Mauritius: MSPA to be hit by 24.9% wage hike for sugar workers over 2014-17
According to the MSPA communiqué released on October 06, 2014, considering the current proposal of the MSPA and the Additional Remuneration Act, the MSPA faces a huge impact on its member firms’ finances. (Image: Brankopopovic)
The Mauritius Sugar Producers Association (MSPA) is dreading a total wage increase of 24.9% for sugar workers, both agricultural and non-agricultural employees, basis the current status of negotiations with the labour unions, despite the reduction in sugar prices to Rs 12,500 per tonne.
According to the MSPA communiqué released on October 06, 2014, considering the current proposal of the MSPA and the Additional Remuneration Act, the MSPA faces a huge impact on its member firms’ finances.
In fact, over the period 2010 to 2017, the payroll shouldered by the members of the MSPA will shoot up by a whopping 90%.
The association of sugar industry planters in Mauritius considers that, if the current proposal made by the MSPA to the labour unions, which is actually a wage increase of 8.5% over a period of 4 years, is implemented, in addition to the ‘Additional Remuneration Act’, which is expected to see approximately the same percentage increase of 16.4%, in line with previous years; then, over a four-year period, the MSPA wage bill will soar to Rs 1.7 billion in 2017.
Reviewing the current negotiations to set wages from 2014 to 2017, despite the price reduction of sugar to Rs 12,500 per tonne, the MSPA members have proposed a package including a wage increase of 8.5% spread over 4 years, that is 4% in 2014, and 1.5% annually between 2015 to 2017.
Furthermore, since Thursday, October 02, 2014, the government has launched the tripartite discussions during which wage increases within the framework of ‘Additional Remuneration Act’ will be negotiated.
Hence, the percentage negotiated by the government will be added to the one approved by the labor unions and the MSPA members.
It would be surprising that a sector of the economy can support such an increase, unless the efficiency and the productivity improves by as much and the domestic and global economic environment improves enough to accomodate such an increase in efficiency.
Already, it may be noted that in 2010 the total wage bill shouldered by the members of the MSPA amounted to approximately Rs 900 million and by 2013, these costs had escalated by over 40% to reach Rs 1.3 billion.
In addition, it is important to note that the employees on the payroll of all the members of the MSPA taken together had received, between 2010 and 2013, a total of 36.4% of wage increase.
Accordingly, the MSPA has drawn attention to the fact that the total compensation package of employees in this sector consists of two distinct parts: the base salary and then various indemnities and bonuses. The latter represents approximately 52% of the total compensation package of the employee.
For example, a non-agricultural sugar worker drawing a basic salary of Rs 11,181 will receive the indemnity and bonus of about Rs 12,319, representing a monthly income of Rs 23,500. When these items are combined, this package is, according to the Central Statistics Office, higher than that obtained by employees of several other sectors of the Mauritian economy.
Moreover, the MSPA also presented the case that the base salary, which was negotiated in the last collective bargaining, is about 30% higher than the level recommended by the authorities through their remuneration order.