The Malta Independent 30 September 2022, Friday
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Air Malta saga: taxpayers 'footing the bill' – Malta Chamber

Saturday, 13 August 2022, 09:42 Last update: about 3 months ago

The Malta Chamber of Commerce, Enterprise and Industry said it believes that termination packages for Air Malta employees "appear to be absurdly high and illustrative of how the bargaining power of overly protected groups results in unfair outcomes for the country as a whole".

The chamber becomes the second employers' body to lambast the agreement. On Friday, the Malta Employers Association described the severance package offered to redundant Air Malta employees as the most obscene agreement in Malta's industrial relations history.

In a statement Saturday, the Malta Chamber reiterated the strategic importance of having a national airline that is run efficiently to ensure its long-term viability. It is clear that there is no other way that this can be achieved without shedding hundreds of Airmalta's employees.

It is also clear that the starting negotiating position of guaranteeing their inflated take-home pay, which was a contributing factor to Air Malta's failure, makes it virtually impossible for them to be employed anywhere where their pay can be justified.

The Malta Chamber is cognisant that in these circumstances, severance payments may very well work out cheaper for the country than burdening the public sector with hundreds of superfluous overpaid reluctant workers indefinitely. What needs to be clarified is the basis on which the amounts being offered have been arrived at. The Malta Chamber said it believed that these amounts appear to be absurdly high and illustrative of how the bargaining power of overly protected groups results in unfair outcomes for the country as a whole.

Reports of the severance packages for Air Malta employees negotiated by unions with Government have understandably provoked anger in taxpayers and private sector operators who uphold performance-based standards for compensation. The salary expectation of hundreds of Air Malta employees are not commensurate with their competence and willingness to be productive. They therefore could not be absorbed by the public sector and would not fit in the private sector either.  Following years of being paid hefty salaries for questionable output at the national airline that bled millions every year they are now being given a six-figure golden handshake costing the country around €50 million

The Malta Chamber said that the Air Malta saga is the culmination of decades of unsustainable employment practices and vitiated political interference in the running of the national airline. Other Government-owned entities are susceptible to similar extravagances, and are unlikely to ever be brought to the reckoning by the European Commission, as Air Malta has been. The Malta Chamber said it is particularly concerned that "we will continue paying millions in hefty salaries and superfluous spending" at other entities unless a credible framework for the monitoring of the performance of such entities that is ringfenced from political interference is put in place.

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