News | Wednesday, 09 September 2009

MEA pushing to replace COLA increase with one-off bonus

Karl Stagno-Navarra

The Malta Employers Association (MEA) has proposed to government that employees should be given part of the COLA increase as a bonus for 2010 without having their income affected.
Interviewed by Business Today (See page 9), MEA Director-General Joe Farrugia explained that the proposal “should not be an issue for the unions,” and added that the MEA is also recommending that should real GDP growth be positive during the second and third quarters of 2010, which will probably be the case, the amount given as a bonus will be added to the COLA for 2011.
“In this way, employees’ earnings will not be affected at all. We are stressing that this is a short term measure that will give a slight breather to employers during 2010, which as explained earlier is a critical time for businesses,” he said.
Government would be shouldering almost half of the cost-of-living compensation next year if the proposal by employers to share the burden is taken up in the next budget.
In a survey compiled by the MEA, about 20 per cent of companies are expect to cut jobs if the cost-of-living adjustment (COLA) ranges between €5 and €7 weekly in 2010.
The survey was conducted among the association’s members and dealt with the impact of COLA on businesses during a recession.
“Numerous companies will find it difficult to match the projected increase per week for each employee, and it will open the floodgates to mass unemployment,” Farrugia warned.
The MEA - he said - was against the current mechanism that linked wage increases to inflation and was only proposing the arrangement to tackle what it described as the “destabilising effect” of COLA in times of recession.
“The fact that government has not replied positively to MEA’s recommendation does not put us on a confrontation path,” he said, while adding that during the coming weeks, “MEA will work hard, as an Association and also through its input at MCESD, to convince government that our proposal is in the best national interest, and that, given the current circumstances, it will work in the interest of all social partners.”

See interview



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09 September 2009


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