Malta Employers’ Association director-general Joe Farrugia said that one of the major hurdles employers are facing these days is the rising level of public sector employment which stands at 27% of Malta’s labour force.

He was speaking in the context that there is a shortage of labour in certain sectors due to the lack of skills which exist among us Maltese. 

“This is one of the reasons why we criticise the increase in employment in the public sector. It is a drain on a resource that can be more productively employed in the private sector,” Mr Farrugia said.

The government, he continued, should work towards reducing public sector employment which takes up a big portion of Malta’s labour force.

Economy picking up

Mr Farrugia explained that the economy is picking up and the country as a whole is becoming more conscious of its limited resources and rather than being a question of employing unemployed resources it is an issue of employing them more productively.

Influx of workers from other countries

Turning to the influx of foreign workers, he said the impact is not positive across the board because you can have vulnerable sectors that depend on a narrow competitive edge and can lose out as a result.

In the labour market, he explained, some sectors are in a position to cater for wage inflation such as the financial services and gaming sectors.

But in manufacturing, competitive margins are extremely narrow so they stand a chance of losing out if labour costs increase, Mr Farrugia highlighted.

And this ties in well with the proposals the MEA has submitted.

“Inflationary pressures are being mitigated in the labour market through foreign employees since if this weren’t the case we would have a wage inflation which does not reflect an increase in productivity.

“Concurrently, the deflationary factor has been the international price of fuel which has fallen to a level which is unprecedented and this is why the MEA and other constituted bodies are expecting this to be reflected in energy prices, especially when one considers the impact of the interconnector and the efficiencies to be brought about by the new power station,” Mr Farrugia said.

Extension of sick leave for parents whose children are sick

On the proposal of extended sick leave for parents whose children are sick, Mr Farrugia said that sick leave is an individual entitlement and does not apply for third parties, referring to children of parents who are employed.

“If the child is sick and both parents are working, who will be the one to take sick leave to look after the child, and who are doctors going to certify?” he asked.

He also questioned whether such a measure can lead to further absenteeism from schools.

“We know there are parents out there who abuse of sick leave certificates not to send their children to school and this can exacerbate the problem,” he added.

“The law does provide for urgent family leave though,” he pointed out.

“Employers should not be dragged into family issues but we do have an ever-increasing number of companies which are introducing additional family friendly measures.”

Disabled persons

Asked whether employers were employing more disabled persons as a result of the enforcement of a 1969 law which stipulates that certain companies have to have at least 2% of its workforce comprising persons with a disability, he said that there are still some issues at stake on this measure. which were announced in the last budget and there are discussions going on between t but discussions between the MEA and the Employment and Training Corporation are under way.

“Problems such as what defines a disabled person bearing in mind that people with a disability have no obligation to register themselves with the KNPD or ETC arise.

“It is easier to find a job placement for a person with certain disabilities than others, yet employers are conscious of the issue and the number of companies complying with this law are on the increase,” he said.

Even in this area, supply is an issue because there are only 500 persons who are actually registered as being disabled and registering for work, he added.

Youth unemployment

As for youth unemployment, he said that the rate is lower in Malta than the EU average but there is an issue with NEET which stands for ‘Not in Education, Employment, or Training.’

“I believe that many active labour market policies undertaken are having a positive effect. This is evident from the female participation rate, the ever-increasing number of retired persons in the labour force, and schemes introduced by the ETC and Employment and Education division to incentivise more youths to take up employment and training opportunities,” he said.

Precarious employment

Mr Farrugia said: “There is no definition for the term and since the term lacks a definition it cannot be measured

“What is happening in the labour market is an increased incidence of atypical employment, that is part-time and definite period work contracts.

“These types of employment are mostly voluntary and cater for the needs of both employees such as women who prefer to work shorter hours, and employers,” he said.

COLA system

Following the “meagre” 58c cost-of-living increase during the last budget, he said: “This has been a long-standing issue and so far no consensus has been reached between social partners on how it can be reformed. The MEA made it clear in its budget proposals that there should be no tampering with the minimum wage however.”

 “The minimum wage should only be increased according to COLA.

“However, every effort must be made to have less people earning a minimum wage and this is achievable through labour market pressures such as labour mobility and collective bargaining,” he said.

Pension reform

The MEA is against the separation of pensionable age and retirement age.

Explaining further, he said he firmly believes it should be up to the employer to decide whether the employee is retained beyond retirement age.

“We are in favour of having people working beyond retirement age and this is happening.

“But employees should be safeguarded from having employees remaining in employment for their own reasons such as due to the inadequacy of first pillar pensions.

“If the person being retained is active then all is good but if someone was lazy along the years or never bothered to save any money but now was in need of pension money, this will no doubt pose a problem for the employer,” he said.

Free childcare: MEA proposes scheme should cover employees working on shifts

On the free childcare scheme, he said that it is effective and the MEA has proposed extending the scheme to cover employees who work on shift work.

The MEA has also suggested that a small part of the children’s allowance goes into a private account to be used exclusively for travel by the time the child is 16 years old.

Asked to give a reason why, he said that children “open their mind more when they travel. It is an important component of children’s education and influences their choice of career and their decision whether to continue studying,” Mr Farrugia said.