Government’s Team Disclosed Position On COLA For 2023
CoLA, which stands for the Cost of Living Allowance, in Ghana, has seen a lot of discussion. The discussion of the COLA for 2023 is a result of the inability of both the government and labour unions to agree on base pay negotiations. The term COLA was first adopted in the year 2014 to cushion public sector workers. The decision at the time was the inability of the government to increase the base pay of public sector workers.
In the year 2014 episode of the COLA implementation, the decision was primarily to avoid paying social security on basic salary. Paying the rate of salary increase through COLA provides the employer the opportunity to avoid increasing the basic salary of workers but rather effect the salary increase as an allowance. And since allowances do not attract pension payments, governments are able to dodge such extra responsibility for pension payments.
In the present situation of the cost of living allowance payment, it is largely because of the high cost of living arising out of inflation, especially when an agreed salary increase for the year 2022 was made a year earlier.
It was widely expected that the recent cost of living allowance being paid would end by December 2022. But that would not be the case as disclosed by the deputy minister of employment and labour relations during Citi Eyewitness news. A meeting that was called to conclude the 2023 base pay negotiations ended up being postponed with limited information given out by both labour unions and the government’s team.
In a press briefing by the government’s team after the closed-door negotiations, the minister disclosed the following about COLA for 2023 in answer to questions posed by journalists.
The deputy minister was queried about the fate of the cost of living allowance that was expected to end in December while the negotiations about the 2023 base pay are yet to be concluded. In a response, he said COLA will continue.
When pressed further, “but COLA was expected to end in December”, he said: COLA was introduced for a purpose and we are not in normal times and since we have not concluded negotiations, it must continue.
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