Social dialogue & conflict resolution mechanisms


Social Dialogue and Conflict Resolution Mechanisms: conciliation, mediation, arbitration in Estonia, Hungary, Malta, Poland and Slovenia - Workshop

Prague, 29-31 October 2003

Discussion paper - abstract - Edward Zammit
University of Malta

Conflict resolution mechanisms in Malta

Societal and industrial relations framework for conflict resolution

The experience of conflict in social relations is never far removed from the world of work. This is due to the fragility and precarious balance which characterise work relations, and the interconnectedness between these and the wider areas of social life. The dire consequences of industrial conflict necessitate in all countries the establishment of effective mechanisms for its resolution. This paper focuses on the conflict resolution mechanisms established in Malta, with particular reference to the roles played by the social partners.

Role of the State

The State plays a prominent active mediatory and regulatory role in industrial relations in Malta. This it does through (a) the enactment of appropriate legislation regarding employment relations and conditions of work; (b) the establishment of the Department of Industrial and Employment Relations (DIER) and the Industrial Tribunal; and (c) its role as the major employer, directly responsible for the conditions of work for around 37.8% of the total full-time work force. Since 1993, the system of collective bargaining regarding wages and conditions of work, which had been practised for many previous decades in private sector, was also extended to the public sector.

The Employment and Industrial Relations Act (EIRA)

The main law regulating work relations in Malta is the Employment and Industrial Relations Act (EIRA, 2002). The Act has two main sections: one dealing with individual conditions of employment and the other with collective industrial relations. It provides for the establishment of a tri-partite Employment Relations Board which has a consultative function to government on a wide range of issues concerning labour legislation and the establishment of the national minimum conditions of employment. The Act further provides both for the voluntary and imposed settlement of industrial disputes

Enterprise-level Bargaining

Apart from the basic conditions of work and the national minimum wage established under EIRA, the principal means through which wages and the other working conditions are determined is through bipartite, enterprise based, collective bargaining. There are hundreds of collective agreements through which employees in specific enterprises may receive wages and working conditions above the statutory minima. The main institutions involved in this activity are firmly established in Malta and their roles are enshrined in legislation.

Recognition of a trade union at a particular enterprise is normally based on the membership exceeding fifty per cent of the entire workforce. Recently, however, there is a tendency for particular categories of employees to claim a separate recognition from that of the other workers. There are cases where a union is recognised by an employer and a collective agreement is negotiated even though the union may not enjoy the majority of employee membership. There are also cases where the enterprise management accepted to bargain with a common front formed between two or more unions, none of which individually command a majority, but do so collectively. There is also the tendency for the management of a single enterprise to sign more than one collective agreement on behalf of different categories of employees. This trend has been endorsed by the industrial tribunal for what have been termed as ‘separate bargaining units’.

The terms of a collective agreement normally follow a standard pattern and cover both procedural aspects, relating to dispute resolution and substantive issues, relating to conditions of employment. The standard duration of collective agreements is for successive three year periods.

National-Level Bargaining

In addition to enterprise-level bargaining, there has been a parallel development of national-level bargaining during recent decades. This policy entailed a departure from the divisive policies and the political domination of the previous era and from the informal, ad hoc relations among actors which often predominate in a small scale society. It thus constitutes one of the main instruments for conflict resolution.

The Act establishing the ‘Malta Council for Economic and Social Development…’ (MCESD) became law in 2002. The Council is envisaged as an advisory body to provide a forum for consultation and social dialogue between social partners and, where necessary, with organisations of civil society. It is entrusted with the task of advising government on all issues relating to ‘the sustainable economic and social development of Malta.’

The Act does not exclude the possibility that the council may express its own independent opinions – including those critical of government policies. Such opinions would inevitably carry a lot of weight. Nor does the Act preclude the social partners from negotiating on specific issues - a role which they are traditionally well versed to play and which they assume like second nature. In practice, however, everyone seems to prefer an advisory and consultative role for MCESD. The ultimate political responsibility for any decisions remains firmly in the hands of government while the social partners, after giving advice, remain at liberty to air their individual views in public.

Industrial Conflict

In recent years, apart from a few sporadic and widely publicised disputes in the public sector, Malta has enjoyed an atmosphere of relative industrial stability. This can be attributed to the readiness of the social partners to work together in a highly competitive, international market as well as to the Government’s eagerness to solve industrial relations issues as soon as these emerge. The number of industrial disputes registered with the DIER has fluctuated in the last few years. However, the number of striker days has been following an overall downward trend, as can be seen below:

Strikes and Lost Working Days

Year Strikes Workers involved Days on Strike
1970 26 23,979 148,499
1975 30 5,262 14,136
1980 13 764 5,019
1985 6 975 874
1990 25 3,610 4,487
1995 13 2,877 5,302
1996 7 4,000 16,500
1997 9 3,289 14,652
1998 8 785 1,828
1999 15 4,849 1,261
2000 12 5,000 2,564
2001 14 1,849 2,792
2002 5 678 744

(Source: Department of Industrial and Employment Relations)

The highest number of registered disputes (60%) was over conditions of work. These were followed by disputes over collective agreements (16.6%), over dismissals from work (11.7%) and union recognition issues (3%). It should also be noted that the vast majority of registered industrial disputes do not actually result in strikes. For instance, out of the 70 industrial disputes registered in 1994, only 10 resulted in strikes. It can be argued that a reported loss of international competitiveness, resulting in company closures and job losses, has brought to negotiations in the private sector a sense of realism and moderate wage demands. By contrast, employees in the public sector generally feel insulated from market pressures. They enjoy traditional security of tenure and their wage demands are usually phrased in terms of social justice rather than competitiveness. Furthermore, disputes in the public sector, often get intermingled with political and national issues. As a result, such disputes are usually more intense and passionate than those in the private sector.

Conflict Resolution

EIRA provides for both the voluntary settlement of disputes through mediation and conciliation and for a settlement determined by the Industrial Tribunal. For these purposes, the law authorises the Minister to appoint a Conciliation panel made up of not less than five persons, following consultation with MCESD.

Alternatively, the Minister may entrust the task to the Director of the DIER, which is normally the case. The effectiveness of this course depends heavily on the communication skills, experience, standing, and personal commitment of the Director who normally plays the leading role. During the five year period 1998-2002, 80% of all emerging industrial disputes were referred to conciliation and of these, the success rate of reaching agreement was 78.3%. These trends are shown below:

Year Disputes Conciliations Agreements
1998 72 53 36
1999 92 92 76
2000 103 77 62
2001 103 68 48
2002 116 102 85

(Source: Department of Industrial & Labour Relations)

On the other hand, when a deadlock is reached, the Minister may refer the case to the Industrial Tribunal. This is a special judicial body, established under EIRA, and given exclusive jurisdiction over employment and industrial relations conflicts.

The tribunal is chaired by a member of a panel appointed by the prime minister, following consultation with MCESD. The tribunal also includes two other members, chosen from two other panels representing in turn the interests of both employers and employees. Both panels are also appointed through MCESD. Nevertheless, in cases other than those dealing with industrial relations -such as those of unfair dismissal- the tribunal consists of the chairperson alone. The Tribunal’s decision is binding on all parties and may not be appealed against for a period of at least one year. In giving its award, the tribunal is expected to take into account the social policies of the Government, the requirements of any national development plan and other economic policies of the Government.

Conclusion

Experience has shown that the existing mechanisms for the resolution of industrial conflict in Malta are largely effective. This particularly applies to the private sector. Nevertheless, an even more effective form of dealing with conflict would be to prevent its emergence through proactive mechanisms. These are particularly required for the resolution of industrial disputes at the national level. Given the close relationship between conflict at work and in society at large, the role of the institutions for social dialogue stretches far beyond the immediate issues on the discussion tabl

Admittedly there are significant difficulties obstructing the development of adequate social dialogue in Malta. The political divisions, social allegiances, personality differences and patronage networks which dominate Maltese society are also reflected in the relationships among the social partners. Nevertheless, there are also some positive signs of a gradual, emerging realisation that the politics of confrontation are ultimately self-defeating and that much is to be gained through social dialogue. A positive indication of the new approach is found in the prolonged, pre-budget consultations which are now carried out annually among the social partners at the MCESD. Most of the social partners express their satisfaction that even if there are bitter disagreements about the right solutions, at least they are managing to hold serious discussions and identify some of the existing problems.

Such experiences clearly indicate that beneath the public rhetoric, and despite the existing difficulties and outside pressures, there is a gradual development of a positive relationship among the social partners which may eventually blossom into a mature social dialogue. This is the best guarantee for the resolution of industrial and social conflicts in future.

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