The Malta Employers’ Association insisted this afternoon that any further raising of the cost of living wage adjustment for this year was 'out of the question'.

It warned that it would instruct its members not to pay out any additional cost of living increases even if they were forced on them by government.

The MEA was reacting to statements by unions that they will call for an energy benefit or increased cost of living adjustment in view of the petrol, gas and milk increases and other increases expected this year.

The cost of living adjustment (COLA) for this year, announced in the Budget, was €1.16 weekly.

The MEA said that companies were also hit hard by the increases in fuel prices, and that, besides COLA, employers are also facing higher social security contributions as part of the pension reform.

"Raising COLA at this stage will only create further inflationary pressures and will contribute towards a wage price spiral that will have a negative effect on the country’s competitiveness," the MEA said.

The association said it also wanted to remind the unions that they were always inflexible whenever employers wanted to discuss a revision of the COLA mechanism.

"In fact, the unions refused to discuss a revision in the COLA increase of €5.82 which was given in 2010, even though this could have resulted in job layoffs during a period of recession. The reason given by the unions at the time is that COLA is an agreement which was reached years ago and that employers are bound to honour that agreement. The unions also contended that COLA has for years contributed to social harmony and stable industrial relations."

The MEA added that agreements were binding to all parties involved and unions could pick and choose the time and terms under which such agreements should be broken. Unions were also represented on the Retail Price Index board, which was the body that measured inflation, so they knew only too well that the computation of €1.16 for 2011 was based on agreed parameters and objective computation, a fact known since September 2010.

The MEA also warned it would instruct its members not to pay out any additional cost of living increases even if it was forced on them by government.

See also:

http://www.timesofmalta.com/articles/view/20110106/local/unions-propose-energy-compensation-changes-to-cola

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