Manufacturers call for pre-determined formula to set national minimum wage

Manufacturing News, Source : TheManufacturer.com
Published : 08 Oct 2002 10:00

The Engineering Employers Federation (EEF) has re-iterated to the Low Pay Commission its previous calls for a pre-determined formula to be used to set the next and, any subsequent, increase in the national minimum wage.

Adopting this approach, the EEF believes, would enable companies to have greater certainty about the level of future increases in the minimum wage and avoid them being made for politically motivated reasons. The federation also criticised the excessive demands currently being made by the TUC which would lead to an adverse direct impact on manufacturing.

But, the EEF said it was essential the formula should be based on a retrospective analysis of the movement of basic pay rates across the economy and not average earnings, which include bonuses and overtime.

The EEF has also expressed no objection to reducing the age at which the minimum wage adult rate is paid from 22 to 21 and the removal of the exclusion for employees aged 16 or 17 providing that their rate is set at a significantly lower level than the minimum wage "youth/development" rate.

EEF Deputy Director of Employment Policy, David Yeandle, said: "The national minimum wage has to date had only a relatively minor direct impact on manufacturing and it is important that this position is maintained to avoid adversely affecting industry's competitiveness. Linking all future increases to the pre-determined formula that we are suggesting will meet this objective and enable employers to plan for the future with greater confidence."

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