Businesses want say in public sector wage talks

In its recommendations for the upcoming budget, the Malta Employers Association also called on the government to rein in direct orders and positions of trust

The 2017 public sector collective agreement being signed by Mario Cutajar, the head of the civil service. The MEA claims collective bargaining in the public sector was having negative repercussions on the private sector
The 2017 public sector collective agreement being signed by Mario Cutajar, the head of the civil service. The MEA claims collective bargaining in the public sector was having negative repercussions on the private sector

The Malta Employers Association (MEA) has proposed that representatives from the private sector be involved in collective bargaining in the public sector to ensure that “repercussions on the private sector are anticipated and catered for”.

“Alternatively, any package negotiated in the public sector should be discussed with private sector representatives before being given the green light,” the MEA said in its recommendations to the government ahead of the upcoming budget.

The MEA said the increase in public sector employment was creating pressures on the private sector, adding that improved collective bargaining in the public sector was resulting in a “drain of employees” from the private sector.

The association pointed to a situation which it said had developed with teachers over the last year, where an agreement on a new collective agreement for public sector teachers, has resulted in pressures on independent schools, who must pay their teachers more in order to keep them.

“Independent schools can only match the government package by increasing fees substantially,” the MEA said. “Otherwise many teachers in these schools will apply for positions in the government schools. Increasing fees will result in a drop in the school population and threaten their existence.”

It said that talks between independent schools and the MUT were currently at a standstill, while urging the government to “allocate more funds to assist this sector”.  

Moreover, it said that “another development which is raising alarm in the private sector” is a push by the Malta Union of Midwives and Nurses for early retirement schemes.

“If government gives in to this claim, it will surely be followed by other similar claims in other sectors, as nursing is certainly not the only stressful job there is,” MEA said.

Rather than early retirement schemes, the MEA said the country was in need of more schemes encouraging employees to say in employment longer.

Rein in direct orders and positions of trust

The MEA has also called on the government to avoid granting direct orders and bypassing the normal tendering process, arguing that this was creating a uneven playing field.

“A worrying practice that has crept in is public procurement which bypasses the tendering process by granting direct orders,” the MEA said.

It argued that the practice was creating an “uneven playing field” among business operators and a “sense of mistrust of procurement procedures”.

The MEA’s pre-budget document includes 16 proposals the association would like to see included in the government’s budget for 2019.

In addition to direct orders, the MEA also voiced concerns with positions of trust with the government.

“It is regretful that the number of persons in such positions has increased and there is hardly any transparency as to how these positions are created and how they are allocated,” the MEA said.

The association said the number of positions of trust granted needed to be capped, with such positions not being open to members of parliament. Moreover, it called for full public disclosure of contracts and remuneration conditions, as well as the obligation for those not engaged through a recruitment process to be audited by an independent board “to justify their position”.    

Further improve mechanisms for third country nationals

The MEA noted that “significant progress” had been made in the employment of third country nationals, especially through the introduction of the ‘Temporary Authorisation to Work’ measure.

The association suggested extending the temporary work permit to applicants who are already in Malta, while urging the government to finalise agreements with non-EU countries that a source of labour for Malta, like the Philippines and Serbia.

Public holidays and wage inflation

The MEA reiterated its opposition to the government’s plan to return public holidays falling on the weekend to workers. “In a country which boasts the highest number of public holidays and optional leave, further addition to optional leave is unnecessary, populist and possibly unsustainable.”

The MEA added that there was “further concern of other measures that are in the pipeline that will lead to further absence from the workplace”.

In addition to concerns about workers’ off days, the MEA said it was also concerned by wage inflation.

“COLA is a disputed measure which pegs wage increases to inflation, rather than productivity,” it said, adding that in 2019, employers will be paying an addition €1 per week as part of the minimum wage agreement signed in 2017.

One of the reasons for increased wage demands was the increase in property prices and rental rates, the MEA said while highlighting the observation that foreign employees were not staying in Malta due to the high cost of renting apartments.

“Employees make it clear that labour costs are linked to productivity, and that they cannot be expected to compensate for inflation resulting from a property boom.”

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