THE Malaysian Trades Union Congress wants employers to give private sector workers at least RM300 as a monthly cost of living allowance (Cola) to cope with the recent price hikes (”Workers could do with extra RM300″ — NST, Oct 4).

But Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan said “it was not the practice in the private sector to give Cola as wage increases would take the cost of living into account. We normally look at the consumer price index when we renegotiate collective agreements”.

“We look at the consumer price index (CPI) over the past three years and usually give an increment amounting to two-thirds of the figure.”

The principle that wages during a collective agreement are increased by two-thirds of the aggregate increase of the CPI in the preceding three years is a principle enunciated by the Industrial Court about 28 years ago and has outlived its purpose.

Consider, for instance, that between June and August this year, the country saw the sharpest increase in the CPI.

Employees have to endure a lower standard of living because the reduced purchasing power cannot be addressed until after the expiry of their collective agreements.

The MEF should not be blinkered to the realities of the day and stick stubbornly to solutions of the 20th century for the problems of the 21st century.

To stick to the legalities of collective agreements and not acknowledge price hikes for essential items and fuel increases is being insensitive to the needs of employees.

Hardship experienced by employees cannot help nurture a motivated and committed workforce.

This in turn will lead to real loss of productivity in a number of ways.

If unions are experiencing difficulty in convincing employers to grant cost-of-living allowances — just imagine the plight of non-unionised workers, who comprise 90 per cent of private sector employees.

In this group, there are employees who have not seen any wage increase since 2000.

Human Resources Minister Datuk Dr S. Subramaniam is purported to have stated he sympathised with the workers.

“However, the ministry could not legally force employers to increase wages.

“On a non-enforceable basis, we bring up the issue of living costs to employers.”

The time is right for the ministry to set up a national wages council for all sectors of the industry and determine wage increases biannually or annually as the situation demands.

The time is right to alleviate the hardship faced by employees.

Employees should not be allowed to suffer any longer.

Since Dr Subramaniam is empowered by law to establish wage councils, why the reluctance?

On the other hand, unions should be smart enough when negotiating collective agreements to incorporate a provision for the annual review of salaries to take care of unforeseen situations which lead to price hikes and, consequently, increased living costs.

A.C.Klang

Source: NST – October 12, 2008