‘Stick to $4’
Aprivate sector organisation is worried that if the minimum wage rate increases to $4, it may lead to some small and medium enterprises to shut down. This is after the Government had announced it would review the minimum wage rate of $4.
It had increased to $4 by the previous administration, without the endorsement of the tripartite wages’ council.
Decision on whether to increase and decrease would be made by the tripartite wages’ council. Implementation for the minimum wage to increase to $4 came into effect on effect from January 1, 2023. Legislate an annual minimum wage review was part of the National Federation Party manifesto in the 2022 election.
Fiji Commerce and Employers Federation chief executive officer Kameli Batiweti said some of the small and medium enterprises would be able to afford to pay its employees if it increases.
Small and medium enterprises shutting down would cause more people to be jobless, he said. Mr Batiweti said 62 per cent of the people were employed by the small and medium enterprises as according to a study that was conducted by the Reserve Bank of Fiji.
“The minimum wage of $4 is okay. It had increased from $2.68 to $4, and this was for unskilled workers,” he said.
“Increasing to $4 will also lead to some small and medium enterprises making some tough decisions. We are just coming out of the coronavirus pandemic.”
If it had increased there was a need to be a return of investment for the employer, he said.
“From our perspective, one return of investment is the element of productivity. We would like to have skin productivity as the skin in the game, to ensure that every money that is spent there is a return of increase in level of productivity,” he said. “When the productivity increase it would mean that the employers are able to earn a lot more money because of number of resources the output increases.
“When the output is increased, the employers has managed to get some funds to put into research and development. “Also, some funds into investing capital expenditure and to invest into its employees into wage rate increases,” he said.
He said if productivity was not in play the ability to invest in these areas would be restricted.
“Some thinks that productivity is work hand and long but it’s more than that. It’s about working smart,” he said.
There was also a need to review the Employment Relations Act of 2007, he said.
“The Employment Relation Act was reviewed in 2015 but was not tabled and passed in Parliament,” he said.
“Now all tripartite approves all amendments then it goes Cabinet. “Under the International Labour Organisation Convention there needs to be a review in the law to ensure it’s up to standards,” he said. Mr Batiweti said when the Act was reviewed in 2007, digital and climate
Increasing to $4 will also lead to some small and medium enterprises making some tough decisions. We are just coming out of the coronavirus pandemic. Kameli Batiweti CHIEF EXECUTIVE OFfiCER, Fiji Commerce and Employers Federation