Precarious work needs full-time solution

The recent events leading to the arrest of a director of Leisure Clothing over exploitative abuse of workers has lifted the lid on one of contemporary Malta’s less palatable realities.

A number of foreign employees have testified that they earned only €600 for eight months of work, during which they were made to work 14-hour shifts with only one 75-minute break. The details were shocking, yet they did not come as a surprise to the many social workers and trade union officials who are familiar with the soft white social underbelly of Malta’s employment sector. These are of the view that Leisure Clothing may represent but the tip of an iceberg where rampant exploitation of (mostly foreign) workers is concerned. 

Even without such dire cases, it remains a fact that thousands of workers are currently in precarious employment in Malta, which may undermine other indicators of positive economic performance.

Statistics show that part-time employment as a primary job has increased by 7% under the Labour administration. In the last three years there has been a consistent increase in women taking up part-time jobs, primarily in sectors such as accommodation, wholesale and retail, administrative services, education and health. 

In 2013, the average increase in part-time jobs as a primary source of income stood at 5.44%, while the increase between May-2013 and May 2014 was 6.2%. This indicates a greater prevalence of part-time uptake by the private sector, which registered a 4,000+ increase in jobs over the same time period.

But in some cases, privately employed workers may find themselves subcontracted to work for government agencies. Prime Minister Joseph Muscat himself revealed earlier this year that 2,700 such workers had been indirectly employed by the government under precarious conditions. Some had been found to earn a pay of between €4.14 and €4.25 per hour, with overtime paid by the hour and their contract renewed on a month-by-month basis. Security workers were even asked to pay for their own licence, when this should be paid by the employer.

The problem is considerably harder to detect – and its consequences often considerably more serious – in the case of illegal employment. A scramble for cheap labour can only result in meagre wages which will decrease over time, as new categories of vulnerable workers emerge and employers compete in a race for the bottom. The resulting insecurity of employment also leaves this category of worker particularly vulnerable to a future without pensions, health insurance, and unemployment benefits.

Unions have variously condemned this practice, but in effective terms they cannot do very much about it. It is all too often the case that foreign workers may fear being deported if they file a report, since they do not hold necessary work permits. Moreover, leading union representatives have been on the receiving end of threats when highlighting the plight of foreign workers, especially in the construction industry: which is a powerful lobby in Malta, with a particularly strong hold on both parties in parliament.

Yet there is plenty that government can and should do to address the root cause of the issue. Precarious work is the result of poor employment practices condoned by inadequate legislation. The onus is therefore on government to strengthen enforcement and enact the necessary laws.

In fact a report by the European Commission against Racism and Intolerance (ECRI) last year warned that “refugees, persons granted international protection and immigrants continue to be employed in the informal economy and are often exploited by their employers. Not only are their wages far lower than the national minimum wage, but also health and safety standards are often disregarded”.

Among its findings was that local companies sometimes act as though they are above the law when employing foreigners who might be desperate, vulnerable or unaware of their rights. The ECI made a number of recommendations for action that could be taken; Muscat separately promised a comprehensive action plan against precarious employment last May. Yet we have heard nothing about this plan in the last 18 months. 

Action needs to be taken at both local (government) and international (EU) level, with a view to ensuring that all workers are entitled to benefit from the same basic rights and social conditions stipulated by law. So far, government’s efforts in this direction have been limited to qualifying the mandatory criteria which must be observed by contractors who participate in public procurement procedures. But as pointed out by the European Labour Law Network, there as yet exists no legal definition of ‘precarious employment’; which creates difficulties for law enforcement.

Clearly, more effective legal deterrents could be put in place, where companies found guilty of breaching employment laws are blacklisted and clear, effective sanctions undertaken in cases of abuse. Separate strategies may include an increase in the minimum wage, and harmonisation of employment laws across the European Union.

Moreover, the present loophole whereby employers hide behind the excuse of ‘sub-contracting’ must be closed once and for all. Companies are legally bound to ensure decent working conditions for all their employees, including those sub-contracted from other companies. 

It remains to be seen whether Monday’s budget will go full-time with its commitment to tackle precarious employment.