Malta: Latest working life developments – Q2 2016

The debate about whether to increase the minimum wage and social partners’ reactions to proposals to change the composition of the Industrial Tribunal are the main topics of interest in this article. This country update reports on the latest developments in working life in Malta in the second quarter of 2016.

The minimum wage debate

A debate about minimum pay has been sparked by a report, A minimum essential budget for decent living – 2016 (PDF), from Caritas Malta, an organisation that works to relieve poverty and promote social justice. The study reported that the weekly expenses of a family comprising two adults and two children have increased by 10% over the last four years. Caritas thus called for a gradual increase in the minimum wage. This proposal was supported by the trade unions and by poverty campaigners, but was met with scepticism by employer associations.

On the basis of the Caritas report and the annual growth of the Maltese economy, the General Workers Union (GWU) believes now is an opportune time to increase the minimum wage. However, the Malta Chamber of Commerce and the Association of Medium and Small Enterprises (GRTU) believe that such an increase would jeopardise Malta’s economic competitiveness. The Malta Employers’ Association (MEA) expressed its fear that the move would ultimately lead to wage increases to the detriment of economic growth .

The Prime Minister, Joseph Muscat, invited Caritas to present its report to the cabinet of ministers. The Finance Minister, Edward Scicluna, stated that policies to help vulnerable people should focus on the household rather than on minimum pay. He pointed out that the joint income of a household with two adults where each earns the minimum wage would be above the threshold proposed by Caritas. Similarly, the director general of MEA, Joseph Farrugia, stated that the pertinent question was how many individuals on the minimum wage belong to a single-income family with two children. This figure might not be available, but it is known that the proportion of minimum-wage earners who are employed full time (2% of all full-time employees) has declined by 9.7% over the years.

It appears that to assert its social democratic credentials and facing a general election in two years’ time, the government is likely to decide to increase the minimum wage. 

Changes to the Industrial Tribunal

The government has proposed a change to the law on the composition of the Industrial Tribunal. According to a court ruling, the way the tribunal is currently appointed does not guarantee impartiality. The key change proposed is to involve the Employment Relations Board – a tripartite advisory body – in the appointment of the tribunal chairperson. Social partners are not in complete agreement about the proposals.

The Dean of the Faculty of Laws at the University of Malta described the bill as a patchwork exercise aimed at retaining the status quo as far as possible. This view is shared by the Union Haddiema Maghqudin (UHM) and the Confederation of Malta Trade Unions (CMTU). One of the contentious issues is the appointment of the chairperson, whom the UHM states should be a magistrate.

In the meantime, since the tribunal is in abeyance, the number of pending cases is increasing. A spokesperson for the Social Dialogue Ministry said there were currently 577 pending cases.

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