Working conditions and social dialogue — Malta

  • Observatory: EurWORK
  • Topic:
  • Published on: 02 April 2008



About
Country:
Malta
Author:
Manwel Debono and Christine Farrugia
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Although in Malta, research on the relationship between social dialogue and working conditions is very scant, it has been a topical issue in the ongoing debate related to the labour market. Institutionally, the mechanisms of social dialogue at national level are all in place and all functioning. The Employment Relations Board, the Malta Council for Economic and Social Development and the Occupational Health and Safety Authority are three main tripartite social dialogue institutions which deal with working conditions. By and large, the social partners, although on various occasions have expressed strong reservations about the operations of this mechanism, are aware of the need of social dialogue. Their criticism is directed at improving the effectiveness of the mechanism rather than dismantling it.

A. Mapping of existing research and administrative reports

1. Surveys

Present a summary of the survey(s), its findings and methodology, including any caveats about the research

Present, where relevant, the exact wording of the questions that address the relationship between working conditions and social dialogue

This section could also include secondary analyses based on survey data

Is there a predominance of cases or more information available in certain sectors? Are any particular issues emerging? Has any monitoring or evaluation been carried out?

There has not been any relevant research work which identifies or analyses the relationship between working conditions and social dialogue. When contacted, the social partners (including both employers associations and trade unions), and other important actors such as the Malta Council for Economic and Social Development (MCESD), the Employment Relations Board (ERB), the Occupational Health and Safety Authority (OHSA), the Department of Industrial and Employment Relations (DIER), all stated that they have not carried out such research and are not aware of any empirical study related to this issue.

2. Qualitative research

This section could include case studies and specific research work

Present a summary of the research, its findings and methodology, including any caveats about the research

Is there a predominance of cases or more information available in certain sectors? Are any particular issues emerging? Has any monitoring or evaluation been carried out?

As with surveys, qualitative research is also missing in this field of studies.

3. Administrative reports

Public reports, such as reports from the health and safety authority or labour inspectorate, including reports drawn up by consultancy firms made on demand and financed by public authorities may be a relevant source of information on the relationship between working conditions and social dialogue

Do reports from Labour Inspectorate / Health and Safety Authorities exist where the absence of dialogue between the two sides of industry on OHS matters is mentioned? (present the findings briefly)

Is there predominance in a certain sector?

When so, mention the five most quoted sectors.

The role of Labour Inspectorate in an advice / information role to get the social dialogue going whether establishment-specific or not.

No such reports from the Occupational Health and Safety Authority (OHSA) or the Department of Industrial and Employment Relations (DIER) exist.

Only one report was found which deals with the relationship between working conditions and social dialogue. This report, entitled ‘Trends in Collective Bargaining in Malta: 1998 – 2003’ by Montebello (2003), was commissioned by the Centre for Labour Studies, formerly named Workers’ Participation Development Centre, at the University of Malta (The report is not online). The report was supported by the DIER, within the Ministry for Social Policy. It aimed to explore the integration of issues related to the transposition of the provisions of EU directives concerning employment and social policy in collective agreements.

The first part of the report presented an overview of the local labour market to set the background to the research, including literature regarding trade union membership and bargaining coverage. This was followed by an analysis of the implications of EU directives by presenting information relating to the social policy areas covered by EU, namely health and safety at work, labour law and equality of treatment.

The research project was based on two sets of data. The first set included a detailed analysis of data deriving from 80 collective agreements, obtained from 46 different organisations, covering the period between 1996 and 2003. The second set of data was obtained from semi-structured interviews conducted with an undisclosed number of section secretaries of the General Workers Union (GWU) and the Union of United Workers (Union Haddiema Maghqudin, UHM) concerned with private sector employees, and a sample of 20 employers and human resource managers. No further details about the sample were given in the report.

The interviews posed questions regarding the representation at the negotiation tables, the level of importance given to several issues (wages, health and safety, and different types of leave) in collective agreements, the functioning of Health and Safety Committees, the duration of and obstacles normally encountered in the negotiation process, and the utility of collective agreements in the light of the Employment and Industrial Relations Act (EIRA, 2002).

This report pointed out that both trade unions and employers associations agree on the validity of collective agreements, which are viewed as crucial in order to structure working conditions. This report describes collective agreements in unionised workplaces as the ‘undisputed bible whereby conditions of work are spelt out for all to follow.’

The assessment of the specific collective agreements revealed that apart from the critical issues of wages and salaries, the main item of discussion in collective bargaining is special leave, including maternity leave, adoption leave, birth leave, marriage leave, paid leave for jury service and unpaid parental leave. Several companies were found to formulate specific polices together with unions on various types of leave which go beyond Maltese laws. For example, a third of the surveyed companies granted Trade Union Business Leave while a fourth had retirement gratuity leave and educational leave.

73% of the interviewed human resource managers stated that they give a high level of importance to Health and Safety in collective bargaining, indicating that they are conscious of the consequences of injuries sustained by employees. However, there does not appear to be sufficient commitment by management and employees towards effective health and safety policies. The interviews indicated that health and safety committees envisaged in collective agreements do not function properly. While 53% of the respondents stated that the health and safety committees within their companies hold meetings on a monthly or bi-monthly basis, the other 47% stated that their committees convene “irregularly”, “very rarely”, “ad-hoc” or “never”. The report states that the outcomes of these meetings “were considered to be of a trivial nature”, leading to the conclusion that “OHS provision in collective bargaining is, contrary to first impressions, not generally being catered for properly”.

The report concludes that “only a couple of companies have been leaders in introducing above minimum legal requirements in aspects of working conditions such as maternity leave and adoption leave”. In general, organisations appear not to have gone beyond the basic legal requirements.

Is the gender aspect taken up in OHS, is it taken up in the OHS social dialogue, who puts it on the agenda and what is its outcome, if any?

The social dialogue relating to occupational health and safety does not delve into gender issues. Indeed, the topic of gender is scantily mentioned in the annual reports of the OHSA. In July 2007, the GWU presented a research project entitled “Health and safety representatives at the workplace” (Ir-rapprezentanti tas-Sahha u Sigurta’ fuq il-post tax-xoghol). The project (which is not online) was based on data collected from a questionnaire that was sent to an undisclosed number of randomly chosen health and safety representatives who returned the completed questionnaire by mail. The results revealed that only 4.3% of the health and safety representatives are females. Such lack of female representation does not help to increase the awareness of gender aspects of health and safety. The project covered issues including the procedures through which health and safety representatives are elected; the way these representatives obtain the required information to carry out their duties; the training they receive; and the difficulties they face in relation to their role.

B. Actual examples of social dialogue influencing working conditions

4. Examples of social dialogue

The secretary general of the UHM, the second largest trade union in Malta, considers the enactment of the employment law, the Employment and Industrial Relations Act (EIRA, 2002), as a successful case of social dialogue which occurred at a national level. By and large, in spite of many hiccups over issues such as the one about sympathy strikes, a consensual ethic seems to have prevailed during the long drawn out discussions on the new industrial relations act. Following approval by the social partners, after a series of talks and discussions, EIRA was finally enacted in December 2002.

This Act overhauled features of the former Conditions and Employment Regulation Act (CERA 1952) and upgraded features in the former Industrial Relations Act (IRA 1976). Some of the innovations introduced in this Act were the replacement of the former Board and various Wages Councils by a more independent and representative Employment Relations Board (ERB) to recommend both national and sectoral Regulations Orders. The setting up of this board which is tripartite in structure constitutes another mechanism of social dialogue at national level. EIRA also makes explicit reference to collective agreements as the basic manner of regulating conditions of employment at enterprise level and the recognition of full time employees with reduced hours. Moreover the Directives in the EU Social Policy regime dealing with parental and maternity leave, the organisation of working time, part time employment, protection against discrimination were all transposed through legal notices and incorporated in the legislation emanating from this Act.

The lengthy process leading to the enactment of this law, which consisted of discussions, writing reports and organising seminars over a period of about eight years. The government with representatives of different ministries including the Ministry for Social Policy and the Ministry of Finance; and all major social partners consisting of representatives of the General Workers Union (GWU), the Union of United Workers (Union Haddiema Maghqudin, UHM), the Confederation of Malta Trade Unions (CMTU), the Malta Employers Association (MEA), the Malta Chamber of Commerce and Enterprise (COC), the Malta Federation of Industry (FOI), the Malta Hotels and Restaurants Association (MHRA) and the General Retailers and Traders Union (GRTU), were actors in the process. The process of social dialogue proved to be effective as all actors were satisfied with the negotiations and welcomed the new employment law.

An unsuccessful attempt to enhance the mechanism of social dialogue was the failed attempt to sign a social pact. Throughout the year 2004 there was an ongoing debate among the social partners about the need of a concerted effort to deal with the prevailing economic situation. Early in the year, the GWU called for the setting up of a task force to address the issue of unemployment. In March the UHM issued a proposal ‘A Social Pact for Malta’. The aim of this pact was “to create the necessary framework to bring all the social partners to agree on a common set of policies and actions necessary to promote sustainable social and economic growth leading to renewed job opportunities and social justice”.

Two months later the MEA presented its own social pact proposals with the aim of restoring Malta’ competitiveness and increasing the activity in the labour market. This complemented a memorandum issued by the FOI before the 2004 budget presentation. The points raised by each organisation and the proposals made, though not totally convergent, addressed the same issues and were critical of the status quo. The government on its part declared its intentions to address those issues which were likely to undermine long term interests.

Judging by the statements that were being made in the pubic debates, hopes ran high that such a social pact would be signed by the end of 2004. However this was not to be. Following a number of sittings at MCESD and protracted discussions, the social partners failed to reach an agreement. The UHM secretary general mentioned the social pact that it had originally put forward, and that was discussed by the government and the social partners in 2004/2005, as an unsuccessful example of social dialogue. In November 2004, the chair of MCESD, the country’s highest national tripartite forum, presented a draft social pact to be debated by the representatives of the social partners. The proposed pact aimed at generating better work opportunities and focused on stimulating economic activity and the development of human capital. Some of the proposed measures focused on providing quality child care, reforming the unemployment benefit system so as to encourage the registered unemployed to find work, eliminating abuse of invalidity benefits, encouraging private sector employers to contribute towards retraining of employees, and making part-time tax benefits available for both members of a married couple in the case of a joint tax computation.

Lengthy sessions were held within the MCESD, as the social partners could not agree on several points. The most vociferous opponent to the government’s proposals was the GWU, Malta’s largest trade union. It maintained that while workers were being asked to make many sacrifices the employers were not offering any concessions to counterweight the workers’ sacrifices. The union was particularly adamant against the proposed forfeiture of public holidays falling on weekends, the suggestion to link wage agreements to the GDP, and the proposed four-year duration of the pact. Eventually no agreement was reached. The GWU, Malta’s largest general union, pulled out of the discussions since it felt that debates were not leading to any compromises (MT0501101N). The CMTU and the UHM also emphasised their disagreements regarding some measures, in particular those relating to the forfeiture of public holidays falling on weekends and to the increases in bonus form rather than being integrated in the employees’ basic wages. However, they declared that they were satisfied with a number of proposals that were beneficial to employees, such as an increase in investment for training by employers, a reduction in tax evasion and a reduction of unnecessary bureaucracy. The employers associations received the draft social policy very favourably and encouraged the government to take the necessary actions in order to enhance the country’s economic situation. The FOI stated that “it was a shame that the act, which was aimed at boosting competitiveness, had not been approved” (The Malta Independent). The same view was expressed by the presidents of MHRA and COC (The Malta Independent). The latter went a far as stating that the private sector representatives were in favour of the social pact proposals in their entirety (The Malta Independent). Despite this, social partners were unable to reconcile their divergences and reach a consensus.

A deputy secretary general of the GWU was hesitant to mention any particular story that could be described as a successful example of social dialogue influencing working conditions. This is because he considers every collective agreement as a successful story. In each collective agreement, where the organisation’s management, the secretary of the involved union section and the shop stewards are present, the best possible working conditions for its members are secured, depending of course on the prevailing circumstances. For example, the GWU is the official union representing employees at the Bortex firm, an organisation that has been passing from diverse restructuring exercises during the last decade. In successive collective agreements, the GWU made sure to adopt new measures to safeguard the employees. According to the union official, when the organisation’s management recognises the trade union as a body that has in its best interest the organisation and its employees a win-win situation can be achieved. Although recently, Bortex had to make redundant many of its employees due to a relocation exercise, the GWU was successful in negotiating a good remuneration package for its laid off workers.

The GWU deputy secretary general mentioned the issue of public holidays falling on weekends as an unsuccessful example of social dialogue. In 2005, in a bid to enhance Malta’s competitiveness, the government amended the law whereby public holidays falling on weekends would no longer be added to employees’ vacation leave (MT0504102N). The GWU accused the government of carrying out these changes without any consultation with the unions. The International Labour Organisation (ILO) declared that the government did not act within the parameters of established standards in dealing with this issue. It instructed “the Government to amend section 6 of the National Holidays and Other Public Holidays Act so as to ensure that this provision: (i) does not render automatically null and void any provisions in existing collective agreements which grant workers the right to recover public holidays falling on a Saturday or Sunday; and (ii) does not preclude voluntary negotiations in the future over the issue of granting workers the right to recover national or public holidays which fall on a Saturday or Sunday on the basis of a collective agreement” (link). This led the government to refer the issue to the Employment Relations Board (ERB), a tripartite consultative body set up by government in order to discuss matters relating to labour legislation. However, the matter was once again not resolved and the government did not amend the law, allegedly going against the ILO’s conventions. On their part, employers associations including the MEA approved and supported government’s action to increase the annual working days by reducing the number of public holidays.

The MEA through its spokesperson, the secretary general, argues that working conditions can only improve if the economy registers growth. Social dialogue should be directed primarily towards this aim. Economic growth depends on maintaining a level of competitiveness. The association is not against high wages in those industries which can afford such high wage bills. Nevertheless, to enhance the competitiveness of the economy, the association feels that unions have to make compromises as regards wage increases, even if possible agreeing to a wage freeze. Spokespersons for FOI maintain the mandatory Cost of Living Allowance, the mainstay of social dialogue, is one of the rigidities in the labour market which is creating a barrier to economic growth. Social dialogue should aim at reaching a balance. According to the FOI, these rigidities may inhibit rather than bring about the ideal balance.

5. Social partner views

In Malta there are three main tripartite social dialogue institutions, namely the ERB, the OHSA and the MCESD. The ERB is a tripartite consultative body set up by government under the EIRA (2002). The board comprises four representatives, four employees’ representatives and four members appointed by the government. The board has to be consulted before the publication of any employment-related legal notices. Hence, the social partners, through the ERB, have a direct affect on Maltese legislation.

The OHSA aims to verify that the health and safety protection standards set out by the Act XX vii of 2002 are upheld. The authority consists of nine members including two members representing the interest of workers and another two representing the interest of employers and five government officials. The OHSA’s activities are divided into five major areas. These are: the construction, quarrying and mineral extraction; machinery, equipment, plant and installation including Control of Major Accidents Hazards (COMAH); chemical and biological agents; radiation protection and general and accident investigation.

The MCESD, set up in 1988 and given legal status by an Act of Parliament in 2001, is a legal consultative and advisory body to the government. The council provides a forum for consultation on economic and social development issues for social partners.

During the last years, these three bodies were instrumental in bringing significant changes at both enterprise and national level. According to the GWU and the UHM, the largest two unions in Malta, social dialogue often managed to influence positively the working conditions in various Maltese employment sectors. In the past years the major social partners have given useful contributions towards the working conditions through their participation in the discussions leading to the annual general budget. Despite such consultation, several social partners still aspire for a higher quality and level of discussion.

The deputy secretary general of the GWU regards the fact that negotiations and collective agreements occur at enterprise level rather than at sectoral level, as a main strength of the social dialogue system in Malta with regards to working conditions. Collective agreements in Malta can be described as decentralised. This gives the opportunity to take into account each firm’s specific needs. Indeed, the only standing sectoral agreement in Malta, concerning car importers, was recently terminated. The union’s deputy secretary general emphasised that the GWU strives to lobby and drive its agenda wherever possible, directly with organisations management, bilaterally with the employers associations and at official places such as the ERB, the MCESD, etc. According to the GWU, problems mostly arise in organisations where employees are not represented by unions. The deputy secretary general stated that the union faces big obstacles when they try to make way into such organisations.

The deputy secretary general GWU expressed his concern about problems related to social dialogue in organisations in which the government is a shareholder, such as Air Malta. According to him, it is very difficult to carry out proper social dialogue in such organisations, as politicians at times have too much power over the organisations’ management. There have been cases where agreements reached after fruitful discussions with the HR manager were rejected by the minister in charge. The deputy secretary general of the GWU also expressed his dissatisfaction with the present situation of the MCESD, as it is not meeting on a regular basis. According to the union official, since the resignation of the council’s chairman, the MCESD has not yet started to function properly.

According to the UHM general secretary, the main strength of the social dialogue system in Malta is the ongoing dialogue between employers associations, the government and the unions representing the employees. At the other end of the spectrum, the main weakness in the country’s social dialogue process is that at various instances the country stops short at taking difficult decision that may result in major improvements. Hence, at times, social dialogue is viewed by social partners as a ‘waste of time’ since it does not lead to any concrete results.

According to the MEA the main fault line running through the mechanism of social dialogue is trust. In a scenario where actors who, in spite of their diverging interests, have to reach a level of consensus, lack of trust becomes very critical. FOI states that the time has come for the MCESD, the main institution of social dialogue at national level, to go beyond being a glorified talking shop and acting as a shock absorber at times of crisis. The FOI would like the role of MCESD to be an institutional mover and shaker, which identifies opportunities for enhanced economic development through a modernised industrial climate.

Names of people contacted available of request:

References:

Baldacchino, G., Rizzo, S., & Zammit, E. (2003). Evolving Industrial Relations in Malta. Malta: Agenda & CLS.

L-Orizzont, Website: http://www.l-orizzont.com/

Malta Employers Association, Website: http://www.maltaemployers.com

Malta Federation of Industry, Website: http://www.foi.org.mt

Montebello J. (2003). Trends in Collective Bargaining in Malta: 1998-2003. Malta: WPDC/DIER.

The Malta Independent, Website: http://www.independent.com.mt/

The Times of Malta, Website: http://www.timesofmalta.com

Manwel Debono and Christine Farrugia, Centre for Labour Studies

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