In its Budget proposals the Chamber of Commerce, Enterprise and Industry is proposing that workers who are due some form of pay rise, should not receive the full cost of living allowance (COLA). This proposal is being based on the grounds that workers would have already received some form of compensation and to avoid “a vicious spiral of wage-cost inflation”.

UHM Voice of the Workers disagrees with the position of the Chamber on various counts.  First of all, it is worth pointing out that the COLA mechanism is the result of an agreement which had been reached by all social partners, including employers, on December 10, 1990. Though one might argue that this agreement is due for revision, the bottom line is that in the absence of a genuine attempt to take such step, the 32-year-old agreement is the one which is still in place.

This agreement states clearly that COLA must be paid in full, always, regardless of whether an employee is covered by a collective agreement.

It is also worth noting that this agreement states that every three years, social partners are to be notified with the forecasts on the values of COLA for the coming years. Such clause was intended to avoid any shocks when negotiating collective agreements inclusive of COLA, particularly wage increments as these cover years in advance. For some reason, however, this clause was not adhered to.

This consideration is crucial in those circumstances whereby unions negotiate collective agreement incorporating wage increases that are inclusive of COLA. This approach is taken as it gives a greater degree of stability to employers who will be in a position to plan ahead for their budget. Hence, agreements of this type are not negotiated haphazardly but are based on the average value of COLA for the past decade which normally hovers between €2 to €2.25. This is why having a COLA increase of €10 presents an exceptional circumstance, and this is why UHM disagrees with the Chamber’s position to treat the present scenario as if it was business as usual. It is not! Inflation especially on essential items like food and house maintenance costs is increase by spectacular rates month after month. Nobody knows exactly when this upward trend will calm down, but its effects are having a devastating impact already on our quality of life.

The moment that our mission becomes one which seeks to hinder the COLA mechanism from reaching its objective to mitigate the cost of living, we would be failing to safeguard workers and increase financial burdens for families.  In turn, this would negatively impact the levels of consumption, accelerate the erosion of our spending power and possibly stall the economy if not trigger a recession. This is why UHM will fight tooth and nail to stick with all the provisions of the 1990 agreement and improve it if possible.