GWU warns employers it will not accept changes to COLA mechanism

The mandatory wage increase next January could be around €10 per week, the highest in decades with the GWU shooting down a proposal by the Chamber of Commerce not to award the COLA to workers who received a raise

Wages could be expected to increase by around €10 per week from January according to the COLA mechanism
Wages could be expected to increase by around €10 per week from January according to the COLA mechanism

The General Workers’ Union has warned business lobbies it will not accept any changes to the cost of living mechanism.

The union was reacting to a budget proposal floated recently by the Malta Chamber of Commerce suggesting that workers who received a raise this year should not receive the full COLA.

The COLA mechanism determines the mandatory weekly wage rise at the start of every year and is based on the retail price index – a basket of goods, most of which have seen prices skyrocket.

The wage increase is announced during the budget and RPI data is suggesting that this could be around €10 per week from January.

The GWU said the COLA mechanism that came into force in 1990 was agreed between all social partners – employers, trade unions and government.

“During the last 32 years, the agreement has never changed, and the proposal being made by employers will result in a violation of the law,” the GWU said in a statement on Wednesday.

“When in the past an employee was given a few cents according to the mechanism, it was accepted because it was according to what was agreed, so now that the cost of living adjustment will be high, it must not be touched either,” the GWU insisted.

It also refuted employer remarks that the high COLA increase would render Maltese businesses uncompetitive. “The government is taking several measures to maintain competitiveness, by absorbing the cost of electricity, water, fuel and cereals,” the GWU said.

The union noted that Malta has remained among the European countries with the lowest inflation rate.

“In a historical context, this mechanism agreed between the social partners helped to stabilise industrial relations, since it addressed inflation. If we go back from this it will definitely create industrial unrest,” the union warned.