Social dialogue and conflict resolution

Kranj, 31 March - 2 April 2004 Kokra Hotel (Brdo Estate) Kranj, Slovenia

National development project - Malta

by Edward Zammit

Vision for the future of social dialogue and conflict resolution developments: strengthening conflict resolution at sectoral and national level

1. Conflict Resolution at the Enterprise Level

The above evidence suggests that the services for conflict resolution, particularly these offered by the Department of Industrial and Employment Relations, are effective in dealing with enterprise level conflicts. The institution of free collective bargaining is well established and its functioning reflects the efficiency of the organizations representing the interests of both workers and employers. Nevertheless, the changes which the Maltese economy and society are currently undergoing demand that these services become more expeditious. The need to restructure Maltese industry – both the manufacturing and services sectors due to increased international competition – is posing a serious threat to these institutions. Very often, the term restructuring is simply a euphemism for downsizing. It is becoming increasingly evident that the maintenance of a constant increase in living standards – which has been at the root of successful collective bargaining for several decades – is no longer feasible. In other words, the limitations to collective bargaining are becoming increasingly evident. A new basis for industrial relations must be sought and established if the system is to continue to operate in future. Undoubtedly, this is a major challenge.
At present the services of conciliation/mediation are too dependent on the services of a single person, the Director of DIER and occasionally a few others. These may intervene spontaneously and act as conciliators /mediators whenever conflicts arise. This expertise needs to become more institutionalized and the expertise of the Department’s officers needs to be upgraded through professional training.

Furthermore, the system needs to become more proactive through the strengthening of the Department’s research and advisory services. These services may be performed both ‘in-house’ and may be farmed out through an agreement with the relevant research department at the University. These services which are currently performed on an occasional, ‘ad hoc’ basis need to be provided regularly. This, in addition to the professional training of the DIER’s staff, is likely to lead to the long-term improvement of conflict resolution mechanism and to meeting the new, emerging challenges.

2. Conflict Resolution at the Sectoral Level

The experience of sectoral level collective bargaining has, up to now, been very limited in Malta. Variations in the economic performance of different enterprises and hence in their ability to pay their employees, makes such bargaining difficult and undesirable among trade unions and employers alike. Nevertheless, where enterprise level bargaining does not take place, mainly due to non unionization, particularly in SME’s, the minimum levels of pay and other conditions of employment are determined by law. In these circumstances, the minimum conditions of employment are established through EIRA. These take the form of ‘National Standard Orders’ and the relevant Legal Notices applicable to various Sectoral/Wages Councils. There are currently 32 of these tripartite councils, operating under the Employment Relations Board, which advise the Minister on the specific minimum conditions applicable to the various sectors.

It is proposed that the role of these councils should be reviewed and rationalized. Such an exercise should also be based on the outcome of research – particularly aimed at establishing objective criteria for the measurement of productivity and competitiveness in the different sectors.

Another area where sectoral bargaining in Malta takes place is in the public sector and this is where a number of industrial conflicts tend to erupt from time to time. Nevertheless, EIRA excludes the application of its dispute resolution mechanism to the ‘government employment’ sector. (Sec.84 (1). This situation prevails despite the experience of collective bargaining in the public sector for many years. Disciplinary cases, including dismissal, of employees in the public service fall under the Public Service Commission – which is protected by the Constitution. In the case of disputes involving parastal organizations and other semi autonomous public sector bodies, however, the same provisions prevail as for all other employees. The application to civil servants of the section of EIRA dealing with minimum conditions of employment (Title 1) and the establishment of an Industrial Tribunal for them awaits a future decision by Government.

3. Conflict Resolution at the National Level

Following the recent outcome of the referendum on EU accession and the general election which succeeded it, one main issue regarding Malta’s future has now been settled. As a result, a more constructive atmosphere now generally prevails. This is also reflected at the level of MCESD. The social partners are now eager to look for collective solutions to national problems through national level bargaining. Some results have already been achieved such as an agreement among the social partners, including government regarding the search for a long-term reform of the National Pensions Scheme and a re-structuring of the shipyards’ workforces. Exhaustive consultations were also among the social partners and the Ministry of Finance prior to the presentation in parliament of the Government’s 2004 Budget. It is also significant that frequent public references are being made to the need for negotiating a ‘national social pact’ among the social partners – along the lines of similar agreements which were reached in countries like Ireland, Holland and most other EU member states. This goal was echoed in the 2004 Budget Speech under the title of ‘Competitiveness’ where it is stated that: “The Malta Council for Economic and Social Development… is committed so together we look into all those factors that affect competitiveness in order that we reach a Social Pact that paves the way to speed up progress.”(see footnote)

The success of this venture, however, requires a fundamental change in the culture which characterizes relations among the social partners – including their reciprocal attitudes and relations. A code of practice needs to be developed. The ultimate aim is to bring about a change in culture from confrontation to cooperation. New ideas, perceptions, values and norms must be developed through focused training programmes. These programmes must themselves be based on comparative research supported by experiences of effective social dialogue both in Malta and in other European states. The media of mass communications may also contribute towards the cultural change which needs to be supported by the people in the country at large.

Assistance must be provided by Government to strengthen the social partners themselves. Experience shows that a degree of self confidence is required to enable them to lead their members and followers along uncharted territory.

4. Action Plan

It is proposed that informal discussions should be held as soon as possible among all the different parties (i.e. involving the Ministry for Social Policy, MCESD, DIER and the University) aimed at devising a strategy for the implementation of the development project outlined above. Following these discussions, a formal agreement should be made among the social partners at the level of MCESD. This agreement should also include a commitment of the necessary human and financial resources for its implementation. Furthermore an application should be submitted for supplementary assistance from the relevant EU programmes aimed at strengthening the mechanisms for conflict resolution in Malta at the various levels.

Footnote:

1. Budget Speech - 2004. Ministry of Finance and Economic Affairs, Malta, November, 2003.