Thursday, June 26, 2008

Kesan Kenaikan Harga Minyak ke Atas Motivasi Pekerja (XVII)

Pay Workers More During Hard Times

By Kay Arr , Penang
A reader's opinion in The Star Online, 24 June, 2008

THE report 'Spiralling out of reach' (Sunday Star, June 22) captures the realities of the impact of inflation and prices of consumer goods in relation to the true purchasing power of the wage earners.

We, with the rest of the world, are experiencing one of the unusual instances of price hikes and inflation.

This has definitely affected and encroached into the basic needs of workers, especially those in the lower income, as wages are unable to match the cost of living.

While the Government may be doing its best to ease the burden of the people by price controls, rebates and so on, it should also look at alternatives for workers to be granted corresponding wage increases, especially when some companies may have the financial capacity to do so.

The Government may have to review the restrictions in the labour laws, to allow for a more flexible adjustment of wages based on the financial capacity of individual industries and taking into account unusual inflationary pressures.

As it is, wages are fixed through employment contracts, union-negotiated agreements and Industrial Court awards.

Union agreements and industrial courts awards - instruments that determine wages and conditions of employment of unionised workers - are constrained by law to a minimum duration of three years.

There is no provision to revise wages and other terms in cases of sudden inflation or other circumstances that may affect the workers income, while the agreement or award is in force.

This would mean that the workers cannot go to court and argue for a justified salary revision even when an employer is in a comfortable position to pay, while the worker is affected by unusual circumstances.

Ironically, if a company is not doing well or has been affected by unusual circumstances it could reduce or even disregard certain benefits and seek justification in court.

The Government should give serious thought to correct this peculiar imbalance in the law, while also consider the practices on wage revisions in other parts of the world.

In some countries, pay revisions are permitted at a shorter frequency either by law or through the mechanism of "escalator clauses" in collective agreements, which enable wages to be periodically adjusted more closely with inflationary patterns, while taking into account the affordability of the employer.

As such provisions are absent in our laws, the workers and their unions are forced to live out the duration of the agreements despite increasing costs and unusual circumstances.

Over time, pay becomes artificially depressed and fails to correspond with actual purchasing power.

Should there be an opportunity to review wages during difficult times and at shorter intervals, it could mitigate strenuous circumstances and keep wages more in consonance with real purchasing power.


Italy has a very interesting remuneration scheme for factory workers who are affected by the temporary closure of factories due to slow demand.

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