MEA sees increase in demand for reduced working week

Last Updated on Thursday, 20 April, 2023 at 10:58 am by Andre Camilleri

There is an increase in demand for reduced working week by married persons, particularly those raising young children, president of the Malta Employers Association Joanne Bondin said.

More companies have been open to offering reduced hours so that employees can allocate more time to family responsibilities, she told this media house in an interview.

Overall, she said that there needs to be good communication between the employer and employee to balance out the needs of the employer with the needs of the employee: “In all this, we seem to forget that the connection between an employer and an employee is a relationship which needs to be nurtured. The employee is essentially offering a service to the company and is getting paid for this service along with being offered other conditions that govern such a relationship. In any relationship, if either party is not satisfied or fulfilled then grievances arise so both parties need to ensure that the other half is engaged and content.”

Public officers will soon be able to request a four-day week, without reducing their hours, after the Office of the Principal Permanent Secretary announced the Flexi-Week scheme.

Asked about the MEA’s position on the four-day working week and whether this should be something that is implemented in the private sector, she said that “there is certainly more demand for a flexible work organisation in various forms in the private sector. In general, employers do not resist such flexibility as long as productivity is not affected”.

She explained how in manufacturing distributing 40 hours over four days was already in practice and she said that there should not be any issues with it as long as productivity does not decrease.

“It is not an issue as long as it is a win-win situation which safeguards the productivity and competitiveness of enterprises.”

“However, conditions vary between companies and sectors, and one cannot expect a common solution for all enterprises. Certainly, there are already companies that afford to provide full flexibility – for example full remote working – to many of their employees, whereas others need their labour force to be fully present to be able to operate.”

Foreign labour

Bondin said that there is currently a high demand for foreign labour as more Maltese young people are leaving Malta to work abroad and there’s been a significant change in Malta’s demographic due to Malta’s low fertility rate.

MEA has been sensitive to the rapid change in Malta’s demographics over the past decade as more young people seek employment abroad combined with a fertility rate which is the lowest in Europe, and among the lowest worldwide, Bondin said.

Bondin was referred to an interview with The Malta Independent on Sunday in which President George Vella questioned whether Malta, as the most densely populated country in Europe, could continue importing “more foreigners to keep the economic wheel turning”.

The MEA president said that “some economic sectors depend exclusively on foreign workers to sustain their businesses… our economy is generating a demand for low-skilled jobs, thus requiring more foreigners on a relatively low pay”.

“What needs to be done is that there needs to be a strategic cohesive thrust across all sectors rather than such sectors working in silos. We have been saying that we should focus on high-value-added business so it is now about time that we devise a national plan that will enable us to actually implement this.”

Public sector vs private sector jobs

Bondin was also referred to what CEO Malta Chamber of SMEs Abigail Agius Mamo told The Malta Independent on Sunday: that the government taking employees away from the private sector is a “significant problem”.

Asked whether this was the case and how the private sector’s workforce could be improved, Bondin said that “it is not just a matter of migration from the private to the public sector that is creating labour shortages”.

She said that there is a shortage of workers for jobs where teleworking is not possible, such as catering, health, manufacturing and others.

“What will affect negatively the private sector is if teleworking in the public sector is perceived to be simply the same pay for fewer productive hours.”

“Also, mobility to the public sector should be the result of productive vacancies, and not just a desire by employees to work in the public sector. Otherwise, there are many companies in the private sector that have introduced similar measures with the difference that in the private sector, productivity is expected to remain the same or increase once such measures are introduced, and there are the necessary controls to ensure that this is the case. It is hoped that this will likewise be the case in the public sector.”

Maltese workers leaving, shortage of skilled workers

In light of the increased cost of living, people are demanding better wages. This has also led Maltese people to leave Malta as they might find better opportunities abroad. Bondin was asked why employers are not offering more competitive packages to retain local workers.

Malta is competing for “scarce human resources with other countries”, she responded.

“There may be many factors which are influencing youths to work abroad, not necessarily related to higher wages: disillusionment with the local political situation; new experiences; cost of property and rentals; better career prospects; well-being issues, etc.”

During Bondin’s MEA Annual General Meeting speech, she spoke about the importance of good governance and how the current political scandals may have a negative effect on retaining skilled workers.

Asked about this she said: “The MEA has been campaigning for an improvement in governance for years and has also issued position papers on how we can improve governance structures.”

She gave a few examples of proposals the MEA had published in its position paper, which can be found on its website.

“Examples of these are full disclosure of persons holding positions of trust, including contracts, remuneration and reporting of hours and duties performed, having a leaner and full-time Parliament, separation of business from party financing – state-funding political parties, refraining from issuing direct orders etc. and full disclosure of government contracts.”

The “scarce human resource” has led to there being a shortage of skilled workers in Malta. Asked about this issue, she said that there is a “mismatch” between the skills of this generation and the needs of the industry.

“Moreover, our economy is generating a demand for low-skilled jobs, thus requiring more foreigners on relatively low pay.”

“High wage inflation is not always matched by productivity, thus affecting our competitiveness.”

She added that there is also a need for more students to follow STEM (science, technology, engineering and mathematics) subjects in this industry. She also thought it fit to mention “the phenomenon of underemployed graduates.” 

Effect of the COLA increase, no update on COLA stabilisation

In the 2023 Budget, the Cost of Living Adjustment (COLA) was an unprecedented €9.90 per week.

Asked how businesses have responded to this significant increase, she said that many businesses would have increased their wages by more than the COLA anyway, “due to labour market pressures.”

“Although businesses operating in low value-added sectors have been negatively affected by the extraordinary increase in COLA due to the unprecedented spike in inflation, which, it needs to be said, has been subdued due to government’s subsidisation of energy prices, many businesses would still have increased wages by more than COLA due to labour market pressures.”

Before the 2023 Budget, the MEA proposed that the COLA should be stabilised to minimise the impact on businesses each year.

The proposal is for a minimum and a maximum COLA amount which can be given out per year – from €2.50 to €6 a week – for a five-year period. And then in the sixth year, the balance will be paid out, where if it is owed to the employees it will be over and above the COLA for that year and if owed to the employers will be reduced from the COLA of that year. MEA is proposing that this will be implemented for Budget 2024.

In response, Economy Minister Silvio Schembri said that if all stakeholders involved in the COLA agree to change the mechanism then the government will not stop this from happening.

Asked for an update and whether stakeholders have shown their support, Bondin said the “MEA did not propose a change in the COLA mechanism. What was recommended was to leave the mechanism unchanged but to introduce a stabilising element to reduce the volatility caused by sudden changes in the price level.”

“For example, the abnormal high inflation during 2022 destabilised even the collective agreement in the public sector to the extent that the government had to negotiate additional increases for lower grades with the unions.”

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