Malta: Latest developments in working life Q4 2019

A discussion on changing the cost of living allowance and the trend of lower trade union density are the main topics of interest in this article. This country update reports on the latest developments in working life in Malta in the fourth quarter of 2019.

Changes to the cost of living allowance

Since 1992, in the annual financial estimates, it has become standard practice to include an annual cost of living allowance (COLA) for all workers. This COLA translates into a mandatory wage increase, based on a retail price index, which is monitored by the social partners. Since its introduction, COLA has been retained by successive governments in spite of pressures from the European Commission to abolish it. The trade unions that have consistently called for its retention have been lobbying for the introduction of the necessary changes in the COLA mechanism, so as to be aligned with the requisites of a post-industrial society. Finance Minister Edward Scicluna stated that the government is willing to discuss with the social partners any changes or alternatives to the COLA mechanism. He further stated that this discussion can be held at the Malta Council for Economic and Social Development (MCESD), which is the tripartite national institution for social dialogue. Union Haddiema Maghqudin (UHM) CEO Josef Vella emphasised the importance of this discussion and said it should focus on the weightings used in the indexation exercise, which he believes need to be reviewed and adjusted accordingly.

Trend of lower trade union density

On 1 November, the Registrar of Trade Union published its annual report on trade union membership for the year running from 1 July 2018 to the end of June 2019. According to the membership figures received from the trade unions, all trade unions registered an increase in membership over the previous year. However, this increase does not match the increase registered in the Maltese labour force. In the second quarter of 2018, the Labour Force Survey reported a workforce of over 231,000. Excluding pensioners, who are included in the membership of trade unions, the 90,253 trade union members represent 39% of the gainful employed. This trend of lower union density suggests that the trade unions are recruiting a very small percentage of the workers who are entering the Maltese labour market. A large proportion of the new entrants in the Maltese labour market are foreign workers. According to the Executive Chair of JobsPlus, which is a public service provider, many foreign workers join the Maltese labour market for a short period. A study conducted by the Central Bank of Malta revealed that the average stay of foreign workers is 3.5 years. ^[1] Due to the transitory nature of their employment, they may not feel the need to join a trade union.

In response to this new reality, the General Workers Union (GWU), in conjunction with the Confederazione Generale Italiana del Lavoro (CGIL), has set up a service to address the needs of Italian workers employed in the Maltese labour market.

• Government of Malta: Report by the Registrar of Trade Unions 2018–2019

Commentary

Resistance by successive governments to retain COLA stems from a tacit belief among the Maltese political parties that this mechanism contributes to a more harmonious industrial relations scenario. Its retention is likely to persist in the near future unless the concept of the living wage becomes a reality. The present reality of the Maltese labour market is the influx of foreign workers. The initiative by the GWU, in agreement with CGIL, to offer its services to the Italian contingent of workers in Malta may serve as a good gesture towards this new occupational category of workers. ^[2] Perhaps this is a sign that the Maltese trade union movement is attempting to respond to the massive impact on employment working conditions brought about by developments in the labour market.