Malta's cost-of-living adjustment should be reformed so that workers receive compensation twice a year instead of waiting for one annual increase, General Workers' Union secretary general Kevin Camilleri said.

In an interview with The Malta Independent on Sunday, Camilleri said that the COLA mechanism, which dates back to the 1990s, still offers workers protection but no longer reflects how families live or spend today. He said the basket used to calculate the adjustment was designed before rents rose sharply and before mobile phones, and technology costs became unavoidable household expenses.

"The mechanism needs to be updated," he said, arguing that the current system compensates workers too late because it is based on the previous year's inflation. By the time the adjustment reaches workers' pay packets, households may already have spent months absorbing higher prices.

The GWU is proposing that COLA be paid in two instalments, one in June and the other in December. Camilleri said the measure would not address all wage-related issues, but would narrow the gap between rising costs and the compensation received by employees. He acknowledged that reforming the COLA would be difficult, because the mechanism was originally agreed between unions, employers and the government. Employers, he said, would argue that they are the ones who carry the cost. Still, he said the discussion had to take place because Malta's cost pressures had changed significantly.

Camilleri said the COLA basket should also be reviewed, with a modern system reflecting the real expenses faced by workers.

His comments come as many workers say wages are not keeping up with the cost of living. Camilleri said Malta could not treat pay as a simple question of increasing salaries without considering competitiveness but insisted that stronger social dialogue was needed to close the gap between earnings and prices.

Malta, he said, has no natural resources and depends heavily on its workforce. For this reason, the country must protect workers while ensuring businesses remain competitive. He described the issue as one requiring maturity from unions, employers and government.

"We always ask for more, because that is what trade unionists do," he said, adding that unions also had to act responsibly. Some sectors offered stronger wages, while others remained too low and needed better attention.

Camilleri said the difference was clearest in unionised workplaces. Where workers were organised, the minimum wage was not treated as the standard but as the starting point. Collective agreements, he said, had secured better conditions and helped reduce the gap between wages and living costs.

He also referred to the equal pay for work of equal value, saying that GWU had backed it as a matter of social justice. The reform, he said, also helped employers because it reduced tensions between direct employees and outsourced workers carrying out similar jobs for different pay.

Asked whether some employers were using foreign labour to suppress wages, Camilleri answered directly: "Yes." He said the practice harmed both workers and responsible businesses. Employers who paid fairly and correctly undercut them by paying foreign workers less or by finding ways around employment laws.

"That is unfair competition," he said. "I want businesses to make a profit, but not by sacrificing workers. They should make money by running a better business."

Camilleri stressed that the GWU was not against foreign workers. Its position, he said, was that Maltese and foreign workers doing work of equal value must be paid equally. He said Maltese workers could compete on skill, productivity and reliability, not on accepting lower wages.

He pointed to companies such as De La Rue and Playmobil as examples of employers that had valued Malta because of the quality of its workforce. Malta's advantage, he said, should remain the ability of its workers, not the exploitation of vulnerable employees.

However, Camilleri said abuse remained a serious problem, especially in sectors with many small operators. He singled out catering, where he worked for 20 years, as an example of how the labour market has changed. Work that was once a career for many Maltese employees had increasingly become temporary work or a stepping stone, while many frontline roles were now filled by foreign workers.

In some catering establishments, he said, between 80% and 90% of workers are foreign, with Maltese employees more likely to hold supervisor or managerial roles.

"You close all the loopholes, and someone still finds another way to abuse," he said, describing enforcement as a constant fight.

Camilleri said the authorities faced a practical problem because Malta has many small businesses and limited inspection resources. Some employers, he said, genuinely do not understand their obligations, while others knowingly abuse the system. He suggested that employers should face more scrutiny before opening new workplaces.

The GWU's first approach, he said, is usually to contact employers privately when workers reported underpayment or poor conditions. Genuine mistakes could happen, he said, but repeated breaches could not be excused and would lead to companies being publicly named.

"A first mistake can be a mistake, and maybe even a second," he said. "But the third time, it is no longer a mistake."

He also revisited the debate on stronger union presence in workplaces. He rejected the idea that the GWU wanted compulsory union membership, saying workers have a constitutional right not to associate with a union if they do not wish to do so.

The model supported by the GWU, he said, is that workers should be clearly informed when a union is present at their workplace and should be free to join or not. However, he argued that non-members still benefit from collective agreements.

For that reason, the GWU proposes a separate contribution system. Money from non-members would not go to the union, but to a proposed chamber of labour, managed by unions and government, to fund research and initiatives aimed at improving workers' conditions.

Camilleri disputed suggestions that union membership in Malta had fallen to around 30%, saying the country remained relatively strong when compared with France and the UK. The GWU alone, he said, had around 46,000 members, while other unions also represented significant numbers.

Still, he admitted that unions need to do more to attract workers, especially younger employees and those in less organised sectors, and should be more present in education.

Beyond wages, Camilleri said the biggest challenge facing the labour market is the speed of technological change. Low-skilled workers, he said, are most exposed, not only because they often face weaker conditions, but because artificial intelligence and automation could replace many of their roles.

He used supermarkets as an example. Where several cashiers were once needed, self-checkout systems now allow fewer employees to do the same work. The responsibility of employers and unions, he said, is to help those workers move into other roles through training.

The transition has to be fair, he said. Workers could not simply be told that their jobs had disappeared. Some may be able to move into supervisory, administrative, or other roles, but only if they are given the skills and support to do so.

Camilleri said Malta had often managed to turn challenges into opportunities, but it needs to plan seriously for the effect of AI and digitalisation on employment. Training, he said, must be central to any future labour policy.

On workplace wellbeing, Camilleri said mental health should not be treated as a fashionable slogan. Employers, particularly larger ones with human resources departments, have to see workers as people and company assets, not merely names on personnel files.

He said that it is unrealistic to expect employees to separate personal problems from work-related stress, as pressure in either sphere inevitably affect the productivity, motivation and morale.

Camilleri said HR departments in Malta need to go beyond administration and offer genuine support, including psychological help where needed. He added that mental health remained a taboo, even though stress, digitalisation, heavier workloads and feelings of being undervalued are affecting more workers.

Those concerns also shaped his view of remote work. Camilleri said the pandemic had proved that working from home was possible, but he supports a hybrid model rather than permanent remote work. The home, he said, should remain a home and not become a permanent workplace.

He described the government's approach of allowing up to two days of remote work as sensible, while noting that many workers cannot work from home because of the nature of their jobs. Policymakers, he said, must also consider fairness for those employees.

On the four-day work week, Camilleri said the GWU had discussed this idea in 2021, including a model in which workers complete 40 hours over fewer days. But feedback from workers raised concerns that many would simply use the extra day to work overtime or take a second job.

When discussing the idea of a 32-hour working week, he stressed that the first question to be answered is: What is the purpose of introducing it?

He said the primary objective should be to improve work-life balance, enhance workers' wellbeing, and support better mental health. However, if the intention is simply for people to use the reduced hours to take on part-time work or overtime elsewhere, then the proposal defeats its very purpose.

He also pointed out that the impact of a 32-hour working week would vary across different sectors. While some industries may need to recruit additional employees to maintain service levels, others may be able to adapt through greater use of technology, automation, and more efficient ways of working. For this reason, he argued that a one-size-fits-all approach would not be appropriate.

Any discussion on a 32-hour working week should remain focused on improving the quality of working life while ensuring that businesses remain sustainable, productive, and competitive.

Asked what single reform he would introduce to improve workers' lives, Camilleri chose flexibility, supported by training and a focus on healthier, better paid and more motivated employees.

Looking ahead, he said the GWU must remain a catalyst for reform and ensure that the human element is not lost as the world of work changes. The future, he said, could be positive, but only if Malta manages change instead of allowing technology and cost pressures to dictate it.