02 February 2005

The Web
Send feedback

The public holiday debate
The Malta Financial and Business Times speaks to union leaders and employer representatives to gauge their reactions to the outcome of the public holidays debate and the failed social pact
By Kurt Sansone and Matthew Vella

While Malta’s unions appear to be adopting a wait-and-see approach, Malta’s employer representatives appear satisfied with the outcome of the public holidays debate.
Three representatives from Malta’s employers associations have welcomed the decision by Government to go ahead and legislate the contentious proposal to cut public holidays, but are still hankering for more moves towards increasing competitiveness.
The Federation of Industry, the Malta Chamber for Small and Medium Enterprises (GRTU) and the Malta Employers Association, have all indicated the need for a continued application of proposals listed in the government packet presented at the Malta Council for Economic and Social Development.
Lamenting the duration of discussions held with the unions during the MCESD talks, employers are now expecting that more actions will be taken in a bid to increase the island’s competitiveness.
It is expected that government proposals drawn from a MCESD competitiveness report will be taken up in the near future.
The FOI’s president Anton Borg said the primary concern for added measures to enhance competitiveness would have to see that operating costs would not increase more than productivity. He urgently called for government to curb its expenditure, saying that revenue collection exercises such as the increase in VAT by three per cent, ultimately resulted in an increase in operating costs for industry.
Arthur Muscat, president of the MEA, said the cut in public holidays had to be viewed as a measure that increased productivity and that was not cutting in any worker’s standard of living because wages were not being cut.
Pointing at the long drawn-out discussions within the MCESD, Muscat said the employers had been in tandem with the government’s proposals despite the fact that the unions’ proposals would have decimated the final packet government presented.

Anton Borg (FOI) – “this first step is not enough”
Federation of Industries president Anton Borg believes Government’s stand on public holidays will not be enough to increase the island’s competitiveness as he awaits the MCESD’s sub-committee for competitiveness to issue more proposals in this regard.
Borg said it was “certain” that government’s first step to address the competitiveness crisis that has split unions in a bid to arrive towards a social pact, would not be enough.
“Discussions need to continue for the proposal of more measures to increase competitiveness. What is needed is to see that the increase in operating costs moves alongside the increase in productivity. Basically it is important to see that productivity will always be more than the operating costs. The MCESD’s competitiveness secretariat should continue in drawing up proposals in this regard.”
Borg told The Malta Financial and Business Times that a social pact would have to “cover every angle”, from the training of unemployed workers, to proposals for the control on government expenditure.
According to Borg, it was “very important” for the government to control expenditure: “If Government resorts to collect more revenue in the form of, say, the recent three per cent increase in VAT, the effects of such are it will affect the retail price index, and in turn creating an effect on the cost of living allowance (COLA), increasing operating costs. That is why control of government expenditure is important.”
Asked whether the 17 per cent surcharge in the price of electricity had presented an adverse effect for industries seeking to become more competitive, Borg said that unfortunately the price of electricity had increased due to the increase in oil prices.
However, asked whether he was convinced that electricity had increased due to international oil prices following a MaltaToday report exposing the actual decrease in refined fuel oil, Borg said “part” of the increase had been due to the increase in crude oil prices: “It must be said that 17 per cent increase on the electricity bill is capped at Lm5,000 for factories and hotels.”

Arthur Muscat (MEA) – Public holidays should have been cut long before
Arthur Muscat, the president of the Malta Employers Association, looks back at the MCESD discussions ruefully, saying the cut in public holidays should have happened long before, back during the budget in November 2004.
“The fact that it did not happen and discussions continued within the MCESD, has not increased nor decreased the urgency to address competitiveness… If there was a measure that was not going to affect the standard of living of workers, then that’s public holidays. This time, wages are not going to change. The standard of living is not going to change, and yet the discourse is that workers are taking up the burden.”
“Government based its proposals on much that was included in the report on competitiveness presented by the MCESD. The government was very reasonable in its proposals. It is a controlled document that does not irk many people. After last Thursday’s meeting, when we had seen that the packet was good for us employers, we realised that the government was still discussing with the unions.
“I don’t think there is any more room for discussion to see what has to be done. What has to be done is what is needed. It is not a question of inventing solutions. The solutions are already there, we have to see that they are applied.”
Muscat said the MEA was “absolutely of the opinion” that cutting down public holidays was not the only measure needed at the moment.
“In all the time we spent discussing the proposals given by the government, the public holidays issue was minimal. We dedicated time discussing some 17 measures presented by the government, which would have been put into force had we found agreement. However the fact there is no agreement on them does not mean the government is not going to put them into force.”
Muscat said when the government presented its final packet, employers had agreed with packet despite not having found all the proposals they wished for included in the packet. “We accepted it because we had to live with it.”
However, Muscat said that the employers’ associations had been given the impression that government’s plan had not been up for dissection, saying that they expected the government to proceed. “As employers, the problems facing the union right now are marginal for us. It is an expired debate. What we want to see is that government takes up this responsibility and to see what other measures will be implemented.
“It is important that the government’s packet will be taken up as a full packet. For example, the policy on wages is that increases are given as cash benefits unless there is an increase in GDP. For us this was a fundamental issue and cash payments were a fundamental feature of the proposals. There is nothing stopping the private sector industries negotiating collective agreements from giving cash payments now.”
Muscat told The Malta Financial and Business Times he lamented the media coverage given to the MCESD discussions, claiming it had been biased in favour of the unions. “All there was talk about was that workers were losing their holidays. If only we could see that the country is actually gaining eight extra productive days. Outside there is this attitude which is neither realistic nor mature, that is being fed by both the unions and the politicians. What we actually lose if we do not do anything about out problems looks like is not important enough. There is a media imbalance in this regard that keeps on fanning the resistance from people who do not want to understand.”

GWU remains opposed to public holidays measure
The General Workers’ Union is adopting a wait and see approach before deciding on what course of action to take over Government’s intent to go ahead with legislation amending the Public Holidays Act.
“We will wait for Government to legislate in Parliament and then act accordingly. We hope that Government does not make the mistake of pushing ahead with such a proposal,” GWU Secretary General Tony Zarb said yesterday.
The GWU is opposed to the measure that will prevent public holidays falling on the weekend from being added on to employees’ leave entitlement. “If Government legislates according to what the Prime Minister said on Saturday then we do not agree with that position,” Zarb said.
On Saturday Prime Minister Lawrence Gonzi said Government will be amending the Public Holidays Act in such a way as to change the definition of a public holiday. It is unclear whether Government’s proposal will also mean that employees who work on a public holiday will lose the premium benefit normally paid out.
Zarb also shot down Government’s projection that such a measure will increase productivity by 1.5 to two per cent. “Government’s own workings were done in a hurry. Our experts have described them as being done by a first year university student. We have presented Government’s workings to the technical people at the MCESD and we are still awaiting their comments,” Zarb said.
On the dissolution of the unions’ united front Zarb insisted it was a positive experience and the GWU was ready to continue discussing “with those unions that are ready to continue discussions.”

UHM to convene general council
The UHM will tomorrow convene its general council to evaluate the situation concerning the budget measure to remove public holidays falling on a weekend. “We will pronounce our position after the general council,” UHM Secretary General Gejtu Vella told The Malta Financial and Business Times yesterday.
Unions are caught between two stools as Government intends going ahead with the budget measure on public holidays after talks on a social pact failed when unions could not agree to a common position at the eleventh hour.
“I am disappointed that after all the effort that went into reaching a wide consensus on the national pact we did not manage and we are giving Government the opportunity to take measures which are harder than what was being contemplated. Those unions who said ‘no’ to the social pact will have to answer for their actions,” Vella said.
Vella reiterated he preferred productivity boosting measures that were agreed to by everyone concerned rather than allowing politicians to run roughshod over workers.
“Irrespective of whether the growth in productivity is one, two or even three per cent, economists are telling us that the country has problems and solutions need to be found. The UHM prefers measures agreed to by everyone rather than allowing politicians to run roughshod over employees,” Vella said.
The unity displayed by all unions prior to last Saturday’s impasse was a positive experience for Vella. “I hope such collective efforts continue and are allowed to come to fruition,” Vella said.

We cut our nose off to spite our face – Bencini
Malta Union of Teachers President John Bencini believes there are no winners after unions failed to agree on a common position as regards the social pact.
“It is unfortunate because we could have lived with the national pact as negotiated. The differences were very minimal. From 16 clauses presented by the Prime Minister there were only two that were a bone of contention for one of the unions. We cut our nose off to spite our face,” Bencini told The Malta Financial and Business Times yesterday.
The MUT chief said unions have given Government the carte blanche to go ahead with the public holidays measure, which is worse off than what was being discussed in the social pact.
Asked what the union’s position will be now that agreement on a social pact is not possible, Bencini said the MUT will not be pronouncing itself on the issue. “Government has the right to legislate,” he said.
Bencini added that there was still scope for a common front between unions. “It’s not as if the world has collapsed. There are three important national issues at stake in the months to come – pensions, health reform and the Chalmers report on higher education – were it would be pertinent for unions to come together. Before ending the meeting between us on Saturday two points were stressed; this was just a start and we have to be more careful on the ethical standards we adopt in our (unions) relations with one another,” Bencini said.

The Malta Financial & Business Times is published weekly on Wednesdays.
Our website is updated weekly on Thursdays at 15.00CET
Copyright © Newsworks Ltd., Malta
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
Tel: (356) 2138 2741 | Fax: (356) 2138 5075 | E-mail