Labour study says female employment increases by 9% if maternity leave is extended

Labour MEP Edward Scicluna revealed that ECB studies have shown that if maternity leave in Malta had to be increased to 20 weeks, Malta’s female participation rate would jump by 9%, with an increase of €50 million in economic activity, and addressing Malta’s already very low female participation rate.

The paper, presented by the Labour think-tank Ideat, is claiming to “allay over-blown fears” by the Malta Business Bureau, which presented a report arguing against the extension of parental leave and supported by Malta’s industrial and employers’ representatives.

The European Parliament is proposing the extension of parental leave up to 20 weeks, but the Maltese government is opposed to the proposal. The current individual right to parental leave of at least three months for male and female workers on the birth or adoption of a child is given by Directive 96/34/EC.

But according to Scicluna, who authored the Labour study on parental leave, “Malta has the opportunity to see a significant jump in its current abysmally-low female labour force participation rate… The economic effects are staggering. Malta’s productive capacity and its fiscal possibilities are clearly curtailed by Malta’s small active-to-inactive population ratio.”

Scicluna argues that the MBB’s estimates on the costs of extending parental leave somewhat created “an upward bias, an understandable precautionary choice for employers in view that at present it is they who are shouldering the cost.”

The MBB report considers that possible economic benefits of these EP proposed legislative changes on the Maltese economy to be relatively marginal: costing €7.5 million worth of value added in a year (0.18% of GDP). Of this, the cost to private business would amount to €5.3 million worth of value added in a year, while two weeks of paternity leave would cost the economy another €4.8 million, of which €3.7 million would be borne by the private sector.

“While the MBB report is somewhat negative on the impact on extending paid maternity/paternity leave, this outlook is not borne out by the experience of other countries, including those which have similar characteristics, such as a preponderance of micro-enterprises,” Scicluna said.

Scicluna also lambasted the MBB’s assumption in calculating the impact on employers by adding wages together with profits. “If that wrong assumption is changed, than half of the figure would be shaved off,” he insisted.

“We have seen that while covering employees while they are on leave was also expressed as a concern by employers in many countries, as has been reported above, the problem is serious only in a small percentage of firms. Nevertheless, to aid employers, the authorities need to introduce incentives to encourage the use of more flexible forms of working arrangements, such as part-time working; job sharing; flexi-time; working a compressed working week; working reduced hours for a limited period; and working from home.”

Scicluna proposed that rather than employers who have women employees on maternity leave who should bear the cost alone, it should be spread among all employers through a specially set-up scheme.

He also lamented that at present Malta did not have any statistics about women who take maternity leave. “In Malta we do statistics about band clubs and village festas, and yet we do not have any statistics on such an important thing such as maternity leave,” the Labour MEP insisted.

Defending the MBB report, Gordon Cordina, the author of the MBB report, claimed that the report was not an anti-maternity leave report.

“However, should we spend that money for maternity leave when we can use them for something which is more useful for the economy?” he asked.

This brought an immediate response from the various women’s organisations present for the forum, including Renee Laiviera from the MCWO and Grace Attard from the NCW.

The audience was mostly made up of trade Union people, with GWU Secretary-General Tony Zarb and President Paul Carachi, UHM Secretary-General Gejtu Vella and Deputy Secretary-General Jesmond Bonello, and FOR.U.M President John Bencini.

Employers’ organisations had been invited by the organisers of the seminar, however only the MBB representative attended for the seminar.

Concluding the seminar, Labour leader Joseph Muscat said that he agreed with the conclusions of Scicluna’s report. “However, I do not want to be the fall guy of the MBB report,” he insisted.

Muscat accused the Government of getting its priorities wrong. “It had no issue with spending €100 million on the new Parliament building, which has few practical purposes,” he lamented.

“With €100 million, we would finance maternity leave for 20 years with all the positive economic outcome,” Muscat insisted.

The Labour leader also accused the Government of being “passive” on the maternity leave and paternity leave, “adopting only what the EU decides”.

“Malta has to be pro-active and introduce addition maternity leave and paternity leave now,” he insisted.

Muscat reiterated the PL’s position in favour of the extension of maternity leave and paternity leave despite the ruckus from industry organisations. “When a Labour Government introduced the vote for women, income tax, vote at 18, children’s allowance, National Insurance, there were those who had complained.

“This is another progressive measure for which the PL will strive to work for,” the Labour leader concluded his speech.