03 May 2006

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Business Today

When the going gets tough, the brain gets going

Navigating the complex waters of trade unionism in a changing economic environment dominated by globalisation has become a job for strategists and tacticians, those who utilise their brain at the negotiating table.
This is the assessment UHM Secretary General Gejtu Vella gives of the trade union movement in today’s circumstances. He relegates the traditional union-led fight between social classes to the past and insists that structured social dialogue needs to replace the strong-man tactics of the past.
“Instead of using our muscle, as we used to do in the past, unions now have to be able to use their brains, adopt strategies and modern techniques to protect workers at the negotiating table,” Vella says.

In a work environment that has changed, with more people employed on contract, shifting jobs every few years and with places of work seeing smaller aggregations of employees, what relevance do unions have?
Unions are relevant and a very important cog in the structured social dialogue between governments, employers and employee representatives. Today, we do not speak anymore of the fight between social classes. The discourse that pitted ‘us’ against ‘them’ has to change within the wider European context. Even the ILO is speaking of building bridges between unions, governments and employers.
We have to appreciate that a globalised economy has transformed the nature of employment. Teleworking, home-based employment, flexi-time are only but some of the changes the new economy has brought about. These are realities that we have to embrace.
Instead of using our muscle, as we used to do in the past, unions now have to be able to use their brains, adopt strategies and modern techniques to protect workers at the negotiating table.

Globalisation is one of the trade union movement’s biggest challenges. Companies may decide to move from affluent western countries to other parts of the world where the cost of production is very low particularly because of lower wages and very limited employee rights. In these circumstances how can a Maltese union protect its members?
If we continue using the methodology adopted by unions in the sixties, seventies and eighties, to protect people at their place of work, we are in for a big failure. To protect the interests of our employees we have to use different instruments; education and training that empowers people. We have to foster a situation whereby more investment is directed towards employee training so that people become employable in different circumstances.
These social and economic developments are occurring all over the world and Malta is not excluded.
Whoever speaks as if globalisation will not have an impact on Malta is mistaken. It is a phenomenon that has both its advantages and disadvantages and as trade unions we have to see how we can use globalisation to the advantage of our members. We will not stop companies that decide to move over to other countries because of cheaper labour but we can do much more to attract companies that have a higher value added. But to undergo this shift we need to have a well-trained and educated human resource.

You say unions are still relevant but trade union membership has been on a constant decline for years. How do you interpret this reality?
That trade union membership is on a decline is an assertion. The UHM, up to this very day, has witnessed a constant increase in membership. We were founded 40 years ago and our membership has grown, at a different pace in different circumstances, but nonetheless it has grown.

It might be a shift of members from other unions to yours but global figures show that trade union membership is falling…
The number of members in trade unions is still very strong. It is important to note that primarily unions offer their services to their members but they also render a service on a national basis. When the UHM takes a decision and pronounces itself on a national level it would be protecting the interests of its members but it will also be offering an important service to the community at large.
But I must stress that the UHM’s membership has increased consistently. The UHM has earned credibility because it not only defends the interests of its members but also keeps in mind the wider objective of where it wants the country as a whole to go.
We have proposed a number of initiatives at a national level such as the social pact. And today I am glad that others have picked up the discourse and are talking about the need of a ‘national plan’ to move forward.
Unions have to consistently ask what needs to be done to improve the standard of living of this country as a whole.

The Malta Council for Social and Economic Development (MCESD) brings together all social partners and yet the individual parties around the table are more interested in protecting their members’ narrow interest rather than looking at the big picture. It is fine to talk of a new way of doing things but if the UHM had to ask its members to shoulder the burden of sacrifices required because of the national interest, would it do it?
We are more than ready. Indeed we have already done it. I had proposed to the UHM members the adoption of a social pact. The UHM published its proposals black on white in a social pact. We said that this country needed to have a broad agreement between all stakeholders to take a number of measures that would enable a revival of the economy over a period of years.
This country needs to generate more wealth, have an economy that is growing at four per cent. If we do not create more wealth, neither employees nor employers will see their quality of life improve.
When the discussions on the social pact failed government adopted the public holiday measure. But is that what the country needed? That was just lipstick, a cosmetic measure. The country needs a range of measures that are agreed to between all parties.
The UHM speaks clearly to its members. We do not promise protection where it is almost impossible to do so. The worst part of the job of any unionist is to address workers whose job is on the line. What protection can a union offer its members when the company they work for has gone bankrupt or is moving to another country?
The protection we can give is empowerment; giving employees the chance to find an alternative job because they are well-educated and trained. But do all constituted bodies speak this way? Or are there organisations that still talk of protecting their members when this protection can never exist?

Are you referring to the General Workers’ Union?
I am referring to all those organisations, including political parties that continue promising things that cannot materialise. Malta needs some straight talk. The international economy is changing at a rapid pace and yet you still get politicians speaking as if they can protect employees from change.
We need to identify the assets of this country to attract investment. Very often bureaucracy is blamed for stifling investment but we need to start talking nuts and bolts; who is responsible, where is it going wrong, what can we do differently?
Many times in this country we are experts at talking platitudes but when it boils down to the nitty gritty, we fail because of the resistance to change.

Buoyed by statistics that showed economic growth in 2005, just over a month ago government said there was an economic turnaround. Is a social pact still necessary?
Yes. A 2.5 per cent increase in GDP is good but it needs to be put in perspective. In the previous five years the economy either shrunk or remained flat. Malta needs to experience growth at between 3.5 and four per cent every year to generate jobs and ensure a higher standard of living for everyone. We are not home and dry with 2.5 per cent growth. We need constant economic growth over a period of years.
We need to explain this to the people. We cannot promise people heaven on earth if we don’t have decent economic growth. And to achieve this, a number of measures need to be taken.
There are certain things that require changing which are self-inflicted. As almost happens always, measures were introduced in the past as if they were here to stay forever. We have to realise change is ongoing and every so often measures need to be revised.
Look at pension reform. The current model was introduced in 1979. It was an important development but it was never revised along the years to reflect demographic, social and economic changes. Now we are speaking of a big bang approach to pension reform when it need not be that way. And God forbid we introduce the new reform and forget about it altogether without constant revisions every few years.

One of the measures introduced in the past that has remained as if it were forever are the summer half days for government employees. Introduced at a time when airconditioning equipment did not exist, the concept does not make sense anymore today. Don’t you think it is time to revise summer half days as well?
When summer approaches the issue of half days always comes to the surface but unfortunately the discourse is dominated by blanket statements that do not reflect reality. Over a span of years, the working hours of various government departments have changed without a lot of fanfare so that customers can be better served during the summer months.
We also have to see whether customers would be willing to go to a department in the afternoon sun. But in many areas summer days have been removed.

One of the issues that has come to the fore over recent years is the need to encourage more women to join the productive labour market. Yet, little has been done to enable this development take off the ground. What is the problem?
The primary problem is that of women who at one point in time formed part of the job market but then, for some reason or another decided to stop. By not encouraging these women to return back to work the country is simply throwing away an educated and trained human resource.
There are two things that can encourage these women to return to the labour market: a taxation system that is advantageous and encourage family-friendly policies at the place of work.
But to adopt the latter we cannot have places of work that operate rigidly between 8am and 5pm. We need to have flexible working hours. In Europe there is a lot of talk about flexi-time and its benefits. A recent EU report suggests that the rate of productivity at those places of work that allow flexi-time is higher than that of other work places that work within rigid hours.
But Maltese employers still frown upon the suggestion of teleworking because they believe that employees will not be giving their full day’s job at home. What employers need to look at is the output and not the time when an employee would have worked on the job. It requires a mentality change.

But is it a question of employers not trusting their employees or is it a cost problem?
It is a problem of mistrust but much as everybody is afraid of change even entrepreneurs fear change. They try not to encourage flexi-time or teleworking because it also requires a change in the way the whole system is managed.
Admittedly, managing different working hours can be a laborious job for employers but today there are computer systems and electronic means that facilitate such management.
We cannot remain at a standstill because the moment we do so we will start falling back.

Is government a model employer when it comes to encouraging women to stay in the workforce?
Government has taken a number of pro-active measures in the civil service to encourage women to continue working and is very open to suggestions in individual cases. However, there is a problem with the different authorities and agencies that fall outside the central structure of the civil service. They are very reluctant to introduce family-friendly policies.

The civil service suffers from a lack of middle management and yet the system is too rigid to allow individuals to be given promotions. Isn’t it time to change the inflexible structure?
The civil service is the administrative arm that implements the decisions taken by politicians. One has to be careful not to intertwine the two. Politicians decide but the civil service implements. Unfortunately, many a time the civil service is pictured as if it is the executive arm taking decisions and implementing them. This is not the case.
Talking about middle management, today there are openings that allow people to be given incentives. But any opening has to be within a structure. If we allow a free for all, the civil service risks changing its method of operation every time there is a change in government. The civil service needs to operate within a structure and retain its implementation role.

But can the structure be flexible to allow more leeway for individuals to be incentivised?
If the structure is flexible it may lead to a situation whereby individuals are advantaged or disadvantaged for reasons unrelated to work. The work of the civil service has to remain its primary objective.
The civil service is an important sector in this country. Without the civil service, the country would come to a standstill.

It is also a major cost for public funds…
The civil service should not be mixed up with the public sector, which is a much wider category incorporating even those employees with government agencies. The civil service employs between 3,000 and 4,000 people. These are the people responsible for our bureaucracy. Their job is to keep the country running.

Various constituted bodies, including the UHM, criticise government bureaucracy as a stumbling block for investment. You represent those people who are responsible for this bureaucracy. Where is this country going wrong?
Bureaucracy needs to be guided by implementing charters in every department that outline the timeframes within which a client should be able to receive a reply or have the service delivered.

When government introduced the 55 per cent surcharge there was some grumbling from constituted bodies but no one, apart from the GWU, protested about the mechanism adopted by government. Today, criticism abounds. Was the UHM sleeping in the meantime?
It is unfair to say that we were sleeping. The UHM had warned that such a surcharge would have an impact on the purchasing power of people.
But the reality is that the price of oil is something we have no control over.
There are two issues that need to be addressed. At a political level a decision has to be taken over hedging. Is it the right mechanism? Why was it stopped? Will it give us more stability? These are questions that require political answers based on technical expertise.
But the whole issue is a major dilemma because somebody has to pay for the costs incurred by Enemalta. It is either individuals through their electricity bill or else through general taxation. Either way it is taxpayers who will be footing the bill.
The second issue is energy conservation. People need to become more energy conscious at home. We need to have an educational campaign.

Two years after membership how do you describe the experience so far?
EU membership is a learning curve. But now we have the money from the EU and we have to invest it wisely. The UHM is proposing investing the cash into five broad areas: human resources development, strengthening the country’s competitiveness, the development of transport and environmental infrastructure, strengthening of the tourism sector and programmes aimed at non-governmental organisations.
These categories reflect the various areas which the UHM tackled in its social pact.
But there is another issue that perturbs us as a union. Before joining the EU this country had a negotiating structure, MEUSAC, that enabled all social partners come together and discuss every detail of Malta’s negotiating package. It was an open line of communication between government and all those organisations that were interested in EU membership.
Unfortunately, after membership MEUSAC was disbanded and ever since the EU has become the sole domain of politicians. People and organisations no longer feel part of the EU project and it is understandable that this situation leads to disenchantment with membership.
The UHM has been insisting on the creation of a structure that maintains an open line of communication between government and organisations. In the absence of this, government will simply move ahead on its own accord and detach itself from the people. I cannot understand this government on the issue because it constantly proclaims it is a government of dialogue but continuous to resist the creation of such a forum, or rather fails to find the time to set it up.

Gejtu Vella was interviewed by Kurt Sansone

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