Most businesses holding on to staff despite 'ineffective' government COVID-19 aid, study finds

Over 90% of Malta's businesses have not made any redundancies connected with the COVID-19 situation, a Malta Employers' Association study has found.

The study indicated that, while only 18% of companies consider the government schemes to clearly be effective, only a minority of businesses translated this into laying people off.

The MEA said that, in a minority of cases, this could be because some businesses might have not been affected by COVID-19.

For the vasty majority of employers, however, companies were using their own resources to postpone redundancies in the interest of their business and the well-being of employees, the Association said.

Of concern is also the fact that 31% of companies reported there would be increased redundancies should the situation remain unchanged beyond May, and almost 45% said they were uncertain on the matter.

(Source: MEA survey)

The study, published on Tuesday, surveyed 346 companies in the private sector, with a spread across all economic areas and company sizes, employing around 40,000 persons.

Vast majority of companies haven't let workers go

The vast majority - 91% - of companies did not make any COVID-19 redundancies.

For the 9% that made redundancies, just over 82% had made up to 25% of their workforce redundant, while 12% had made half their employees redundant, and 6% had let go of more than three-quarters of their staff.

Despite the low number of employees which dismissed workers, 31.2% of respondents said they expected an increase in redundancies if the coronavirus situation persists beyond the end of May, and 44.5% said they were undecided on the matter. 

Only 24.3% said they did not anticipate letting go of workers should the situation go on past next month.

(Source: MEA survey)

Around 72.% of companies had implemented teleworking measures for some or all of their employees.

Government aid 'ineffective' for relatively high number of companies

The government's coronavirus wage supplement was being used by 52% of companies, with 66% of these businesses falling under the government Annex A (the industries most affected by the crisis). 

However, the largest portion of companies - 38% - said the government's financial schemes were "extremely ineffective" for their company.

Around 15% said the scheme were "moderately effective", 30% said they were "neither effective nor ineffective", 13% said they were "effective", while just 5% found them "extremely effective".

Around 48% of companies did not fall under Annexes A or B.

Relative majority of employees working their full hours

The survey showed that 36% of companies participating in the study had reduced the number of working hours for all their employees, 24% had put in place a reduced working schedule for some employees, and 40% had all their employees working their full hours.

In terms of vacation leave, 38% of companies had enforced pro-rate leave for workers for 2020, 20% had required employees to use all this year's leave entitelement, while 42% had not enforced leave.

When it came to unpaid leave due to insufficient business, 22% of companies had put some workers on leave without payment, 6% had placed all their employees, and 72% did not put any workers on unpaid leave.

Extend aid to more companies - MEA 

Following the study's results, the MEA recommended that the government include more companies under Annexes A and B, such as those which are co-dependent on sectors which have been shut down.

It also proposed more flexibility for the employment of non-EU nationals, schemes for commercial rent, a reduction of VAT rates to kick-start the economy, a government subsidy on bank interest rates on loans and overdrafts, and a reduction in utility bills.