One must make it absolutely clear that a country that is based on the principles of law can never countenance illegality. The laws are there to be obeyed and must be enforced.

The country’s growth and economic sustainability cannot be based on the exploitation of its economic forces and must, on the contrary, be nurtured on the cooperation of all economic forces.

That is how growth has always been achieved and what progress has been made over the years has been achieved through this cooperation. Maybe the growth and the progress that has been made could have been better, but that’s a different argument.

The new administration has come under a sustained push by the General Workers’ Union and some other unions especially at MCESD level to eradicate precarious employment – that is people employed on definite contracts.

There is much that is right in this effort to remove practices that verge on the illegal because it opens a very wide door to exploitation. Many times, those employed by such contracts can do no other and are thus forced to accept such practices because they can do nothing else. Had it been up to them, most certainly they would prefer to be employed with an indefinite contract.

But there is a limit to how far a country can enforce legality and laws to such an extent that it shackles economic activity.

A week ago, the Malta Employers’ Association published a position paper on the issue. In it, the MEA pointed out that ‘With regard to illegal practices, the association’s position is that, rather than introducing further legislation, a better solution lies in strengthening enforcement of existing legislation  to ensure decent work for employees and a level playing field for employers through compliance.’

Joseph Farrugia, MEA director general, highlighted the fact that even if one were to classify part-time, temping and definite period contract work as ‘precarious’, official statistics reveal that the prevalence of such employment contracts in Malta is significantly less than that prevailing in the EU, which has among the most tightly regulated labour markets in the world.

Atypical employment is a necessary feature in a labour market which is adjusting itself to changing labour demographics due to a higher female participation, more foreign employees and also an increasing number of retired employees in employment.

Mr Farrugia also pointed out a list of work practices which have been termed as ‘precarious’ in a survey carried out by the General Workers’ Union, and explained how each one of these practices is already covered by existing legislation.

The MEA made a number of recommendations to curb abuses in employment. It called on the government to set a minimum hourly rate to ensure that companies winning tenders are in a position to provide at least the legal minimum working conditions to their employees, and to be in a position to abide by any regulations and administrative burdens which may be imposed upon them. 

The government should also strengthen its inspectorate to ensure compliance. The MEA also appealed to the government to endorse the services charter which it has proposed to cover the security, cleaning and care working sectors as a self regulating mechanism to facilitate compliance. 

The measures which have just been announced by the government to control illegal practices in outsourced services is a welcome step in the right direction which the association has been recommending in lieu of uncalled for and unnecessary legislation. 

The association said that unions should also endorse the charter and respect the principle of freedom of association to the full, including the freedom to choose one’s representative or even to leave a union without coercion from unions or management.

The MEA said that it also has a role to play in educating its members about their legal rights and obligations and to promote ethical work practices.

Malta is an island but it is in the world and what happens here is affected by whatever happens elsewhere. We are in a highly competitive world and our enterprises have to balance their opportunities against what others can do to undermine our competitiveness. We are no longer living in a world when we could raise bastions all around us and manage our affairs as we see fit. In a general way, if we raise the barriers far above what others have, we are delivering an open invitation to others to undercut us and our entrepreneurs would be getting an open invitation to relocate elsewhere.

On the other hand, obviously, we cannot allow anybody and everybody to discard any or all employment legislation  and on a rule of thumb we should put up the legislative barriers as high as they can go. But not to the point where entrepreneurs can be enticed to relocate elsewhere.

To conclude, attaining better competitiveness is not arrived at by means of this enforcement of laws regarding employment only but rather by upgrading the level of work and employment done, the productivity of our enterprises, the sourcing of new markets, upgrading our R&D capacities, and establishing linkages with countries and enterprises and markets that are in the forefront of development.