Employers did not object to paying a high cost of living adjustment (COLA) when the computation was high, and likewise there should be no objections when it was low, the Malta Employers Association said today.

In a statement, the MEA welcomed the Prime Minister’s claim that he was going to respect the mechanism.

The public, it said, should be aware that COLA was not determined by government or by agreement between the unions and employer organisations and could only be altered through consensus between the social partners.

Over the years, unions stuck to their position that the mechanism should compensate for price increases, and strongly resisted employers’ attempts to partly peg wage increases to productivity levels.

Tampering with the computation of COLA would increase the uncertainty that was faced by businesses in forecasting their labour costs, which in many cases was a key factor for competitiveness, the MEA said.

It added that collective bargaining would become more difficult if the quantum of COLA was to become subject to arbitrary alterations.

However, there was no objection to government using focused assistance to target vulnerable groups that might be negatively affected by sudden price fluctuations - mostly caused by global events - which in recent years saw COLA fluctuate between €5.82 (2010) and 58c (2015).