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Malta: EIRO CAR on the Changing Business Landscape in the Electricity sector and Industrial Relations in Europe

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The electricity sector in Malta is monopolised by the national corporation Enemalta. The small size of the Maltese islands hinders the market liberalisation of this sector, although government is considering aiding private companies in taking up projects associated with electricity generation from RES. Collective bargaining is conducted at company level between Enemalta and two trade unions representing the employees in the sector. However involvement of social partners in the national energy policy has so far been limited or nonexistent. Since 2008 the industrial relations were dominated by the significant increases in electricity tariffs, to the dissatisfaction of trade unions and employers’ associations.

1. General background information on the energy policy in your country and employment trends

1.1. Please explain briefly the main governmental strategies/action in relation to the electricity production and energy source mix. In your answer, please include information on the following aspects, where possible:

  • Is there an outspoken policy or plan in your country for any kind of change towards an increase or decrease of electricity production with any of the different sources (coal, oil, gas, hydro, eolic, sun, etc.)?
  • Which is the targeted energy mix for the future (see material provided)? How, in which subsequent steps, such targets are expected to be met?
  • Are investments in networks (new connections, upgrade) envisaged? To what extent? With which specific goals?
  • What is the Government stance and what are the ongoing/envisaged action towards generation of electricity from the different broad groups of sources: nuclear /fossile /renewable energy?
  • What are the recent employment trends in the different subsectors of power generation according to the different broad groups of sources: nuclear/fossile/renewable energy? Please indicate development since 2005 with reference to generation, distribution, and sale separately.

In April 2009 the Maltese government through the Ministry for Resources and Human Affairs published its ‘Proposal for an Energy Policy for Malta’. Among the key policy areas, government identified the need to reduce Malta’s reliance on imported fuels, providing a more steady supply, stable an efficient and effective delivery of energy and provide policy support to the energy sector. Malta’s target is to produce 10% of its energy from renewable sources by 2020, which in 2008 totalled 0.2%.

Currently all the electrical energy generation and distribution in Malta is solely entrusted to the national corporation Enemalta, which in 2009 generated a total 2,167,400 MWH (2167.4 GWH). It is supplied by two power stations with a combined capacity of 571MW: Marsa power station which currently provides about 45% of the total electricity generating capacity on the Maltese islands is expected to be shut down by 2013 in terms of the large combustion plant directive. It has an operating efficiency of 27% and is mostly run on Heavy Fuel Oil (HFO). Delimara power station uses a mixture of HFO (32%) and Gas CCGT (40%) while open cycle gas turbines cover peak demand or emergencies. Works are currently ongoing on a new generation plant at Delimara which can be operated by HFO and diesel and shall be 46.7 efficient. The new plant that is expected to be operative in 2012 can be converted to be able to run on natural gas for which government is planning to establish the infrastructure.

Works should be starting shortly in the installation of an underwater interconnector cable between Malta and Sicily in order to access the EU internal electricity market and should be completed by 2013. It will have a rated capacity of 200 MW and will enable Malta to buy electrical energy generated by Nuclear and RES plants abroad.

Research work is ongoing for the creation of a 200 gigawatt per hour generating offshore wind farm set to be implemented by 2016. The estimated €300 million project is expected to be undertaken and run by a private contractor.

Government’s policy also includes the generation of electrical energy from waste products. Works are ongoing on the Sant’Antnin Waste Treatment Plant upgrade that is to incorporate a Combined Heat and Power Plant (CHP), which is expected to run on the biogas produced by the plant and generate electrical power for 1,400 households of 4 persons each.

Subsidy and grants schemes were constantly launched and improved since 2006 for the installation of solar water heaters, PV panels and micro-wind turbines in domestic households. PV systems are connected to the national grid through a net metering system and qualify for a feed in tariff. Five new distribution centres with a total capacity of 264 KV will be constructed around the island in order to enhance the high voltage distribution network.

Number of employees

Year

Total number of employees in Enemalta

Number of employees in the Electricity division

Number of employees in the generation section

Number of employees in the distribution section

2005      
2006      
2007
2008      
2009      
2010

1.2. Government policy for increase of the share of renewable resources according to the RES directive

  • Are any subsidies being granted for different types of RES for electricity providers? If yes, please provide briefly the details
  • Have subsidies for RES been cut recently? Was this a result of the crisis, of budget constraints, or the result of a policy revision (following a policy assessment, due to a disproportionate use of subsidies, etc.)? Please provide brief details.
  • Are there any other forms of support foreseen for promoting electricity generation of RES?
  • Please include any other aspects you consider to be worth mentioning regarding the state of play and the future prospects of RES in your country.

Malta’s target is to produce 10% of its energy from renewable sources by 2020. However, there were no subsidies directed for the set up of commercial scale of RES generation plants. On the other hand as discussed in 1.1, government through the Malta Resources Authority (MRA) handed out a series of subsidies aimed for the installation of solar water heaters, wind energy systems and PV panels in domestic and commercial premises. Budget allocation for these initiatives was more or less constant in the last 2 years. The Malta Enterprise (ME) through the ERDF funds 2007-2013 allocated €15 million in grants for local businesses to invest in alternative energy for their own use.

The Proposal for an energy policy for Malta document, among others mentions the need to make appropriate RES projects in Malta attractive for investment, while considering the provision of a share in PV solar parks investment in public areas, to investors who do not have access to their own solar potential.

1.3. Are there any studies and documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector? This could include, for instance,

  • Employment effects resulting from the unbundling of activities (production from distribution)
  • Employment effects (on quantity and quality of work) resulting from the possible shifts within the electricity production sector from traditional sources to RES
  • Employment effects from investments in infrastructure (renewal of grids, introduction of smart meter technology, district heating)
  • The need for retraining of workers or provision of new qualifications linked to the sector transformations
  • Possible spatial mobility of workers as a result of more decentralised production (linked both to new activities and to restructuring of existing ones)
  • Please include any other aspects you consider to be worth mentioning regarding prospective impacts on employment and industrial relations

Studies produced so far do not include an assessment on the impact on the related employment. This could be due to the fact that the main production and distribution of electricity is expected to remain under the responsibility of Enemalta.

1.4 To what extent are the social partners involved or consulted concerning the governmental energy policy, notably in relation to employment impacts? Has this happened on an ad-hoc basis or on a structural, permanent basis? Is there a special tripartite social dialogue body for such consultations? Did consultation take place at national level, at sector level, or at the initiative of individual companies? Please briefly provide details.

There has been little or no involvement by social partners towards this end. For instance during a conference named ‘Investing in climate solutions’ held at the General Workers’ Union (GWU) headquarters in Valletta in January 2010, the minister responsible for energy, criticized the GWU president after his speech on green jobs, for the lack of proposals regarding alternative energy issues. This lack of consultation was confirmed by the secretary of the chemicals and energy section (GWU) who said that currently the union is only discussing the movement of employees between the Marsa and Delimara power stations. However, the GWU made a number of pre-2010 budget proposals such as enhanced fiscal incentives for those opting to invest in renewable energy sourcing both in the domestic and commercial sector. Similar proposals were also made by the Union of United Workers (UHM, Union Haddiema Maghqudin). In 2008 the Enemalta Professional Officers Union (EPOU) formed a sub-committee to study climate change which presented its views to the Ministry for Resources and Rural Affairs (MRRA) on the national strategy on climate change consultation document tackling various issues including RES and the underwater interconnector cable. The General Retailers and Traders Union (GRTU) formed a renewable energy section which among others deals with the MRA in discussing issues such as the introduction of the solar water heaters and Photovoltaic Rebate Scheme (PRS). The Malta-EU Steering and Action Committee (MEUSAC) organises discussion fora related to the EU action plan on energy also attended by members of social partners

The lack of a specialised tripartite structural body was reflected with the publication of the document proposal – an energy pact for Malta in January 2010 by the Malta Employers’ Association (MEA). Among others it mentions the ‘thorny issue’ of energy price hikes that social partners have to tackle every year at the Malta Council for Economic and Social Development (MCESD) meetings. The MEA (2010: 2) criticises the fact that in these meetings it is “being drawn into fruitless debates about the computations of the tariffs, purchasing of oil and other technical matters that are not within its remit to discuss.” The MEA proposed the formation of a tripartite committee composed of six technical experts with Government, Unions and Employer organisations each nominating two experts in order to draw up an Energy Pact for the years 2011 – 2015. The committee should also seek the involvement of the MRA. The scope of the pact is to provide a model of how energy prices will be determined while considering six factors which are: The price of oil, the level of consumption, inefficiencies at Enemalta, the link to the European grid, alternative energy and benchmarking of rates with those of major competitors. To date there has been no indication about the set up of this committee.

2. Composition, structure and employment trends for the different resources used for electricity production

2.1 Please give an overview of the current sectoral composition of electricity production in your country, by giving for each of these seven groups of energy sources, the NAME of the three largest producing, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

For all companies listed, as a summary, please indicate:

  1. Total production and its distribution across different energy sources
  2. Total employment and its distribution across different energy sources
  3. Production plants and their respective energy source(s)
Electricity production

Electricity production with

TOP 3

PRODUCING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

FOSSIL FUELS

Enemalta

663

2007

Public

       
       
NUCLEAR

Nil

     
       
       
HYDRO

Nil

     
       
       
WIND

Nil

     
       
       
BIOMASS

Nil

     
       
       
PHOTO-VOLTAIC

Nil

     
       
       

Enemalta Corporation is a Government entity established by the Enemalta Act 1977 Chapter 272 of the Laws of Malta and incorporated the electricity, petroleum and gas divisions. However in 2008 Government privatised Enemalta’s gas division and is currently planning to privatise the petroleum division as well. In 2010 the Electricity division was composed of 1453 workers.

2.2 Please provide an overview of the current organisation of electricity distribution in your country. Is there a single distributing company/body? Are there multiple companies? At national or territorial level?

Enemalta Corporation is the only organisation entrusted with the production and distribution of electricity in Malta since 1977.

2.3 Please indicate the NAME of the three largest distributing companies, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Distribution companies
 

TOP 3

DISTRIBUTING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

Distribution GRID

Enemalta

351

2007

Public

       
       

2.4. Where there any significant developments/changes since 2008 for a specific company or source of electricity production in numbers of employees or in their public/private status? Was this due to the current economic crisis? Were there any instances of unbundling or mergers? With what consequences in terms of employment and industrial relations?

There were no such significant developments/changes since 2008 regarding Enemalta employees.

3. Industrial relations in the electricity sector: Actors

3.1. Please provide details on the membership in the electricity sector and membership of the top 3 producing and distributing companies in employer’s organisation (see questions 2.1-2.3 above). Please provide information on the name of the trade unions organising in this subsector and the level of their membership, or otherwise provide overall data but please include indications on differences in membership densities across subsectors.

Trade union representation and Membership to employers’ organisation
FOSSIL FUELS

Enemalta

Nil

GWU - Chemicals and energy section has 6422* members. GWU – Enemalta collective agreement 2006-2010 covers 1600 employees.

UHM Tourism and Services section that consists of 3,712* members. The exact figures concerning Enemalta are unavailable however in 2007 UHM had 306** members making up 18.4% of the total workers in Enemalta.

EPOU has 105* members.

Enemalta senior staff union has 23* members

*as declared in the report by the Registrar of Trade Unions 2009/2010.

**source Enemalta Corporation Dossier 2008.

   
   
NUCLEAR

Nil

Nil

Nil

   
   
HYDRO

Nil

Nil

Nil

   
   
WIND

Nil

Nil

Nil

   
   
BIOMASS

Nil

Nil

Nil

   
   
PHOTO-VOLTAIC

Nil

Nil

Nil

   
   
And in the distributing companies

Distribution GRID

companies

Enemalta

Nil

As per electricity production data above.

   
   

3.2 To what extent are employees in the different subsectors (fossil/nuclear/RES) covered by trade union representation? Has there been any impact of the crisis on trade union representation?

The GWU, the largest trade union in Malta, is active at tri-partite level being a member on national boards such as the MCESD, which is an advisory council that gives recommendations to the Maltese government on matters of economic and social relevance. The UHM is also one of the members on this board. On an international level, the GWU is a member of the European Mine, Chemical and Energy Workers' Federation (EMCEF) and the International Federation of Chemical, Energy, Mining and General Workers' Union (ICEM). The EPOU is a member of the FORUM which is a confederation of Maltese Trade Unions made up of 12,000 members. The crisis has not affected the level of trade union representation in Malta.

3.3 Have there been major reorganisations/splits/mergers of trade unions or employers organisations in the sector during the last five years?

There has not been such activity in these last five years.

3.4. Have new actors (trade unions or employers organisations) been founded in recent years, especially in the newly evolving RES industries? Or is the industry covered by established actors?

There were no new trade unions or employers associations founded in recent years. The RES industry in Malta is still in its infancy and it mostly relies on government subsidies to household when purchasing energy generating technology such as solar water heaters and photovoltaic panels. These are bought from various retailers who could be members of the GRTU.

3.5. Have the established sectoral actors (both trade unions and employer organisations) started any initiative to extend their representation to the new emerging parts of the sector? Please describe such initiatives and their results so far.

No such initiatives aimed towards this end were recorded.

4. Role of collective bargaining and social dialogue

4.1 Please provide information on the structure of collective bargaining in the electricity sector. Please, briefly mention the main characteristics of collective bargaining:

  • At what level are collective agreements within the subsectors of the electricity sector (traditional providers, newly emerging providers) concluded (company, sectoral level and/or inter-sectoral level)? Is there a difference between the producers and the distributors?
  • Estimate the coverage rate of collective bargaining in terms of companies and employees: are there any differences in coverage across different subsectors of electricity production?

Collective bargaining in the electricity sector, as with all other sectors in Malta is conducted at company level, which is Enemalta and covers 1453 employees (excluding employees in the petroleum division). However, collective bargaining involving state owned companies such as Enemalta is conducted under the scrutiny of the state through the Public Administration Collective Bargaining Unit (PACBU) within the Ministry of Finance. The PACBU prime function is to ensure that the financial side of collective agreements are in line with the government wage policy.

4.2 Please comment on the most recent collective agreements reached at sector level and at company level. Please address the following topics:

  • Pay and working time: level and trends relative to the national average and significant differences across subsectors of the electricity industry.

The latest collective agreement involving Enemalta cover the period 2006 – 2010.

A collective agreement signed between Enemalta and the chemicals and energy section of the GWU covering around 1600 employees (including petroleum division workers).

A collective agreement signed between Enemalta and the EPOU covering around 64 employees (including petroleum division workers).

The normal hours of work in Malta (excluding overtime) cannot exceed 48 hours per week on a 17 day reference period, and on a 52 week reference period in the manufacturing and tourism sectors. In 2010, the national full-time average hours usually worked per week in Malta were 40.4 hours (source: Eurostat). Both (Enemalta) collective agreements stipulate that all employees/officers work an average 40 hour working week spread over 5 working days. The collective agreements provide for flexi-time that permits an employee/officer to commence duties up to one hour before or after the normal starting time and finish work up to one hour before or after the normal starting time.

Remuneration is based on the public service salary scale which consists of 20 categorised salary scales. Each category (salary scale) includes various grades e.g. Salary scale 15 consists of technician, office dispatcher, service dispatcher, senior messenger, store man, tradesman, and clerk. The collective agreement involving the GWU concerns employees in salary scales 6 to 20. The table below compares the salary scales as per Enemalta collective agreement to that of the public service employees.

Salary Scales

Scale

Enemalta maximum salary 2006 (€)

Public service maximum salary 2006 (€)

Enemalta maximum salary 2010 (€)

Public service maximum salary 2010 (€)

6

20277

19974

23845

23928

7

18996

18586

22208

22211

8

17889

17389

20729

20727

9

16879

16289

19373

19374

10

15919

15274

18115

18114

11

15104

14347

16967

16968

12

14547

13513

15935

15933

13

14023

12725

15324

14962

14

13522

11989

14400

14033

15

13054

11337

13931

13161

16

12609

10722

13487

12337

17

12197

10144

13074

11570

17N

11833

-

12711

-

18

11794

9592

12671

10823

18N

11248

-

12126

-

19

11439

9096

12317

10166

19N

10894

-

11792

-

20

11106

8637

11984

9546

20N

10561

-

11439

-

Ex. Impressed

8819

 

9545

-

The collective agreement involving the EPOU covers PE grades that fall in the 5-9 salary scales bracket. A new structure was created for PE grades which are based on three categories: Category A (scale 5) – Senior PE; Category B (scale 6 and 7) – PE and Category C (Scale 8 and 9) – Associate PE. The new categories absorbed the grades of PE I, II, III and PE trainees enjoyed a collective agreement yearly increase of €920.

The table below shows that the average salary at Enemalta per annum, is higher than the national average

Comparison salary scales

Enemalta scales (maximum of) 5 to 20 average 2010 (€)

Public service scales (maximum of) 5 to 20 average 2010 (€)

Public service scales (maximum of) 1-20 average 2010 (€)

Industry and energy (Oct – Dec 2010) average wage (€)

National average wage (Oct – Dec 2010) (€)

15,676

16,219

19,703

14,160

14,448

Source: Enemalta collective agreements with GWU and EPOU 2006-2010

In 2010 the GWU and Enemalta produced a side agreement (termed restructuring reform) for employees in the maintenance section, distribution workshop and stores. The side agreement’s target is to compensate for employees additional responsibilities and to incentivise these employees to acquire higher level of skills through attending a training programme. Furthermore, it provides for the restructuring of grades, work practices, shift and new salary scales. Allowances can also be granted to compensate for job upgrades; however this method can induce a sense of unfairness among employees.

4.3. Cooperation between the social partners and government

  • Have the government started any social dialogue or social concentration in the electricity sector since 2008? Please illustrate the features and results of any such initiatives.
  • Have bipartite and/or tripartite bodies dealing with specific issues of the electricity industry been created since 2008?
  • Have there been since 2008 any joint initiatives of cooperation between social partners to influence or steer the energy policy developed by the government in your country? Or have such initiatives been taken separately by certain social partner organisations?
  • Have the social partners been involved in the making of the national action plan to reach the 2020 target, or in issues aiming to secure the supply of enough electricity?

As described in section 1.4, consultation with social partners related to the electric energy policy is limited. However, social partners were heavily involved in debating the increases in utility tariffs. In October 2008, the government announced a hefty increase in the electricity tariffs that brought about protests from the social partners. Twenty trade unions organised a protest march in the capital Valletta, including the GWU and the UHM together for the first time.  A number of trade unions held a meeting with the Prime Minister, calling for measures aimed to reduce the tariffs, such as an increased price cut in the tariffs of households consuming low levels of electricity and a higher consumption ceiling in order to benefit from rebates. The Prime Minister, in a letter sent to the unions following the meeting, stated that as a result of the meeting 138,333 domestic accounts out of a total of 190,342 will benefit from eco-reductions. However, this brought about disagreement between trade unions after the UHM, a member of the Confederation of Maltese Trade Unions (CMTU), said it was satisfied with the measures. On the other hand the Malta Union of Teachers (MUT), at the time also a member of the CMTU differed, and along with other unions including the GWU requested further clarifications. Eventually the CMTU suspended the MUT which led to the latter deciding to leave the confederation. 

 By the end of 2009, the government once again announced higher electricity rates which this time brought about a new front called Għaqda Unions Maltin (Organisation of Maltese Unions OMU), composed of the GWU and FORUM, a confederation made up of 11 trade unions specifically set up to make pressure on government to revise the newly announced electricity tariffs regime. The Unions organised two protest marches in Valletta, one of which coincided with the vote on a motion in parliament presented by the party in opposition, the Labour Party (PL) against the tariffs. The motion was defeated and the new tariffs were approved.

4.4. Please provide information about the views of the trade unions and employer organisations on the main changes regarding employment and working conditions affecting the sector since 2008 and especially on the impact of the current crisis (for instance on employment trends, quality of jobs, working hours, wages, fixed-term employment, part-time, temporary agency work, participation in training, outsourcing, subcontracting etc.).

The fact that the sector is monopolised by the public corporation Enemalta, which is heavily unionised and covered by collective agreements, facilitates healthy conditions of employment of its workers. In the receptive collective agreements, the GWU, the EPOU and Enemalta agreed to work jointly to enhance the concepts of adaptability, multi-tasking, multi-skilling and lifelong learning.

Trade unions usually voice their concern about issues such as precarious employment on a generic basis. The GWU has been the most vociferous so far and has pinpointed a number of state owned companies that have resorted to subcontracting security and cleaning tasks to private contractors practising precarious employment conditions such as bogus self employment. So far Enemalta was not mentioned among the state owned companies awarding such type of contracts. The predominant kind of employment contract is whole-time, on indefinite period. In March 2011 there were only 16 part-time employees engaged in the electricity, gas and water supply sector (NSO news release 159/2011). The issue of fixed-term employment in Enemalta is more likely to affect top grades. On the other hand, in February 2011 the GWU ordered an industrial action following the establishment of the Automated Revenue Management Services (ARMS) Ltd - a private limited liability company jointly owned by Enemalta and the Water Services Corporation. ARMS Ltd took over Enemalta’s customer care and compliance office and led to the dismantling of the credit control unit of the corporation. The issue was over alleged discrimination of 12 former credit control unit employees, were among others the union claimed that they were not given work for over a year. The directives that caused a backlog of applications for Enemalta services were lifted after the Director of Industrial and Employment Relations (DIER) chaired the mediation process and was agreed that the workers are to be given new roles within the corporation.

5. Commentary

The contribution of social partners in government’s energy policy to date has mostly been limited to pre-budget proposals. They are more concerned about how successive increase in utility tariffs is affecting workers standard of living, the stability of businesses and the national economic competitiveness. The monopoly enjoyed by Enemalta in the electrical energy sector is often regarded as a prime factor that fuels its inefficiencies, which in January 2011 led Standard and Poor’s to reduce the corporation’s credit rating. By the end of 2010 Enemalta’s debts amounted to €557 million.

The conditions of employment of Enemalta employees are governed by standard state policy involving public entities which to a certain extent provide minimal industrial disputes. However the streamlining of salary scales with those of public sector employees could induce a certain degree of rigidity and prove among others to be a de-motivating factor among employees. Wages which are based on grades and not on positions make it difficult to offer adequate monetary compensation for extra responsibility, unless a side agreement is signed.

While the energy policy document hints at government’s willingness to create market competitiveness in the sector, the main obstacle remains that of the commercial viability of projects such as the case of the proposed wind farm and the limitations associated with the small geographical size of the Maltese islands. Thus the sector’s market situation is not expected to change significantly in the near future.

Louis Grech, Centre for Labour Studies

Page last updated: 15 November, 2012
About this document
  • ID: MT1202029Q
  • Author: Louis Grech
  • Institution: Centre for Labour Studies
  • Country: Malta
  • Language: EN
  • Publication date: 15-11-2012
  • Sector: Electrical