Blanket reductions in working hours undermine competitiveness and jobs – Malta Employers

The Malta Employers’ Association has warned against blanket or economy-wide working hour reduction measures.

The association said that it is in favour of flexible working arrangements and has an open mind about the concept of a four-day week, when this is viable for a given business. 

It maintains that decisions on working conditions, including the introduction of a four-day working week, must remain at the discretion of individual employers and aligned with the operational realities of each organisation. The Association cautioned against blanket or economy-wide measures, stressing that even businesses operating within the same sector face very different commercial and structural challenges.

“Every employer should be free to offer working conditions that are suited to the organisation and the nature of its business. No two businesses are the same, even when they operate within the same sector. For this reason, there should be no blanket measures imposed”, Ivan Refalo, President of Malta Employers, said, while addressing a conference hosted by the Association to debate the issue whilst launching its formal position paper on the subject.

“At the same time, competition for workers is already intense and the public sector should avoid introducing flexible working arrangements that are not viable within a competitive, commercial environment to ensure a level playing field in the labour market. The conference hosted by Malta Employers was not aimed at finding quick fixes but rather about achieving a win-win outcome that protects Malta’s competitiveness while maintaining the harmonious industrial relations that have characterised recent years,” he added.

The publication, Debating the Concept of a Four-Day Week in Malta, features an extensive analysis and set of recommendations prepared in response to the growing public debate around the possible introduction of a four-day working week, the MEA said.

“The paper examines reduced-hours arrangements, compressed working weeks and productivity-linked models, assessing their potential impact on productivity, labour costs, competitiveness and family life within the specific context of the Maltese economy.”

It also reviews experiences in different countries alongside studies by organisations including the ILO and the OECD. “It concludes that outcomes vary widely depending on economic structure, productivity and income levels, as well as whether changes are introduced voluntarily or through legislation.”

In this position paper, Malta Employers cautions that a four-day working week is not a universally applicable solution and that while it may work in specific company settings, Malta’s current realities and labour market constraints, presently rule out any economy-wide approach.  

Consequently, Director General Kevin J Borg noted that while the debate on working hours has intensified internationally, there is no single model that can be applied uniformly across all sectors. He cautioned that blanket reductions in working hours risk increasing labour costs, undermining competitiveness and leading to unintended consequences, including job losses or greater reliance on imported labour.

“Any meaningful reduction in working hours over the longer term must be preceded by a broader economic transition towards higher value-added activity, supported by investment in technology, digitalisation, automation, AI and skills development”, Borg added.

While acknowledging the genuine pressures faced by families, particularly dual-income households with young children, the position paper recognises the importance of work-life balance, employee well-being and family-friendly measures. However, it stresses that any discussion on a four-day week should be grounded on evidence and social dialogue rather than imposed legislative solutions underpinned by generalisations, unrealistic expectations and false assumptions, the MEA said.

As part of the analysis, Malta Employers also conducted a survey among its members, with preliminary findings pointing to notable reservations within the business community. Initial results show that 56% of employers surveyed do not believe that a four-day week is suitable for Malta at this stage. 31% of surveyed employers said they would favour a four-day week defined as a condensed 40-hour week with the same pay, while 10% favour a four-day week of 32 hours with a pro rata reduction in salary.