The Malta Employers’ Association yesterday issued a statement about claims being made concerning the issue of overtime payment that was raised at the Malta Council for Economic and Social Development, during the discussions to agree on a social pact during 2004 and 2005.

Firstly, the proposal to curtail overtime payment was fielded by all the employer bodies participating in the social pact discussions, namely the MEA, the Federation of Industry, the Chamber of Commerce, the Malta Hotels and Restaurants Association, and the GRTU, Chamber of Small and Medium Enterprises, and not by any one constituted body.

Secondly, it said, the recommendation to limit overtime payment was made on the understanding that the social pact would be for a definite period of three years, although at one stage in the discussions, a four-year term was also being discussed. The employers’ proposal also capped the number of hours to be paid at single rate at not more than 100 per annum.

Thirdly, the issue of overtime was being raised in view of the fact that employers were foreseeing the closure of a number of firms in manufacturing, and that the performance in the tourism industry was also lagging behind targets at the time. Real GDP growth was less than one per cent and there was clearly a need to discuss measures through which Malta could remain sufficiently competitive to minimize the impact of a sudden surge in closures and unemployment.

The overtime proposal, the MEA said, was made for no other reason than to safeguard the jobs of thousands of employees, as labour intensive companies in Malta and other European countries were relocating to less expensive destinations. The reality at the time was that although there were indications that foreign investment would increase during 2006 and 2007, as indeed it did, this was not a certainty. In these circumstances, employers acted responsibly and proposed a set of measures to address the situation, including that on overtime payment.

Fourthly, the unions were opposed to this measure and from their end, submitted their own package to improve competitiveness. During numerous lengthy MCESD meetings that were held at the time, in which the government also participated, different options for a social pact package were negotiated, and at one point the overtime proposal was dropped. In the final package that was drafted in January 2005, when the Prime Minister himself intervened to reach agreement, there was no mention of the overtime proposal.

The association reiterated that, given the circumstances prevailing in 2004, employer bodies were realistic in proposing measures which, although unpopular, were intended to raise productivity and protect the livelihood of thousands of Maltese families.