The country must now well and truly have hit the beginning of the silly season, and ushering in that season on Friday was the Malta Employers Association with its proposals on cracking down on employees’ sick leave or, rather, the reasons for their sickness.
According to the MEA, which is usually one of the more rational of the social partners, employers should not foot the bill for employees’ ‘self-inflicted’ illnesses such as sunstroke, sports injuries or hangovers, or for cosmetic surgery procedures.
It is true that employers have a right to feel aggrieved over an employee ‘pulling a sickie’ because of the previous night’s alcohol-fuelled indulgences and, to be fair, they also have a point about purely cosmetic surgery. But let’s face it, one can hardly describe ailments such as sunstroke or a sports injury as ‘self-inflicted’.
The Prime Minister took the right approach on the subject on Friday when he stated that the issues raised by the employers are real issues and need addressing, while describing some of them as “draconian”.
Changes are indeed needed to the Employment and Industrial Relations Act, even to take on board some of the MEA’s suggestions, but, as the Prime Minister said, any related solutions need to be progressive and not regressive.
The government is reported to have its own suggestions on reforming the Act in question and it will be interesting to see what, exactly, the government has in mind on such a sensitive issue.
But one burning question remains: how does one have a hangover listed as a cause for sick leave on the certificate issued by a doctor?
When an employee calls in sick for work, s/he is usually required to present a doctor’s certificate confirming the fact that the employee was sick, what the illness is, how long the employee has been suffering from his/her affliction and when s/he should be expected to return to work.
That is generally accepted as being all well and good. But then again there is the constant accusation that some of the more unscrupulous doctors out there simply sign off sick certificates as though they were bus tickets. This, perhaps, is where the real solution to the problem lies.
The MEA also brought up the extremely sensitive issue of the annual Cost of Living Increase (COLA), and once again insisted that the COLA should be linked to productivity rather than inflation. The level of the annual COLA has been a long-standing bone of contention between the social partners – those supporting employers and those supporting workers alike – and the government. And this argument is not a new one, but it is one that warrants further evaluation.
The European Commission has called on Malta in the past to rethink the forever controversial cost-of-living adjustment ‘given’ to workers in each budget to compensate for the past year’s inflation.
But it is not only the European Commission and the MEA that hold such a viewpoint on this annual bone of contention between the trade unions and the government.
Former Central Bank Governor Michael C. Bonello had called for a similar rethink when he remarked that any benefit the mechanism may be perceived to have in terms of stable industrial relations must be weighed against its potential to ratchet price levels upwards, which would constitute a veritable death knell for the country’s already embattled manufacturing sector.
The International Monetary Fund has been calling on the government to do away completely with the COLA for years now in its own annual assessments of the Maltese economy, where it has repeatedly called for the COLA to be replaced with “productivity-linked wage increases at enterprise level”.
Malta’s employers have long been slamming the COLA’s effect on the country’s wage levels and very closely associated and essential competitiveness levels. They have also echoed the IMF’s call for productivity-linked wage increases to replace the COLA, and have also suggested in the past that the government foots part of the COLA bill, instead of the increment being absorbed completely by employers. The last government had at one point appeared close to reconsidering the adjustment’s future, but in the end declared that the COLA was here to stay.
And perhaps rightly so. Any such move – an all out scuttling or even a downward tweaking of the COLA – would undoubtedly prove highly contentious and possibly politically destructive, given the incendiary reaction of past attempts to limit the COLA for the sake of competitiveness.
Malta is one of the few countries in the EU that has such a generalised wage indexation mechanism. In the European Commission’s view, and since the COLA effectively adds to the minimum wage, the adjustment “may further hamper the competitiveness of the labour-intensive sectors” it said in its annual review of the Maltese economy not too long ago.
The COLA issue, according to the Commission, is particularly pertinent in view of the recent increases in energy prices, which, the EC said, when coupled with the COLA, could lead to wage-price spirals. While the EC had not advocated an all out scrapping of the mechanism, it has suggested that it be tweaked to a certain extent. It also observes a degree of imbalance in the increment being given across the board, having noted that the COLA wage increases are “proportionately higher at the low end of the wage spectrum”.
The writing has been on the wall, spelt out clearly for all to read, for a long, long time now. And past suggestions by the Central Bank, the economists at the IMF and the European Commission concur that something has to be done to address the COLA issue. But then again, any decision on the COLA, even as regards its yearly rate, is fraught with such turmoil and political hardship that few politicians would have the resolve to tackle it head on.
At some point the tightrope between business bodies and the unions will have to be walked. At one time or another something will surely have to be done with the COLA.