Collective bargaining is the process of negotiations between employees, through their union and the employer or group of employers. This process often leads to collective agreements. Collective bargaining coverage refers to the number of employees who are covered by a collective agreement.

Since collective agreements are applicable for union members and non-union members, the collective bargaining coverage does not depend on the number of employees enrolled in trade unions. It is a percentage based on the number of employees who are covered by a collective agreement in relation to the total number of employees who could be covered by a collective agreement.

Reports on the collective bargaining coverage in Malta specify coverage rates ranging from 30.7% to 41.8% in 2024, which means that less than half the Maltese workforce are covered by collective agreements. These figures are lower than the EU average which stands at 60%. Malta is listed with the countries, which have the lowest collective bargaining coverage like Hungary and Poland. Sweden, Denmark, Austria, Belgium and France have the highest collective bargaining coverage of over 80%.  

The comparison with other countries must be made with a fine comb. A high collective bargaining coverage does not necessarily mean better working conditions and wages for employees.

This is due to the respective conditions of work established in collective agreements and how they compare with the national base levels. Nonetheless, a higher collective bargaining coverage is not only desirable but has become mandatory for Malta through the Minimum Wage and Collective Bargaining Regulations (Subsidiary Legislation 452.135 of the Laws of Malta), which transposes the EU Directive (EU) 2022/2041 on adequate minimum wages in the European Union. The EU directive specifies that all countries with a collective bargaining coverage below 80% need to devise action plans to raise the country rate to 80%.

The Directorate for Employment and Industrial Relations (DIER), through its consultative fora issued a National Action Plan on a five year-term, aimed to increase collective bargaining coverage in line with the target EU directive of 80% coverage. The action plan consists of two action points and a brief report on a commissioned study on collective bargaining in Malta, carried out in 2025. The action points are: "Building Trade Union Capacity" and "Creating a High-Level General Agreement for Non-Unionised Precarious Sectors".

The first action point involves the creation of a Resources Fund supported by national and EU funding to improve the work of trade unions by providing training, assisting in outreach and modernising practices. This measure is aimed to assist trade unions in their daily operations, hence improving collective bargaining.  

The second action plan involves the establishment of a high-level Tripartite Council composed of representatives from the government, employers and trade unions. The council shall establish high-level agreements for non-unionised precarious sectors to provide improved conditions of work and financials, which are higher than the statutory minimum established by law.

We will have to see whether the proposed National Action Plan will be implemented as proposed and whether it shall lead to the targeted 80% collective bargaining coverage. Many agree that collective bargaining and collective agreements are the key to improved conditions of work and financials of employees. A boost in this direction is desirable.

Yet trade unions still find resistance when engaging in collective bargaining and some workplaces and employers are still not willing to engage in collective bargaining processes. Similarly, some employees are either sceptical or afraid of joining trade unions and of getting trade unions involved in negotiations at their workplaces. In this scenario, an 80% collective bargaining coverage target seems elusive.

Marco Bonnici is President of the Malta Union of Teachers