Malta: Temporary agency work and collective bargaining in the EU

  • Observatory: EurWORK
  • Topic:
  • Published on: 18 Diciembre 2008


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The practice of temporary agency work is still under-developed in Malta. Since 2004, a number of legal changes have affected temping, but no comprehensive legal framework has been enacted. There are no quantitative studies about the practice of temping in Malta. However, temporary work in Malta in 2004 stood at 3.6%. While the General Workers’ Union tends to be sceptical about temporary agency work, the Malta Employers’ Association promotes the idea as a means of increasing the adaptability of enterprises.

Section 1. Definitions

1) In your country, is there a statutory definition of:

a) temporary agency work?b) agency worker?c) user enterprise?

These terms are not defined in Maltese law. While temping services are listed among the recruitment services which require a licence, they are not described.

2) Is there a collectively agreed definition of:

a) temporary agency work?b) agency worker?c) user enterprise?

No collective agreement is known to have defined such terms. The General Workers’ Union (GWU), Malta’s largest trade union and the one which signs most collective agreements does not have any agreements which deal with TAW. Collective agreements in Malta are signed at company level, and since no studies exist about the topic, it is not possible to categorically exclude that such terms have ever been defined in a collective agreement.

3) In your country, would you describe TAW as a sector in its own right?

TAW cannot be defined as a sector in its own right. It takes more the shape of a contained phenomenon manifesting itself in particular sectors and companies. The few agencies which practise temping, supply their services to other industries.

Section 2. Regulatory framework

1) Have there been any changes in the law concerning TAW since 2004?

a) Yes b) No

The following are the main recent legal changes that have affected temporary workers:

  • In 2005, the government extended the applicability of lower tax on part-time work to spouses working only part-time when their spouse is in full-time employment.
  • Through the Tax Credit (Women Returning to Employment) (2005), women being absent from the labour market for more than five years started receiving a tax credit of 1,600 Euros for two consecutive years when they return to work.
  • The social security contribution paid by part-time employees for whom such employment is their main job was changed so that, as from January 2007, employees working eight hours or less started paying a maximum of 10% of what they earn from such work instead of the previous statutory minimum that applied to all workers and which eroded significantly into part-time earnings.
  • As from July 2007, part-time employees working a minimum of eight hours a week started to be entitled to all pro-rata benefits which a comparable full-time employee in the same category is entitled to. This was made possible after the government amended the Part-Time Employees Regulations (2002) and phased out the previous threshold of 20 hours.
  • In the Budget 2008, it was announced that pensioners shall be entitled to work and have earnings even exceeding minimum wage without forfeiting any part of their pension.

In the Budget 2006, the government acknowledged that there are employers who abuse from persons in temping positions, and declared its intention to discuss with the social partners about legal provisions to regulate such employment. However, no new regulations materialized. Similarly, in the Pre-Budget 2008 document, the government stated that “the time has come for a consideration of the feasibility of regulating the employment relationship and the working conditions of persons in temping positions, in recognition of the rise of this form of work in Malta”. Besides, it proposed a change in the system of registration of unemployed persons in order to give them an incentive to accept opportunities for temporary employment. Interestingly, the final version of the Budget 2008 only included the second and less ambitious proposal, meant to help the registering unemployed persons who accept temporary jobs “by their not losing their ranking order according to the register and their social security contribution being once again credited when the temporary employment comes to an end”. This change was carried out.

2) How is TAW regulated in your country?

a) Is there a legal framework specifically for TAW; and/or is it covered by general labour law (including case law/ jurisprudence)?b) What is the role, if any, of collective labour agreements and self-regulation?

To-date there is no specific legal framework regulating TAW in Malta. Indeed, TAW is governed, albeit inadequately, by the general regulations under the Employment and Training Services Act (1990) (including the Employment Agencies Regulations, 1995), and the Employment and Industrial Relations Act (EIRA, 2002) (including the Contracts of Service for a Fixed Term Regulations, 2007; and the Part-Time Employees Regulations, 2002).

3) What is regulated in these provisions? In particular, does it cover:

a) use of agency work (e.g. length of assignment, sectoral bans, permitted reasons of use, number of agency workers per company, other)b) the form of the contract (e.g.project, fixed-term, special contract, open ended, etc.)c) social security and social benefitsd) conditions to open a TAW agency (e.g. license or authorisation schemes, supervision by public authorities, financial requirements, or others - please specify)e) business activities/services delivered by TW agencies (e.g. prohibition to provide other services than TAW)?f) third-national companies or temporary agency workers (e.g. activities of foreign agencies)?

As stated above, there is no specific legal framework governing TAW in Malta.

4) Do any regulations (by law and/or collective bargaining in the TAW sector) specify equal treatment rights for agency workers with permanent workers in the user enterprise concerning:

a) payb) trainingc) other terms or conditions of employment?

If yes, please give details.

Only the Employment Agencies Regulations (1995) mention the working conditions relating to temping services. These state that “Where a person is employed by an employment agency or employment business and referred to an employer by it to perform service temporarily for that employer, the employment agency or employment business shall not charge such employer rates for the services provided which are less than those payable by such employer to his regular employees for similar work.” Other issues relating to conditions of employment are only covered in a general way by the Maltese employment law EIRA (2002).

5) Do TAW workers have the right to information, consultation and representation?

If yes, please specify the nature/basis.

The Employee (Information and Consultation) Regulations (2006) do not mention the notion of TAW, and since the issue has to-date never been contended, it is unclear whether TAW workers have the right to information and consultation in the user enterprise. On the other hand, TAW workers have the right of representation as all other workers in Malta.

6) Is there a control/enforcement mechanism regarding any TAW regulation?

If yes,

a) is there a special labour inspectorate or a bi-partite body governing TAW?b) are there any sanctions/penalties for not respecting the regulations (whether stemming from law and/or collective agreements)?

There is no special inspectorate section governing TAW and no specific sanctions due to lack of legislation. The Department of Industrial and Employment Relations (DIER) is in charge of monitoring the working conditions of all employed persons, including those on a temporary basis.

7) Are there any procedures governing use of TAW and strike breaking?

In particular, can workers on strike be replaced by agency workers?

No such procedures exist.

Section 3. Social dialogue and collective bargaining

1) Is there any employers’ association(s) for TAW firms in your country?

If yes, please provide any data on membership (e.g. sectoral coverage of firms/workers)

There are no employers’ associations for TAW firms in Malta. The few firms offering temping tend to work in isolation from each other and are not united under any employers’ association. While some employers’ associations, especially the Malta Employers’ Association (MEA), have in the past declared that more TAW is needed to fill in the vacancies of employees caused by temporary absence of leave or working reduced hours. There have been no attempts to unite such firms under one association.

2) Is there any union(s) specifically for agency workers?

If no, have any unions or confederations targeted the recruitment of agency workers? launched any campaigns around agency workers’ rights?

There are no unions set up specifically for agency workers. The GWU is probably the union most vocal on the issue of TAW. In 2007, the union launched a campaign called to educate employees who have individual contracts about their employment rights. The GWU declared its intention to try to organize temporary workers and other forms of atypical workers in order to help them improve their working conditions. The union stated that it wants to work with employers’ associations towards a model contract which incorporates basic working conditions for employees on individual contracts.

3) Collective bargaining levels

Is TAW governed by collective bargaining at:

a) intersectoral/ national level?b) the sectoral level for TAW?c) company (ie. temporary agency firm) level?

If yes, please provide details of the parties concerned.

TAW is not governed by collective bargaining in Malta.

4) Collective bargaining outcomes

Please provide examples and details of any recent/ significant collective agreements governing TAW at the levels referred to in question 3.

This question is not applicable to Malta.

5) Are there any examples of sector- or company-level collective agreements in other sectors that restrict, permit or otherwise regulate the use of TAW within their domain?

No examples were found.

6) Please provide any data concerning:

a) trade union density for agency workers b) the coverage of collective bargaining within the sector.

TAW does not feature in any section of the two large general unions. Neither is there any union registered in the name of TAW. Thus, one can neither speak of density nor of coverage of collective bargaining.

Section 4. Employment and working conditions of TA workers

1) Please provide the most recent data (averages) on TAW employment

a) longevity of TAW employment, i.e. how long workers remain employed

- in the sector?

- with a particular agency?

b) duration of TAW placements, i.e. i.e. the length of assignment in a user company.

There are no statistics about TAW in Malta. However, some local employment agencies, in response to a brief questionnaire emailed to them, confirmed that they had temporary workers working with them between one week and three years or more. Local agencies would not employ persons for more than four years, as otherwise, it would become indefinite. A particular agency stated that the average duration of TAW placements range between 3 and 6 months. The contract with the agency normally terminates when the contract between the agency and the user company ends.

2) Please provide any evidence from official, academic and social partner sources concerning:

a) the reasons for user companies’ usage of TAW, including any differences by sector, occupation, firm size etc.b) reasons for workers participation in the sector and levels of satisfaction, including any differences by age, sex, education etc.

No quantitative sources of data exist. Anecdotal evidence from employment agencies reveal that long marriage or pregnancy leave, long sick leave and urgent work are among the most common reasons for companies’ usage of TAW for secretarial duties. A particular employment agency stated that its temporary workers, who tend to be women often over 40 years old, would be interested in the job to have an extra source of income, at times until they find a full-time job. Many of these employees are particularly pleased with the flexibility of temporary employments.

On the other hand, another employment agency servicing foreign companies stated that its services are used for jobs which do not warrant the flying in of foreign personnel. Maltese workers, usually males over 25 years old, would be interested in such jobs for the high remuneration.

3) In practice, which rules and procedures may apply to temporary-agency workers in contrast to other workers in the user company?

While no quantitative data exists, it appears that temporary agency workers might often be suffering from inferior working conditions. These include, among others, unpaid leave and the inability to participate in training.

Section 5. The extent and composition of TAW.

1) For 2004 and 2007, please state

a) the number of agency workers b) total revenues of the TAW sector

No statistics are available about TAW in Malta. A one-off news release by the National Statistics Office (NSO, No: 92/2005) about “Temporary Labour Contracts” showed that in 2004, only 3.6% of the working population held temporary jobs. The percentage of TAW was probably considerably smaller than that, as many persons enter temporary contracts without using intermediaries. While more recent data has not been made public, it is likely that the percentage has not changed significantly since 2004. Anecdotal evidence from employment agencies suggests that in the secretarial sector, there might have been a decrease in the employment of temporary workers, especially due to increasing flexibility in full- and part-time employment. On the other hand, some employers might be recruiting more TAWs for higher level jobs.

2) What proportion of the TAW workforce is currently

a) male/ female?b) full/part time?c) young (<c. 25) or older (>c. 50) workers?

No quantitative data about the TAW workforce exists. However, the above-mentioned NSO news release about temporary contracts could be used as an indication of the situation with regards to TAW. In 2004, there were 2,868 male workers (amounting to 2.8% of the male working population) and 2,524 female workers (amounting to 5.6% of the female working population) in temporary employment. 76% of all those in temporary jobs in 2004 were working on a part-time basis. Whereas the average age of persons in permanent jobs was 38 years, the average age of workers in temporary jobs was 30 years.

3) Has there been any changes to the TAW sector in terms of

a) concentration, i.e. proportion of employees or turnover accounted for by the largest firms?b) internationalisation, i.e. number/significance of multinational TAW firms?

While no data about concentration exists, it must be very small. No multinational TAW firms have yet opened offices in Malta. They are discouraged by the lack of TAW legislation.

4) What is your evaluation of the availability and quality of statistical data concerning TAW in your country?

As stated earlier, there is no statistical data about TAW in Malta. The National Statistics Office (NSO), Malta’s primary source of statistical data, does not gather such data, probably due to the insignificant size of the phenomenon in Malta.

Commentary by the NC

Various factors block temping from expanding in Malta. The Maltese government has not been sufficiently proactive with regards to TAW and, to-date, there is no legislative framework ensuring that temping is carried out in a fair manner. Employment agencies fear legal suits due to the lack of legal clarity about the issue. The government must also find new ways of reducing the disincentive that relatively high unemployment benefits have over the low skilled persons from searching for employment

Some trade unions tend to speak about TAW in disparaging terms, which may be increasing the distrust of potential employees to this type of employment. Besides, TAW goes against the cultural mentality of the Maltese population who place considerable value on job security. On the other hand, employers’ associations, especially the MEA, insist that the facilitation of TAW can go a long way to decrease the labour market friction arising from the structural changes that the country’s economy is passing through. Despite this, some employment agencies said that a main reason for the low profile of TAW is that employers are not keen on paying for employment services. While social partners have not been vocal with regards to the EU-level regulation of TAW, employers’ associations tend to be more enthusiastic about it than trade unions.

Manwel Debono, Centre for Labour Studies

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