06 April 2005

The Web

Balancing the labour market
Education, Youth and Employment Minister Dr Louis Galea speaks at the last week’s Malta Employers Association seminar on ‘Employment Issues – EU Developments and Implications’ and delves into achieving the right balance between having regulations to maintain labour market flexibility while encouraging job creation and removing barriers to employment

Whilst great progress has been achieved in ensuring a full democratic environment, which however we cannot ever take fore granted, our more immediate concerns now are how to continue with the improvement of our levels of prosperity and social justice. Prosperity and social justice are lofty aims which cannot be achieved in the absence of productive and competitive employment. The availability of more and better jobs is not an easy challenge for any government to overcome. This becomes more problematic in a scenario where external pressures brought about by globalisation combine with key internal issues, such as restructuring in the economic and social fields and the efforts to bring about a culture and practice change in the way we deal with these urgent issues. The result is a highly intricate picture which demands considerable attention both to view it in its totality as well as to enable its finer points to be realised and appreciated. All this is happening at a time when Malta is approaching the first anniversary of its EU membership.
The targets set out in the Lisbon Agenda and the National Action Plan aimed at having a sufficiently broad-based, mobile, skilled and adequately paid labour force have been discussed at length. Many Maltese employers are actively searching, seizing and exploiting every available opportunity, and are adapting to ever changing circumstances to retain their competitiveness in order to flourish.
Now, more than ever before, the Maltese labour market needs to be flexible and adaptable. An environment needs to be created and sustained wherein enterprises can prosper and every employee can reach his or her maximum potential. There is no other option but productive and competitive employment as the best ways to guard against social exclusion and to ensure a thriving economy that is vital in achieving social justice.
The EU employment Acquis ensures that a common set of employment standards apply throughout the Union. This harmonisation of employment rights and obligations is evidenced by directives granting certain protections to employees in the event of transfer of business or collective redundancies and those giving the rights for information and consultation to employees. Of course, the various directives in the employment Acquis should not be viewed only from this perspective. Other Directives are aimed at improving the quality of life of the worker by regulating the work-life balance [e.g. parental leave, organisation of working time], health and safety, and the various anti-discrimination directives [e.g. part-time work, equal treatment]. These directives explicitly recognise the importance that such issues have in the full development of the worker as a person and this contributes substantially in having a more productive workforce.
The EU Acquis is not composed solely of Directives and Regulations. A directive’s particular principles, clauses or points of law are always subject to the overriding interpretation of the European Court of Justice. Such case-law can indeed have profound implications on the directive’s implementation.
Government is committed to policies which encourage competitiveness, flexibility and a broader choice in the workplace through the adoption of family friendly working conditions. This enhances the balance between work and family commitments. Other key policies include the promotion of gender equality, the avoidance of all forms of discrimination at the workplace, and a commitment to provide retraining for employees to allow them to remain employable throughout their working life. We need to be in a situation where the worker is guaranteed employability throughout his or her working life rather than an employee having a guarantee of a job for life.
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The right balance between having regulations which maintain labour market flexibility whilst at the same time encouraging job creation and removing barriers to employment, is not easy to find. There is no doubt that the right level of regulation does improve efficiency and increases fairness and safety in the workplace whilst at the same time making the workplace more accessible to all. Maltese legislation aimed at facilitating employment and thus fostering inclusion includes the Gender Equality Act, the Employment and Training Services Act, and the Equal Opportunities (Persons with Disability) Act. In addition, a new Employment and Industrial Relations law was enacted in December 2002 and since then various directives have been transposed and came into effect as part of Malta’s accession obligations.
Another policy to which government is committed, namely that of encouraging a tripartite approach in the industrial relations field, is enshrined within the new employment legislation. It is pertinent to point out that the Act established the Employment Relations Board as a tripartite forum for discussing and advising the Minister responsible for industrial relations on any matter relating to employment. I am pleased to note that this Board, on which the MEA is ably represented by its Director General, Joe Farrugia, has considered and advised me and my predecessor on all the regulations transposing the Employment Acquis. The valid suggestions made by the Board have always been accepted by the Government.
As a member state Malta is now responsible for the proper transposition and implementation of the EU Acquis adopted up to accession. We must also contribute to the process of preparation of new laws, and to the ongoing review of adopted legislation. This is done at the political level, in the various Council and other bilateral meetings which other Ministers and I attend, and also through the Maltese Members in the European Parliament. There is also the contribution of our representatives on various expert working groups held under the auspices of the Commission. Each member state has different economic, social and political realities, and the potential impact of how any proposed legislation can affect the individual state has to be considered in parallel with its impact on the Union as a whole.
I would like to give a practical example of how this complicated process of consultation and negotiations amongst the various European institutions and the member states is working in practice by referring to the controversial issue of working time.
When in 1996 this directive came into force, it carried a clause stating that the Commission had to report to the European Parliament on its application every 5 years. After extensive consultation with the social partners within the Employment Relations Board, Malta transposed this directive as the Organisation of Working time Regulations, 2004, in April last year. This directive as transposed provides for prescribed minimum rest breaks, daily and weekly rest. It also provides for a maximum weekly working time, averaged over a reference period of 17 weeks or of 1year, of 48 hours. A worker can, if he so chooses, work more than a weekly average of 48 hours, the so-called opt-out clause.
In 2000, the ECJ delivered the SIMAP Judgement, reconfirmed in 2003 by the Jaeger Judgement, which in essence stated that all time spent at work, including on-call time at the workplace, was working time. This had a significant impact on the way the opt-out was considered by a number of member states, as in some countries such as Spain and Germany, time spent on-call at the workplace was not considered as working time in its totality. In Malta, however, all time spent at work is considered as working time and Malta has thus been in conformity with the ECJ Judgements.
In December 2003, the Commission sent a Communication to the Council, European Parliament and ECOSOC on the re-examination of the Directive. It also consulted the European social partners. In February 2004 the European Parliament adopted a resolution called for a revision of the directive with a view to the phasing out of the individual opt-out.
In September 2004, the Commission presented a proposal to amend the working time directive to the European Parliament. This proposed that the opt-out be retained only under very strict conditions.
The opt-out issue has been widely discussed in Malta and the position of the social partners is well known. Apart form the previously mentioned discussion at the Employment Relations Board level, Parliament’s Social Affairs Committee also discussed and reviewed Malta’s position on this issue last month.
Malta has, since achieving membership, campaigned vigorously at all levels together with other member states including the UK to retain the opt-out. There are a number of reasons for this position including that it should be the worker alone who should retain the right to freely choose how much he or she works, subject only to safeguarding issues related to health and safety. We feel that if any potential for abuse of the system exists, it makes more sense to try to reduce the abuse rather than to eliminate an ingredient of flexibility in the system.
Member states are divided at the moment on the Commission’s proposal. Some want the outright abolition of the opt-out combining this with a re-definition of on-call time, others, including Malta, favour its retention, whilst a third group has an intermediate approach preferring to retain the opt-out for a few years. None of the groups has the majority required under the qualified majority voting procedure which applies in the case of this directive.
Initial indications from the European Parliament would suggest that Parliament considers that the Commission’s proposal does not go far enough to remove the opt-out. Developments on this matter are ongoing and we await the official European Parliament Report on this matter. This will then be taken up again at the technical and political levels in continuing efforts to find an equitable solution which address the concerns and expectations of member states.
This example illustrates the difficulties, complexities and protracted nature of the discussions which take place in preparing a directive. This is indeed a case where it is important to be able to make one’s voice heard from the inside. Malta will continue to do its best to see that its interests are safeguarded.
The importance of having a solid legal framework in the employment sector cannot be underestimated and the EU directives, as incorporated into Maltese Law, address this issue. Nevertheless, a solid legal framework on its own may prove insufficient in realising the creation of jobs as well as social justice and adequate protection in employment. There are various other measures which need to be taken at both government and NGO level, particularly in the area of equal treatment. This is especially so with respect to the education of our current and future workers in order to change any prevailing negative attitudes. In this regard, this Seminar is a welcome step in this direction and I would like to commend the MEA for this initiative.
It is as important however, that each one of us recognises that we have reciprocal rights and duties and that it is our responsibility as individuals to do what we can to ensure a socially just and inclusive society which really respects the individual and the diversity in each individual. The EU’s catchphrase ‘Unity through diversity’ has to be seen to begin at home!

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