Two important events took place on the Maltese political scene in 2003. The first was a referendum on EU accession, held in March. The second was the general election, held a month after the referendum. The turn-out for the referendum was 92% of eligible voters. The 'yes' camp, supported by the governing Nationalist Party (NP) gained 53.6% of the votes cast. The validity of the result was, however, questioned by the Malta Labour Party (MLP), which claimed that since less than half the eligible voters voted for membership, the Maltese electorate had rejected EU membership.
This record reviews 2003's main developments in industrial relations in Malta.
Political developments
Two important events took place on the Maltese political scene in 2003. The first was a referendum on EU accession, held in March. The second was the general election, held a month after the referendum. The turn-out for the referendum was 92% of eligible voters. The 'yes' camp, supported by the governing Nationalist Party (NP) gained 53.6% of the votes cast. The validity of the result was, however, questioned by the Malta Labour Party (MLP), which claimed that since less than half the eligible voters voted for membership, the Maltese electorate had rejected EU membership.
The general election was held on 12 April. Malta's electoral history has been largely bipolar since independence in 1964, with only the NP and MLP gaining seats in the House of Representatives. Apart from a two-year stint for the MLP between 1996 and 1998, the NP has been in power since 1987. The 2003 elections took place just after the referendum and were won by the NP, with 51.8% of the vote. The results were interpreted as a confirmation that the majority of the Maltese citizens are in favour of joining the EU.
Following the results of the referendum and the subsequent general election victory for the NP, the re-elected Prime Minister, Eddie Fenech-Adami, and the Foreign Minister, Joe Borg, signed the Treaty of Accession to the EU in Athens on 16 April 2003.
Local elections were held in 22 localities (a third of the total) on the same day as the referendum. The MLP polled around 7% more votes than the NP, compared with a loss of 2% it sustained in the local council elections held in the same localities three years before. The next elections will take place on 13 March 2004 in 22 local councils.
The most important political event for Malta in 2004 will be joining the EU on 1 May. As is the case with all the other EU countries, Malta will hold elections to the European Parliament between 10 and 13 June 2004. On 18 November 2003, the MLP chose four candidates to represent it in these elections. The NP will select its candidates and embark on its campaign in January 2004.
Collective bargaining
In Malta, all collective agreements are negotiated at company level. In 2002, 42 collective agreements were negotiated. According to the Department of Industrial and Employment Relations (DIER), 41 collective agreements were negotiated in 2003.
No official statistics regarding developments in the content of collective agreements - such as pay, working time, job security, equal opportunities, or training - exist in Malta. However, a recent survey has examined the period from 1996 to 2003, providing an analysis of 80 collective agreements signed by 46 different firms - Trends in collective bargaining in Malta: 1998-2003, Joe Montebello, Malta Workers’ Participation Development Centre (unpublished report, 2003). The following information is mostly derived from this survey.
Pay
The average annual wage increase provided for by collective agreements was around 2.5% in 2003, exclusive of the statutory annual cost of living increase. In 2003, due to economic recession and the consequent critical situation in several employing organisations, trade unions adopted a policy of wage moderation.
Working time
Apart from the critical issue of wages and salaries, the main item of discussion and negotiation in collective bargaining in 2003 was that of 'special leave'. Paid leave is almost always of short duration, whereas unpaid leave is of a longer duration that can last up to 52 weeks. With respect to both paid and unpaid leave, company management retains overall discretion on its use. Under all collective agreements, employees have the right to paid time off for personal and family reasons.
Most collective agreements specify a normal weekly working time of 40 hours. Some collective agreements provide for flexible hours, enabling employees to adjust their working time to balance work with other personal commitments.
Training and skills development
A survey carried out by the National Statistics Office (NSO) in 2003, reveals that around 6% of employees were engaged in training or education in December 2002. Much of the training and education programmes undertaken by people in employment appear to be taking place in the working environment itself. In Malta, it is normally the employees’ responsibility to ask their company’s management for training and skills development. Only a quarter of the companies examined may grant special unpaid leave for educational purposes. Some firms grant such leave if the studies being undertaken are related to employees’ work. The number of days granted varies from one day for exam-sitting purposes to a maximum of 52 weeks. The term 'educational purposes' sometimes includes participation in national sports events. The conclusion reached by the NSO survey is that taking into consideration the current needs for continuous training in an evolving labour market, the existing provisions for even unpaid educational leave in Maltese industry appear grossly under-developed.
Other issues
Occupational health and safety (OHS) arguably does not seem to be given its due importance by employers and employees. Collective agreements provide for workplace health and safety committees and for private health insurance to cover part of the medical expenses than an employee might incur. However, data tends to suggest that there is a lack of serious commitment among management and employees to an effective OHS policy, while health and safety committees tend not to function properly.
Legislative developments
In December 2002, the Maltese parliament approved a new Employment and Industrial Relations Act (EIRA) following a wide process of consultation which took over eight years. The new law, which came into force in 2003, brought Maltese legislation into line with the 'acquis communautaire' (the body of EU law that new Member States must implement), taking into consideration the changing social and economic realities of Malta. It is intended to enhance the general quality of life by balancing work and non-work obligations, and addresses both the gender gap and the skills gap in the Maltese labour market. More specifically, it seeks to: introduce 'family-friendly' measures at the workplace; eliminate discrimination; introduce gender mainstreaming policies; increase the protection of workers on fixed-term and part-time contracts; and provide protection to workers in the event of collective redundancies and transfers of business. It also provides for the setting up of a guarantee fund for workers of insolvent employers. The EIRA is accompanied by a number of regulations which bring into force specific provisions. Most of these regulations are due to come into force in 2004.
The Equality for Men and Women Act was another important piece of legislation adopted in 2003. It aims to eliminate any form of discrimination that inhibits equality of treatment for individuals and to promote the dignity of every citizen.
The organisation and role of the social partners
There were no changes in the organisation of social partners during 2003. Statistics show that major trade unions have registered a decline in membership in private manufacturing and privatised or restructured public entities. During 2002 and 2003, a marginal decline in trade union membership was recorded for the first time since the Registrar of Trade Unions first published trade union data in 1976, with density falling from 63.0% in 2001 to 62.8% in 2002 and 62.5% in 2003 (MT0404102F). If this trend continues, the organisation and role of trade unions may be affected in years to come. Several employers’ organisations (MT0310101F) have also registered a decrease in their membership.
The Malta Chamber of Commerce (COC) expressed its interest in amalgamating other employers’ organisations during 2003. However, this merger did not materialise and seems unlikely to take place in future years, as employers’ associations are generally happy with their independence. However, most associations are advocating closer collaboration among themselves.
During 2003, all social partners geared their efforts towards the issue of joining the EU. Most social partners, with the exception of the General Workers’ Union (Malta’s largest trade union) and a few other minor organisations, had lobbied in favour of Malta joining the EU. In 2003, the social partners began offering specialised information to their members in relation to EU issues.
Industrial action
In recent years, apart from a few sporadic disputes in the public sector, Malta has experienced an atmosphere of relative industrial peace. While the number of industrial disputes registered with the DIER has fluctuated in the past 10 years, the number of days lost to industrial action has been following an overall downward trend. Unions are being cautious in their dealings with employers in the private sector, given the precarious economic situation. On the other hand, employees in the public sector tend to feel more insulated from market pressures and their wage demands are usually phrased in terms of social justice rather than competitiveness. As a result, most of the registered strikes in 2003 occurred in the public sector - see table 1 below.
| Date of commencement | Duration | Establishment affected | Sector | Union involved |
| 8 January | 6.4 days | Harbour Pilots | Public | UHM* |
| 27 January | 2.5 days | Malta Dairy Product | Private | UHM |
| 19 February | 5 days | Enemalta | Public | GWU** |
| 8 July | 1 day | Koperattiva Indafa Publika - San Gwann | Private | KIP*** |
| 14 August | 1 day | Vivaldi Hotel | Private | GWU |
| 9 September | 1 hour | Agenzija Appogg | Public | UHM |
| 10 September | 4.5 hours | Port Blockage | Public | GWU |
| 1 October | 1 hour | Malta International Airport | Public | UHM |
* UHM = Union of United Workers (Union Haddiema Maghqudin); ** GWU = General Workers’ Union; *** KIP = Public Cleaners Cooperative (Koperattive Indafa Publika).
Source: DIER 2004.
Employee participation
The European Works Council (Information and Consultation) Regulations were enacted in 2003 to supplement the EIRA, implementing the EU Directive (94/45/EC) on European Works Councils (EWCs). The Regulations are intended to improve the rights of employees to be informed and consulted through the establishment of an EWC or equivalent arrangements. These regulations come into force on 5 April 2004.
The European Company Statute and its employee involvement Directive (2001/86/EC) (EU0206202F) have not yet been incorporated into Maltese law. They are being reviewed by the government’s Employment Relations Board (established by the EIRA) and will probably be enacted in 2004. To date, there have been no moves to implement the Directive on national information and consultation rights (2002/14/EC) (EU0204207F).
Stress at work
In Malta, stress at work is hardly ever a topical issue. An [Occupational Health and Safety Authority](http://www.msp.gov.mt/services/subpages/content.asp?id=58&heading=Health and Safety - Departments#Top#Top) was set up in 2000 in order to promote health and safety at places of work. The Authority also acts as the national focal point for the European Agency for Safety and Health at Work. However, the concept of stress is not mentioned in Maltese health and safety laws, though the Occupational Health and Safety Authority Act (2000) states that employers need to prevent 'psychological occupational ill-health', which is interpreted as including stress. Importance is mostly given to strictly physical issues. No position papers exist on this topic. Ministers and other authorities occasionally pay lip-service to the issue of stress, but the extent and nature of stress at work in Malta has hardly ever been studied. The only local survey on the topic was carried out by the European Foundation for the Improvement of Living and Working Conditions in 2001.
Undeclared work
Undeclared work is a relatively dormant issue in Malta. Trade unions tend not to discuss it, although it is occasionally mentioned by politicians, economists and other researchers, but not given particular importance. There are no official statistics relating to undeclared work in Malta.
The EU's 2003 employment guidelines (EU0308205F) include a guideline (no. 9) on 'transforming undeclared work into regular employment'. In this context, a committee made up of representatives of the Employment and Training Corporation (ETC), the Ministry of Social Policy, the Ministry of Finance and Economic Services and the Ministry of Education was set up in August 2003 in order to draw up and plan a national campaign against undeclared work. This committee is responsible for the exchange of data to help each organisation fight undeclared work, tax evasion or fraud in social benefit claims. A total of 125 people were found to be working illegally while registering for employment between January and July 2003.
The Malta Chamber of Commerce (COC) is the organisation that has been most in the forefront of action on this issue. The COC is an autonomous institution aimed at promoting, servicing and representing the interests of the business community. It believes that industry and workers are being highly taxed to the extent that the current tax policy is acting as a disincentive to effort, investment and innovation on the part of employers and to work and effort on the part of the workforce. This is resulting in an increased temptation to perform undeclared economic activities, which triggers further abuse of the social security system.
New forms of work
There are no comprehensive statistics regarding new forms of work in Malta. However, the government’s Employment and Training Corporation has commissioned a report which aims to throw light on the nature and extent of atypical work in Malta. The report will be completed in 2004.
Fixed-term employment
The Contracts of Service for a Fixed Term Regulations (2002) complementing EIRA came into force in 2003. These regulations protect workers on fixed-term contracts against discrimination on the basis of their contract of service. Amongst other points, the regulations promote access of these employees to appropriate training opportunities and establish a duty on employers to inform these workers of open-ended employment opportunities.
According to the 2003 report by Joe Montebello cited above, most fixed-term contracts are found at top management level. However, fixed-term contracts are increasingly being found at lower levels. As can be seen from table 2 below, NSO statistics show that 3.8% of employed people were working on a temporary or fixed-term contract in June 2003. This proportion has remained relatively stable in recent years. A larger proportion of women are employed on a temporary or fixed-term basis than men (5.0% and 3.2% respectively). However, while the proportion of men in temporary work or working on a fixed-term contract has remained largely constant over the past two years, the proportion of women on such contracts has decreased by 1.5 percentage points.
| . | % within main occupation | |||||
| Permanent work or an indefinite contract | Temporary work or a fixed-term contract | |||||
| Males | Females | Total | Males | Females | Total | |
| June 2001 | 97.0 | 93.5 | 96.0 | 3.0 | 6.5 | 4.0 |
| June 2002 | 97.0 | 94.4 | 96.2 | 3.0 | 5.6 | 3.8 |
| June 2003 | 96.8 | 95.0 | 96.2 | 3.2 | 5.0 | 3.8 |
Source: NSO
Part-time employment
The Part-Time Employees Regulations (2002) complementing the EIRA came into force in 2003. They protect part-time employees against discrimination on the basis of their employment contract. The regulations deal with several issues, including holidays, entitlement to participate in vocational training and a duty on the employer to inform part-time employees about full-time opportunities.
NSO statistics reveal that around 7.3% of employees had a part-time job as their main occupation in June 2003 - see table 3 below. This figure was lower than in the previous two years (see table). The proportion of women performing part-time work is much higher than that of men (15.4%, compared to 3.7%).
| . | % within main occupation | |||||
| Full-time job | Part-time job | |||||
| Males | Females | Total | Males | Females | Total | |
| June 2001 | 96.3 | 82.9 | 92.3 | 3.7 | 17.1 | 7.7 |
| June 2002 | 95.7 | 81.1 | 91.2 | 4.3 | 18.9 | 8.8 |
| June 2003 | 96.3 | 84.6 | 92.7 | 3.7 | 15.4 | 7.3 |
Source: NSO
Other relevant developments
Perhaps the most significant single industrial relations development in 2003 was the restructuring of the state-owned Malta Drydocks and Malta Shipbuilding (MT0312102N), following lengthy negotiations between the government representatives and the GWU trade union. The two entities were dissolved in November and their assets and liabilities transferred to the government. A new company, called Malta Shipyards, will absorb 1,700 workers from the previous workforce of 2,600 under new conditions, including the introduction of a shift system which will substantially reduce overtime. The company will rent dockyard facilities from the government. Nearly half (418 out of 900) of the workers evaluated by the management to be surplus accepted early retirement schemes. The remaining workers have been absorbed by another new company and posted to the civil service and public-private partnerships
A collective bargaining unit was set up under the auspices of the Ministry of Finance to negotiate collective agreements on behalf of the government departments and other government-run or -owned enterprises.
Outlook
2003 was marked by the EU referendum and the subsequent political elections. Uncertainty about joining the EU may have contributed to slow growth and created instability. Job losses over the period from April 2003 to January 2004 amounted to over 1,140. The manufacturing sector experienced most problems as several factories closed down and others reduced their workforce (MT0402102N). Growth registered by the Maltese economy was about 1.5%.
A government, reshuffle, due to the probable resignation of the Prime Minister and the appointment of a minister to the European Commission, is unlikely to bring about any changes in policy-making. In the first four months of 2004, there will be local council elections in a third of councils and elections for Malta’s first five members of the European Parliament. There will also be the appointment of a new President.
Reduction of financial deficit and finding solutions to the unemployment problem (MT0403101N) will be high on the government agenda. This is at a time when the Maltese will have to acclimatise themselves to the EU acquis communautaire, following accession on 1 May 2004.
Reforms to the health system are expected to take place in 2004. The social partners also have to reach a consensus about changes to the pensions system (MT0312101N). These reforms may lead to some conflictual relations among the social partners.
Finally, in 2004, the government will try to establish a 'social pact' with the social partners. (Manwel Debono, Malta Workers' Participation Development Centre)
Eurofound recommends citing this publication in the following way.
Eurofound (2004), 2003 Annual Review for Malta, article.
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