Port work in Malta: A closed shop

It’s not uncommon for people to follow in their parents’ footsteps when choosing a career. The children of lawyers often go down the legal road, as do the children of doctors and surgeons. But what if a young, aspiring lawyer could simply inherit their parent’s warrant? What if there could only be a limited number of doctors in the country, and only medical students with a parent in the business can get their foot in the door?

This is the system used to recruit port workers in Malta. It is a controversial quota system that sees port workers able to pass on their licence to family members when they choose to stop working in the trade.

Now, the European Commission has referred Malta to the Court of Justice of the European Union over this system because it restricts people from becoming port workers. Specifically, Brussels claims that Malta is violating provisions of the Treaty of the EU by adopting a system that inhibits the free movement of workers, freedom of establishment and the freedom to provide services.

Licence inheritance: A history

Port work is an old trade, and in Malta, port worker employment is regulated by an archaic ordinance from 1966, although it was last updated in 2009.

According to the ordinance, a port worker is someone employed to handle cargo when loading or unloading from a ship to any place on shore or offshore. Only people listed in the Port Workers Register can do this work.

This inheritance practice was scrapped in 2007, as during Malta’s accession to the EU, the country was granted a derogation to phase out the practice as it went contrary to EU legal practices.

But in a 2017 U-turn, the government had unilaterally reintroduced the practice, passing Legal Notice 135 of 2017. Under that legal notice, port workers who before the 10 June 1975 were licensed to work as general cargo stevedores, lightermen or in the port labourers section, were authorised to be replaced by their son, daughter, brother or sister.

The amendment to the Port Workers Regulations also established that port workers who had been in possession of such a licence on 23 October 1992, or during the period between October 2004 and October 2017, were also eligible to be replaced by their children.

A closed shop

Companies can hire among the hundreds of port workers listed in the Port Workers Register but if those workers do not meet the employers’ requirements, the companies must hire among the relatives of these port workers. Only if the relatives do not meet the requirements can the employers choose their staff freely.

This has created a system whereby some 400 licensed port workers enjoy exceptional working conditions and can sub-contract the work they’re supposed to be doing to other workers. These workers are self-employed, do not enjoy leave benefits, and are assigned work on a day-to-day basis usually as drivers or in just one particular port.

A former worker who was hired under this system spoke to MaltaToday about his experience working at the Malta Freeport. While he never had a prestigious port worker licence, he was sub-contracted by someone who carries out the same work.

“I eventually left that work because it was not worth it for me. I was working as a full-time employee at the Malta Freeport but without the benefits,” he said.

A port workers’ monopoly

With high barriers of entry, the port worker trade is considered a closed shop. What makes the trade even more lucrative for those with a licence is that they enjoy a monopoly on all port work in Malta.

There are many cogs in the freeport machine, but only a port worker can board a vessel and handle cargo. A shipping agent cannot hire its own employees to do the job, regardless of whether they are fit and able to do it.

A logistics executive explained to MaltaToday that this monopoly system is making imports far more expensive than they have to be.

“When comparing Malta to other countries, the Malta Freeport is very expensive,” he said. “Why does it have to be a closed shop?”

He also pointed out that port worker charges are regulated by parliament, instead of being dictated by the free hand of an open market.

Another executive with years in the industry said that shipping agents are not directly affected by this system because they only deal with Malta Freeport Terminals, the company that runs the transhipment hub in Birżebbuġa.

“At the end of the day, the sea freight transport industry has evolved so much. Cargo used to come in sacks that would have to be carried on the shoulders of port workers. Now, the port worker just has to go on board and unlash the cargo. They just support the process,” he said.

Still, the system is not perfect and some things can be tweaked. “We all know the effects a monopoly has on a system,” he said. “It restricts people with experience from entering the market. That is bad in and of itself.”

Government defends the system

When the European Commission announced its court action against the government, Transport Minister Chris Bonett defended the system outright.

He said the government will defend the law wholeheartedly in the interest of port workers and their families.

In a comment to MaltaToday, a spokesperson for the prime minister said he has mobilised the full support of the government, including a legal and technical team, to protect this scheme.

“The prime minister remains fully committed to protect the rights and livelihoods of Maltese port workers, as he has consistently done throughout these last years while serving as their legal consultant, then as Member of Parliament, and now as head of the country’s executive.”

Prime Minister Robert Abela once served as the legal representative of the Malta Dockers Union. He followed in the footsteps of his father, George Abela, who had represented port workers in the port reform of June 2007.

Casual workers challenge the system

A group of casual port workers had filed court proceedings against the Ministry for Transport, the Malta Dockers Union and the State Advocate, contesting what they described as blatant discrimination.

They claimed that despite performing similar duties to licensed port workers, they received inferior pay and conditions.

Moreover, they claimed that the 2017 legal notice further discriminated against them, leading to their resignations and significant damages.

The defendants refuted the claims, arguing issues of jurisdiction, lack of discrimination and that the plaintiffs were never employees of the union nor were they promised licensed positions, thus suffering no damages.

In April, the court rejected the claims, finding no entitlement to damages and that the legal notice being challenged did not affect their eligibility for licensed positions and that the court lacked the jurisdiction to declare the legal notice void based on its incompatibility with EU law.