Lebanon Businessnews News

Labor unions reject wage proposal
Economic bodies approve 20 percent salary increase for minimum wages
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The General Confederation of Labor Unions (GCLU), the private sector’s economic bodies, and the high school teachers’ association have submitted their responses to the wage increase proposal presented by the Minister of Labor Charbel Nahas.
The package Nahas had proposed during the meeting of the Price Index Committee (November 11) suggested:
-Applying a 16.3 percent increase to all salaries (according to the inflation rate since 2008, as determined by the Central Administration of Statistics)
-Increasing the transportation allowances to LL10, 000 (currently LL8, 000 per working day) and integrating the transportation allowances in the basic salaries.
-Providing health care coverage for all Lebanese residents through replacing the subscriptions to the Sickness and Maternity Fund (of the National Social Security Fund) with taxes on real estate transactions and interest profits.

The private sector economic bodies responded with the following:
-Raising the minimum wage from LL500 000 to LL600 000 (20 percent increase).
-Applying the inflation rate of 16.3 percent to wages below LL1 million. Applying an increase between LL100 000 and LL163 000 to all other salaries.
-Rejecting the inclusion of transportation fees in the basic salary.
-Keeping the transportation allowances at its current rate LL8 000/day
-Keeping the ceiling for education fees at LL1 million per family.

The President of the Beirut Traders Association, Nicolas Chammas, said that the Minister of Labor had initially suggested adding nine percent to the 16 percent inflation rate. He said that the minister proposed paying the present amount of the NSSF medical subscription (nine percent) directly to the employees, while funding the NSSF through other sources (real estate transactions taxes). Employers pay seven percent of the salary of each employee as a subscription to the NSSF – Maternity and sickness fund, while the employee pays two percent.

“The minister was seeking other sources to fund the wage upgrade and thus he acknowledged that the private sector bodies are incapable of increasing wages by more than 16 percent,” he said.

Chammas also said that the economic bodies support the concept of a universal health coverage plan that would include all Lebanese residents. However, he said that such a scheme is impractical at the moment and requires a comprehensive reform process in the NSSF institution.

The GCLU responded with the following:
-Increasing the salaries of all workers (based on law 36/67) through amending the Cabinet decree (October) in line with the Shura council’s recommendations.
-Issuing a separate decree for raising transportation allowances to LL10 000 per actual working day
-Raising the education allowances to LL750 000 per student (from LL500 000) and a maximum of LL1.5 million for each family
-Including the transportation and education allowances in the basic salary
-Rejecting any adjustment to the NSSF subscriptions.

The associations of high school teachers responded with the following:
-Recognizing the year 1996, rather than 2008, as the base year for calculating the price hike rate (rejecting the 16 percent inflation rate)
-Correcting wages through adding percentages to the wage fractions: 60 percent, 40 percent, 20 percent (ascending order) plus a retroactive effect since 1/1/2011.
-Including the transportation allowances in the basic salary.
-Providing health care coverage for all Lebanese residents through taxes on real estate transactions and interest profits, while sustaining the NSSF subscriptions for employees.
The association said that it will ask Nahas to present two separate proposals to the Council of Ministers: The first for the wage increase, which should be adopted without delay, and the second for the universal health coverage plan, which requires much deliberation.

Date Posted: Nov 18, 2011
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