The Malta Employers’ Association stated that, although it appreciated the fact that government, up till now, has generally stuck to the minimum entitlements of the Work-Life Balance Directive to cause minimum disruption to workplaces, the costs of these measures will still be carried by employers from 2024 onwards.

The Directive does not state that expenses related to work-life balance measures should be borne by employers, the MEA said in a statement.

It was reacting to the government's announcement that fathers will be receiving 10 days paid leave on the birth of their child, whilst parental leave will be split into two months paid leave and two months unpaid.

In fact, in many EU Member States it is government that pays for such social benefits. The cost to employers is not limited to payment for these benefits, but also the disruption and expenses incurred in replacing absent employees. 

The recommendations forwarded to government jointly by employer bodies have been largely ignored, including the one where it was proposed to eliminate the transferability of parental leave in the interest of achieving a better gender balance. As things stand, there is the option that this entitlement will be shifted on female employees. It will also be difficult for employers to administer such leave.  

The Association also expressed its reservations about the repeated emphasis, during the press conference, that this is ‘only the beginning’. Government should state exactly what its medium and long-term plans are in this regard so that employers will be forewarned and may plan accordingly. 

Vague statements only give rise to speculation and uncertainty which are, of course, detrimental to investment and initiative. They also raise expectations during a period when many companies are struggling to regain lost business due to the pandemic, and are also assailed by inflationary and labour-market pressures which are unprecedented during the past forty years.

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In similar vein, the Malta Chamber of Commerce also expressed concern.

Malta has an obligation to implement this EU Directive by the end of this month, it said in a statement. This Directive was agreed to at EU level at a time when employers were not facing the inflationary pressures that are being felt today. So a prudent implementation of this Directive is called for given the prevailing economic climate to avoid fuelling further inflation.

The Malta Chamber of Commerce, Enterprise and Industry said has the following concerns regarding its implementation:

1.            Parental leave entitlement is spread over the first 8 years of every child for both parents. It will be very difficult for employers to trace how much parental leave has actually been utilized by an employee, particularly since people may change job several times over the course of 8 years. The Malta Chamber insists on having a centralized system for keeping a record of parental leave utilization, administered by Jobsplus, DIER or the Maternity Leave Fund. This will ensure that there is no abuse of the benefit and ease the administrative burden of implementation on employers. 

2.            The Malta Chamber believes that in the interest of facilitating the administration of parental leave, and more importantly, of ensuring equal burden sharing between parents, irrespective of gender, no portion of parental leave entitlement should be transferable This recommendation has been made by all employer bodies jointly in writing, but was not taken up by Government. This is a missed opportunity to do something tangible to address both the gender employment gap and the gender pay gap and runs counter to promoting female participation in the labour market.

3.            Government will be funding the additional benefits in the first year but will place the onus on employers thereafter, through substantial increases in the Maternity Leave Fund contributions. This will have a negative impact on businesses, many of them are still trying to recuperate from the pandemic and struggling with several challenges such as labour and skills shortages and the resultant wage inflation, high costs of raw materials and transportation, and uncertainty surrounding the sustainability of the current energy prices. The current situation calls for greater sensitivity and a reassessment of the situation after the first year of implementation.