The role of social partners in the design and implementation of policies and reforms – Malta

Abstract

Malta has a strong tradition of collective interest representation of workers and employers. The oldest existing trade union in the country, the Malta Union of Teachers, was founded in 1919. On the other hand, the oldest existing registered employers’ association is the Malta Chamber of Small and Medium Enterprises (GRTU), which was founded in 1948/49. In 2015, there were 29 registered unions with a total of 94,014 members listed in the annual report of the Registrar of Trade Unions (2015). The largest trade union is by far the General Workers’ Union, which claims to have some 53% of all trade union membership in Malta. The second largest trade Union is the Union Haddiema Maghqudin (UHM) which claims to represent around 27% of all trade union members. These two general unions are complemented by several smaller trade unions, often representing specific professions, which are growing in strength year after year. Nearly all of the unions form part of three blocks, namely the GWU, the Confederation of Malta Trade Unions (which consists of the UHM and another six unions) which represents 32% of all union membership, and the most recently formed Forum of Maltese Unions (For.U.M., which consists of 12 unions) which represents 15% of all union membership. On the other hand, there are 14 registered employers’ organisations, with the largest being the GRTU with a membership of 8,155 mainly self-employed persons. One should also note that the Malta Chamber of Commerce, Enterprise and Industry (MCCEI), one of the most important employers’ associations in Malta, which represents over 1,100 members (MCCEI, n.d.a), is not listed in the official register held by the Registrar of Trade Unions. The country has a strong tradition of collective agreements at enterprise level. Sectoral agreements are not carried out. Virtually all the employees in the public sector are covered by collective agreement. However, the percentage of employees in the private sector who are covered by collective agreement has decreased considerably over the years. Indeed, Baldacchino and Gatt (2009) found that during the thirteen years between 1995 and 2008, the number of collective agreements in the private sector shrunk from 212 to 168. A recent survey carried out by Debono (2015) found that collective agreements represent about 55.8% of employees in Malta, including 86.7% of the employees in the public sector and a much lower 35.8% in the private sector. The larger the organisation in the private sector, the greater are its chances of being covered by a collective agreement (Debono, 2015). Collective agreements have over the years influenced substantially the employment relationship in Malta, and improved the working conditions of many workers. Current collective agreements are based on a model collective agreement agreed by the GWU and the Malta Employers’ Association (MEA) in 1967 (Greenland, 2011). It may be useful to note that employers’ associations do not take part directly in collective bargaining and do not sign agreements. Their role with regards to collective bargaining is that of giving advice to their members if required. Since the Malta Council for Economic Development (later reconstituted as the Malta Council for Economic and Social Development, MCESD), was set up by government back in 1998, trade unions and employers have increased their influence at the level of national policy making (Zammit, 2002). The MCESD is the highest forum of tripartite concertation in Malta and includes representatives of the most important trade unions and employers associations in Malta. The union bodies represented on the MCESD are the GWU, UHM, CMTU, and For.U.M. The employers’ associations represented on the MCESD consist of the GRTU, MCCEI, the Malta Employers Association (MEA) and the Malta Hotels and Restaurants Association (MHRA). These trade union bodies and employers’ associations are considered as representative in the national context, mainly due to the number of members they represent. Indeed, after For.U.M. was constituted as an umbrella organisation in 2004 and started vying to gain recognition and representation on important national and international fora, its main claim was based on the number of employees who are members of the unions that it represents. The most recent emblematic agreement among social partners and the main political parties regarded an employment policy initiative entitled “The next leap: From labour market programmes to active labour market policy” (better known as Jobs Plus), proposed by the UHM (2012). The initiative consisted of a set of active labour market policy proposals meant to improve the flexibility and productivity of the Maltese labour market. In a rare demonstration of unity, this document was endorsed by the major social partners and political parties before the 2013 general election. When the Labour Party was elected in government, it started implementing the policy. In order to ensure that such policy is implemented, Clyde Caruana, one of the authors of the policy, was given the posts of Chair of the Government’s Jobs Plus policy and Chair of the Employment and Training Corporation (Malta’s public employment service organisation), which is in the process of changing its name to Jobs Plus. “Malta’s industrial relations system has been modelled on that of Britain, the former colonial power…As a result, the established model of industrial relations in Malta is that of voluntary, bipartite, collective bargaining at enterprise level in a traditionally polarised, adversarial relationship between employers and trade unions (Zammit, 2006, p.2). The MCESD facilitated social partners to depart “from the divisive policies and the political polarisation of the previous era and from the informal, ad hoc relations among actors, which often predominate in a small-scale society” (Zammit, 2006, p.10). Having said that, disagreements among social partners and public authorities represented on the MCESD and other fora are common. Some of these disagreements led to historic deadlocks, such as the inability to conclude a social pact in 2005 (Debono, 2005). One should note that disagreements on national policy do not lead to industrial action, but have in recent years led to public protest. For example, unions have organised mass protests against the hike in utility tariffs. The dialogue between social partners and public authorities does not appear to have been substantially affected over the course of the recent international economic crisis. Assisted by the then government, unions and employers collaborated considerably to minimise the negative effects of the crisis on employment. One should note that Malta was among the least affected European Union countries during the international recession – this is demonstrated by the few jobs lost and the relatively small effect that the crisis had on the country’s GDP. It is also useful to add that there are ongoing discussions regarding possible improvements of social dialogue (e.g. by reforming the MCESD, as will be mentioned later on in this document), but these do not appear to stem from the international economic crisis. Having said that, as stated earlier, the international economic crisis appears to have helped to moderate the unions’ wage demands during collective bargaining. Besides, the crisis might have also assisted an already existing trend through which trade unions are resorting progressively less to industrial action in favour of consultation and social dialogue (Debono & Borg, n.d.). The number of strikes taking place in Malta have been minimal in recent years – 3 in 2009, 0 in 2010, 3 in 2011, 2 in 2012 and 0 in 2013 (Department of Industrial and Employment Relations, DIER, 2010-2014). The DIER plays a major role in settling trade disputes through mediation before they escalate into strikes and other expensive forms of litigation. For instance, in 2013, the DIER intervened on 57 occasions and managed to broker agreements in 47 cases (DIER, 2014).