Collective bargaining in Malta

Collective bargaining in Malta is decentralised and takes place mainly at single-employer bargaining level. Employees voluntarily join a trade union, and the union gains the right to negotiate on behalf of the workers once it reaches membership of 50% + 1 of employees working in a company or in a particular job category within the company. The union informs the management of the company and the director of DIER of its intention to start collective bargaining within that company. Apart from collective negotiation, Legal Notice 2006 – Employee (Information and Consultation) Regulations – which transposes Directive 2002/14/EC, establishes that the union has the legal right to be consulted and informed of all matters relating to employment relations. It should be noted that there have been cases where particular categories of employees claim separate recognition from that of other workers within the same organisation. Collective agreements are legally binding.

Official data referring to collective bargaining in Malta are unavailable. The figure derived from the Structure of Earnings Survey reflects the trade union density in Malta, which is normally estimated to be around 50%.

Collective wage bargaining coverage of employees

Sources: Eurofound, European Company Survey 2013/2019 (including private sector companies with establishments with more than 10 employees (Nomenclature of Economic Activities codes B–S), with multiple answers possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01] (including companies with more than 10 employees (Nomenclature of Economic Activities codes B–S, excluding O), with a single answer for each local unit); OECD and AIAS (2021).

A survey carried out in the last quarter of 2014 by the NFTU indicates that 55.8% of all employees have a collective agreement at their place of work. This survey was based on a sample of 781 employees representing all employees in Malta. The figure excludes employees who are unsure as to whether or not they have a collective agreement at their place of work. The NFTU is composed of 22 trade unions (NFTU, 2015).

The collective agreement for public service employees can be regarded as the sole agreement at sectoral level. The Collective Agreement for Public Service Employees (2017–2024) covers around 30,000 employees (Malta Independent, 2017). Collective bargaining in Malta takes place mainly at the company level. Collective bargaining at the company level includes entities in which the state is the majority shareholder, statutory independent bodies, and the private sector. In 2023, 218,000 were employed in the private sector, whereas 51,000 were employed in the public sector (NSO, 2023b). According to a report issued by the Central Bank of Malta (2014), around 23% of workers in the private sector were covered by a collective agreement in 2013.

Levels of collective bargaining, 2022

Articulation

Articulation does not apply to Malta.

While collective agreements occur throughout the year, one can generally note the conclusion of a number of collective agreements, mostly concerning the public sector, during the weeks immediately prior to political elections.

Collective bargaining coordination across sectors is limited to that facilitated by the government, through existing legislation, within tripartite boards. For instance, an Incomes Policy Agreement was reached between the social partners in 1990 within the tripartite Malta Council for Economic and Social Development, in which the mechanism of the annual cost-of-living adjustment based on the Retail Price Index was established. The annual cost-of-living adjustment rate is mandatory. The basic rate of all wages across the economy must be topped up with this increment every year.

The Public Administration Collective Bargaining Unit is explicitly responsible for coordinating wage changes in the public sector.

There are no extension mechanisms relating to collective agreements in the Maltese system.

Derogation is not possible. Respect for collective agreements is monitored by relevant trade unions and DIER, and derogations can be contested through the Industrial Tribunal and the courts.

The existing collective agreement remains valid until it is superseded once a new one is signed.

There is no obligation to hold industrial peace during the validity of a collective agreement. Collective agreements usually include clauses containing the procedure to follow in order to solve an industrial dispute.

The Collective Agreement for Public Service Employees 2017–2024 includes an upgraded structure of qualification allowances. The public administration emphasises the enhancement of qualifications and skills of its employees, so much so that it set up the Institute for the Public Services in collaboration with the University of Malta and Malta College of Arts, Science and Technology. This collective agreement also provides a new measure for employees who choose to work after reaching their retirement age. These employees can now take their pre-retirement leave once they retire from service.

A new measure was included in the latest collective agreements pertaining to companies operating in the banking sector. This involved the abolition of the traditional grade structure in favour of a ‘position-based’ system that relies on a job evaluation exercise. Such collective agreements also include a number of family-friendly measures, profit-sharing schemes, home loan schemes and study grants.

The agreement for teachers in state schools signed in 2017 includes the creation of a work resources fund. Teachers should be provided with up to 360 hours of training to help them to achieve quicker career progression. A change in syllabi is also addressed, in order to give teachers more autonomy and freedom during their lessons.