Unions Demand Pay Hike of Up to Rs 1,000 as Employers Urge Caution

Mauritian trade unions and employers are locked in a fierce dispute over the quantum of the 2026 cost-of-living allowance , with worker representatives demanding a payment of up to Rs 1,000 to counter soaring inflation, while business owners are pleading for moderation to safeguard jobs and economic stability.

The clash comes as the government prepares for tripartite consultations to set the final compensation amount for the coming year, following the submission of the official wage dossier to the Council of Ministers.

Worker Demands: Fighting ‘Erosion’ of Purchasing Power

Union leaders are united on the urgent need to boost workers’ purchasing power but differ on the exact figure.

• Rs 1,000 Minimum: Haniff Peerun, President of the Mauritius Labour Congress, insists the compensation must be no less than Rs 1,000.
• He argued that the financial pressure on workers is “far beyond” what official figures suggest, claiming the methodology used to calculate the inflation rate is flawed and does not reflect the real cost of living in supermarkets. Peerun also calls for the compensation to be extended to pensioners.
• Rs 855 Based on Minimum Wage: The Confédération des Travailleurs des Secteurs Public et Privé (CTSP), via spokesperson Jane Ragoo, proposed a figure of Rs 855, calculated as an adjustment based on the new national minimum wage.
• Ragoo stressed that this amount must not be deducted from or offset against the CSG allocation or any other social benefit, warning that any attempt to do so would perpetuate a “systemic discrimination” that has already led to a cumulative loss of Rs 1,555 in low-income workers’ purchasing power since January 2024.
• “Must Exceed Rs 1,000”: Ashvin Gudday, a negotiator for the General Workers Federation (GWF), went further, stating the compensation must exceed Rs 1,000.
• He cited the rising cost of foodstuffs and medicines, the impact of the phased removal of the CSG allowance, and the failure of a recent Rs 2 billion economic injection to have the intended effect.
• Gudday also highlighted the increased strain on families ahead of the new school year, especially as there will be no 14th-month payment this year.

Another CTSP spokesperson, Reeaz Chuttoo, warned that extreme climatic conditions will likely cause further price rises in fresh produce, contributing to “high inflation” in 2026 and potentially creating social tension if significant action is not taken.

Gudday also called for a complete overhaul of national economic policy, advocating for a stable rupee, reduced import reliance (currently 75%), and stronger local production to ensure food sovereignty.

Employer Concerns: Viability and Moderation

Employers, while acknowledging inflation’s impact on staff, are urging a cautious approach, warning that an excessive increase could destabilise businesses, especially Small and Medium-sized Enterprises (SMEs).

• Need for Transparency: Pradeep Dursun, COO of Business Mauritius, reiterated the organisation’s consistent position that the compensation must be determined by a “transparent formula” founded on objective data.
• He emphasised the need for a robust and equitable framework that protects workers’ purchasing power while ensuring the “economic viability of businesses,” particularly SMEs. His position will be guided by inflation, productivity trends, and sectoral performance.
• SME Survival Risk: Ajay Beedassy, President of the SME Chambers, stated that the proposals from unions (Rs 855 to Rs 1,000) are untenable and could “jeopardise the survival of SMEs” in the textile sector.
• He argued that textile SMEs are not currently profitable and cannot sustain extra financial pressure without government assistance. He called for the compensation to be kept at the “lowest possible level.”
• Rs 600 to Rs 800 Suggestion: Nitish Rama, Director of the textile company V Formula, proposed a more sustainable range of Rs 600 to Rs 800.
• He cautioned that an increase that is too high risks reducing margins, limiting investments, slowing job creation, and leading to business closures.
• Rama stressed that companies need a stable financial environment to invest in technology and automation, which is crucial for long-term competitiveness.
• Rs 500 Suggested as ‘Appropriate’: Suren Surat, CEO of SKC Surat, suggested a figure of approximately Rs 500 would be appropriate, stating that Rs 855 to Rs 1,000 would significantly impact his company’s payroll (estimating an extra Rs 6 million annually for 400 employees). He urged a compromise, suggesting both sides “cut the pear in two.”
• Focus on Productivity: Industrialist François de Grivel urged caution, noting that previous years have already seen significant, difficult-to-bear wage increases, such as the 14th-month payment in 2024. He argued that any wage increase must be “adjusted to the increase in productivity.”

Historical Context

The current debate recalls past criticisms, with former Finance Minister Renganaden Padayachy having previously highlighted the inadequacy of the wage compensations granted under the previous Ramgoolam government (2006-2014), where increases like Rs 170 (2006) and Rs 135 (2007) failed to keep pace with a cumulative inflation rate exceeding 62% over the period. Conversely, he defended the 2024 compensation of between Rs 1,500 and Rs 2,000 under the Pravind Jugnauth regime.

Source: Defi Media