In the 2006 Budget Speech presented at the National Assembly, there is clear indication of the political will to create a New Mauritius based on a new economic cycle. One needs to fully respect this commitment of Government to democratize the economy and to create and distribute wealth equitably to the Mauritian citizens. However, there are a lot of questions which are raised and need to be addressed before the population can see and experience the benefits of this New Mauritius.

The tripartite system is an inheritance which was left by the British and one would observe that in all ancient British Colonies including Australia and New Zealand. The context of this tripartite system is based on high level of regulation and state intervention in pay determination. In most cases Government through the tripartite system was perceived as a wage trendsetter. At that time, organizations were hierarchically structured with an autocratic style of management and a centralized decision-making system. This system was considered as adequate although at each tripartite meeting there was always a sense of uneasiness and its appropriateness has been questioned. We all remember the times when the unions have walked out of the negotiations or the time when there was disputes over inflation rates.

However, the evolution of time and changes in the environment have made that most countries have had to think of alternatives to the tripartite system. The main reason given for a change has been the inflexibility of the system. Due to global competition and the need to gain a competitive advantage to survive in the markets, most organizations have had to restructure themselves and decentralize decision-making as well as rationalize resources. This has meant that pay determination has also had to be decentra-lized so as to meet the upcoming challenges. The pay determination mechanisms have to encourage competitiveness and productivity. Organisations have to pay employees for the work that is done rather than for their presence or length of service.

Mauritius is no exception. The need for rationalization of resources and the urge for competitiveness require flexibility and adaptability in pay determination mechanism. The textile industry has suffered greatly due to the rigidity in pay and this may be a reason why we have such high rates of unemployment especially sectoral unemployment. It is in this new context that the Government has decided to dismantle the existing tripartite system and to propose the National Wages Council as an alternative.

Is Mauritius ready for such a change?

There has been diverse reaction to this decision of Government, the private sector has welcomed this decentralization of pay determination as it provides it with some flexibility and it takes into consideration the affordability of companies. On the other hand, unions are strongly against this new system as they believe it will lead to less collective action and undermine their role as representatives of employees. From a wider perspective, the question being raised is whether Mauritius is prepared for the new National Wages Council. The debate for the abolition of the tripartite system and the emergence of the National Wages Council would be unrealistic if it is not adapted to the Mauritian context. One cannot turn a blind eye to the realities of our country. Is Mauritius ready for such a change?

From the point of view of Government and the private sector, the tripartite system is being classified as too rigid. This is a fact but what do the Mauritian employees know of the National Wages Council? What are the foundations of the National Wages Council? It is said that pay determination will be sectoral, does it mean that different sectors requiring same types of skills will have different pay levels? If this is the case there will be sectoral pay inequality and occupational segregation. At the same time it will be creating an artificial labour market whereby our human resources will not offer their services to certain sectors whereas in other sectors there will be a surplus of labour supply. Thus creating instability and disequilibrium in the labour market. The role of Government is to manage the disequilibrium rather than create inequality. This may lead to other types of problems including economic and social problems. In this case, the rigidity of the tripartite system would seem more attractive to employees as well as to Government than this new system of National Wages Council.

The other question which needs to be addressed is the flexibility of the Mauritian organizations. Are our structures flexible? The reality shows that there still exists a lot of centralization in decision-making and the organization structures are hierarchical with autocratic management styles. The process of democratization of the economy has just started. Flexibility as perceived by the employees at the moment tends to equate with hiring and firing. Are we looking for a system of pay determination which provides a leeway for these ?flexible? work practices thus leading to job insecurity and uncertainty? This would only lead to an unproductive workforce as employees would always be seeking ?another? job or expecting to be sacked.

The other question that Government should address is the expectations of employees. As a nation, Mauritians have been used to a way of work which is based on certain well established practices. They know that every year they will get an increase in pay whether it be 5% or Rs 135. A change is bound to cause some uncertainty and Government has to manage this resistance to change by providing appropriate and adequate information to all stakeholders.The employees have to perceive this new National Wages Council as an opportunity to increase their earnings rather than a threat. The perception at the moment is that through the National Wages Council, pay levels will be lower and employees will not be compensated for changes in cost of living has to be managed. Unless employees are taken on board in its implementation, the National Wages Council may be doomed to failure. The National Wages Council, in principle, is a means to equitably share the cake and through this mechanism, the size of the cake is being increased by the effort of each and every employee. An example would be Singapore where the average pay raised significantly with the advent of the National Wages Council.

One of the objectives of the National Wages Council is to create more efficient and productive workplaces. Are we going about it in the right way? The employees are being asked to create a larger surplus value but they are being treated as surplus fat in an organization. This contradiction may be detrimental to the setting up and functioning of the National Wages Council. The Mauritius Revenue Authority (MRA) is an illustration of the modern organization of New Mauritius. What do we see happening there? Somehow maybe due to lack of communication and adequate planning, there has been a lot of discontent and employees are facing a number of uncertainties. A number of employees have been demoted, others have not been offered a contract and yet others are complaining about there being too many un-knowns that is how their new work is being organized. The inexistence of a proper change mechanism with a change agent has caused the MRA to have a false start at least with respect to its employees. One should learn from this experience and therefore not dismantle a system which is functioning before creating and testing the new system. There is a need to plan for changes. The planning would include consultation but also creating the appropriate environment for the functioning of the National Wages Council.

Before dismantling the tripartite system and introducing the National Wages Council a lot of ground work needs to be done. The National Wages Council will need to be introduced as part of a major restructuring of the economy with new legislations to regulate work and also clear and precise guidelines on work practices to organizations. These work practices will include clauses relating to the minimum benefits to be given to employees as a compensation for increase in cost of leaving. In this way, the worker will have confidence in the system and be willing to work to his own expectations and to that of the employers.

The tripartite system is an old-fashioned wage determination mechanism but to change it overnight into a new trendy system may cause distress and demotivation rather than progress and evolution.

Dr Priya BAGUANT