Confirmed: Minimum wage up 14.5%, COLA 10%

The National Tripartite Committee (NTC) has increased the National Daily Minimum Wage (NDMW) by 14.5 per cent.

With this development, the minimum wage is now GHc6, instead of GHc5.24.

The Public Services Joint Standing Negotiating Committee (PSJSNC) has also agreed to a 10 per cent cost of living allowance (COLA) for public sector workers.

The 10 per cent COLA will be based on the 2013 basic salaries of public sectors workers.

Both increases are to take effect from May 1, 2014.

  Minimum wage
According to a communique dated May 2, 2014 and issued yesterday after the end of negotiations, the NTC had agreed that the new minimum wage be tax exempt,

“Any establishment, institution or organisation whose daily minimum wage is below the new national daily minimum wage should adjust its wages upward accordingly.

“The NTC reiterates its commitment to the improvement of incomes and productivity in both the public and the private sectors,” it said.

  Signing ceremony
At a ceremony yesterday at which parties to the agreement appended their signatures to the communique, the Minister of Employment and Labour Relations, Nii Armah Ashietey, said negotiations for the minimum wage started in October last year and had been difficult and protracted due to the government’s changing financial situation.

“In determining the national daily minimum wage, we took into account inflation, our GDP growth and the ability to pay. It was very critical,” he said. 

He said with the new wage determined, it would be wrong for any employer to pay below the newly agreed figure.

“For those who would want to take Ghanaians for granted, this time we will not allow it. We want to ensure that everybody complies. You don’t have to pay less than what we have agreed,” he said.

Nii Ashietey, who initialled the communique on behalf of the government, expressed gratitude to other members of the NTC for “the sacrifices, patience and tolerance” they exhibited during the negotiations.

The Secretary General of the TUC, Mr Kofi Asamoah, said the minimum wage “does not directly respond to the real cost of living”.

He said since the beginning of the year, there had been various increases in taxes, levies, utility tariffs and fuel prices which had eroded the value of incomes.

The new minimum wage, he said, was a benchmark or safety net in line with international conventions which required that a minimum wage be established.

“What is actually the wage is what is negotiated at the workplaces between employers and employees. What we have done is to set the benchmark which should be the guiding pole for the determination of workers’ wages in the country,” he said.

He said the TUC would have wished to have more but in setting the wage, “what we concluded on is the outcome of the negotiations”.

He reminded the government of its responsibility to ensure that “all variables that lead to the determination of the cost of living stabilise, so that the real meaning and effect of the wage we have set now will be realised by workers”.

The President of the Ghana Employers Association, Mr Terrence Darko, described the minimum wage as a statutory minimum which guided and protected the vulnerable in society.

He said the parties had reached “a very good balance” this year which established the protection level.

While attention was focused on the minimum wage, he said, the issue of productivity also needed to be brought to the fore.

“You cannot have wages without productivity,” he said, adding that there was the need to, in the course of the year, develop a methodology to determine productivity.

“When we do that, it will be a lot easier in future negotiations to discuss any increases in the national minimum wage,” he added.

Mr Darko, the representative of employers on the NTC, expressed the hope that the goodwill and co-operation among the parties which had been engendered during the negotiations would continue.

The Minister of Finance, Mr Seth Terkper, said the minimum wage was very important to the government, labour and employers and the economy as a whole.

“It portrays that as a country, Ghana is sensitive to the needs of the vulnerable in society and cushioned the vulnerable,” he said. 

  10 per cent COLA
With regard to the 10 per cent COLA, a statement jointly signed by Mr George Smith-Graham, the Chief Executive of the Fair Wages and Salaries Commission, and Mr Asamoah said it would be paid in lieu of an increase in the base pay on the Single Spine Salary Structure (SSSS).

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