Malta's trade union groups in a rare joint statement have called for a meeting with the government to present a proposal for a new mechanism for the calculation of the COLA cost of living adjustment.

The Forum Unions Maltin, General Workers Union, Confederation of Malta Trade Unions and the UĦM Voice of the Workers said they had taken the initiative in view of the current unprecedented situation which would see the COLA rise to €10 in the forthcoming Budget.

They said the COLA mechanism needed to be fair to workers and employers and changes were also needed to address anomalies that could cause problems in the future.

The proposals, which the unions did not detail, would also safeguard the sustainability of jobs, the statement said.

Employers' concerns

Employers have recently warned that a COLA increase of €10 per week could drive them out of business.

The Employers' Association said cost-of-living adjustments should be capped at €6 weekly from 2024 and for the subsequent five years, warning that more than half of companies will be impacted by this year’s expected increase.  

It suggested that a five-year maximum and minimum COLA adjustment should be set. This should come into force in 2024 and be a minimum of €2.50 weekly and a maximum of no more than €6 every week.

The COLA, awarded to all employees, is worked out on a formula that considers the prices of a basket of items and services, many of which have spiraled this year.

Over the past 10 years, with inflation fairly stable, COLA hardly ever exceeded €4. This year and in 2020, the adjustment was €1.75. Since the mechanism was agreed upon in the 1990s, it has gone beyond the €5 mark on just three occasions.

Finance Minister Clyde Caruana has previously said the cost of living adjustment must be paid in full to all employees.