, Sunyani, Tamale and the Employment Information Branch (EIB) of the Labour Department (LD). Apart from the routine active labour market functions of the PECs, the main purpose of the renovations and other capacity building interventions is to enable these centers and sections of the Labour Department collect and disserminate labour market information in a timely manner. These, among others, are some of the efforts being made towards the full operationalization of the Ghana Labour Market Information System (GLMIS).
Ghanaian-German Jobs Centre
A Ghanaian-German Job Centre has been established in Accra by the Ministry in collaboration with the German International Development Corporation (GIZ). The purpose of the centre is to enhance the provision of decent employment opportunities for job seekers, particularly, young persons who have the intention of migrating outside Ghana through unapproved routes. Since its inception in 2017 to date, Sixty-five thousand, Two Hundred and Seventy-seven (65,277) persons have accessed services of the centre. Out of this number, Twenty-eight thousand, Nine Hundred and One (28,901) accessed labour market information/career guidance/coaching services. Four Thousand, Two Hundred and Forty-Three (4,243) received start-up and business development services to enable them established their own businesses. Two Thousand, Five Hundred and Twenty-Seven (2,527) were also posted to firms as interns. A total of Two Thousand, Six Hundred and Six (2,606) were placed in available job vacancies. Six Hundred and Fourteen (614) returning migrants also received psychosocial and reintegration support.
Youth Employment Agency (YEA)
In 2017, the sustainability of the Youth Employment Agency (YEA) became a concern to Government. As a result, the Government took some initiatives to transform the Agency and strategically position it for growth and sustainability. This included investing in sustainable growth, promoting inclusive development and job creation and positioning YEA as a facilitator of jobs.
As a result, YEA launched three new flagship programmes. These are YEA Job Centre, the Regional Flagships Programme and the Artisan Directory.
Between 2017 and 2020, One Hundred and Forty-Three Thousand, Nine Hundred and Sixty Three (143,963) Ghanaians have been connected to various forms of employment through programmes and modules implemented by the Agency.
In the coming months, YEA looks forward to rolling out the following programmes as part of efforts to facilitate job creation for the youth. This includes the Work Abroad Programme designed to facilitate placing Ghanaian youth into job vacancies existing in other countries. In the meantime, the Agency has received employment requests from Japan, Australia and the Cayman Islands. The Agency will continue to set up structures at the Regional and District levels to support employment of the youth. The Agency is also planning to roll out other initiatives such as the Ekumfi Chalk Making Programme which is expected to employ over One Hundred (100) youth with disability. The Artisan Directory is also expected to recruit Five Thousand (5,000) beneficiaries.
DOMESTIC WORKERS’ REGULATIONS
Government has passed the Labour (Domestic Workers’) Regulations, 2020 (L.I. 2408) to establish a governance framework for the regulation of domestic work and ensure full labour protection for domestic workers. The new regulation is a precursor to the lifting of the temporary ban on recruitment of domestic workers to the Gulf States. It also provide the basis for executing Bilateral Labour Agreements (BLAs) with destination countries.
The year 2020 marks the commencement of decumulation or the full payment of pension benefits under the Three-Tier Pension Scheme. Effective January, 2020, the Three-Tier Pension Scheme begun the payment of benefits to retirees as and when due. As we speak, every pensioner from January, 2020 is to receive the following pension benefits:
- Monthly pension from SSNIT
- Past Credit from SSNIT i.e. 4% of the accumulated value of contributions from the date of first appointment to 31st December, 2009)
- Tier 2 lump sum benefit from the Occupational Pension Schemes.
Under Tier 3, Corporate Trustees are paying benefits to retirees as and when due.
The Pension Industry has also been impacted by the outbreak of the coronavirus pandemic. Lay-offs, pay cuts and breaks in the operations of many businesses are expected to affect pension contributions for the year 2020 in all the Three-Tiers. The NPRA has already begun an assessment of the effect of the pandemic on the industry.
The current enrolment from the informal sector is approximately 232,000 representing about 3% coverage of the sector. It is important to note that the Third-Tier of the pension scheme was created to encourage contribution from workers of the informal sectors.
Ladies and Gentlemen;
Since 2017, Government has been implementing targeted sensitization and awareness creation on the Three-Tier pension scheme for occupational groups. This has whipped up the interest of informal sector workers not covered by any pension scheme. In order to consolidate the gains, Government is considering the development of a micro-pensions policy to guide efforts at improving informal sector coverage to unlock the huge potential therein.
Hon. Minister, Ladies and Gentlemen,
It is refreshing to note that the achievements that I have recounted have been possible largely because of the cooperation and collaboration with our social partners. This has created a harmonious relationship that supports job creation initiatives and effective management of the labour market. It is my hope that such collaboration and cooperation would continue for the advancement of workers’ rights.
Hon. Minister, Ladies and Gentlemen,
On this note, I would like to draw the curtain on today’s Meet-the-Press encounter and assure you that I will avail myself whenever there are new developments within the sector.