Workers to get bonus as shipyard exceeds targets

Shipyard workers are to get a performance bonus of Lm70 to Lm100 each next month after the company's financial performance superseded budget targets during the first three months of the year, Malta Shipyards chairman John Cassar White said yesterday.

According to the performance-related pay (PRP) scheme agreed by the government and the General Workers' Union in the collective agreement of November 2003, workers are to receive a quarter of the additional profits achieved through a cut in labour costs, as turnover climbed beyond budget targets during the first quarter of the year.

Speaking during a press conference, the chairman said workers will be sharing Lm157,087 using a weighting system that divides the workforce into management, supervision, administration and industrial grades.

The workers are expected to receive the first performance related pay cheque on August 26.

Mr Cassar White said workers would, in this way, be remunerated for being more efficient, adding that PRP is granted only if financial results are better than the forecast.

The shipyards registered a turnover of Lm9.74 million between January and June this year, which is Lm1.6 million more than the forecast and more than double the turnover for the same period last year.

The company's gross profit had climbed from Lm2.25 million registered last year to Lm3 million, while net losses for the same period had gone down from Lm4.3 million in 2004 to Lm3.4 million this year, the shipyard said.

Mr Cassar White said the losses were being slashed in line with the targets set each year since 2002 when the losses surpassed Lm20 million.

By last year, losses were drastically reduced to Lm10 million following the restructuring programme undertaken by the company involving changes in work practices, redundancies and the relocation of workers.

Mr Cassar White said the reduction of losses will continue until 2008, when it was planned that the losses would become negligible.

"It is a difficult road ahead because we are facing competition from low-cost shipyards in the Far East, the Black Sea and the Baltic States," the chairman said.

He made it clear that the labour reforms inherent in the collective agreement, which included the workers' capability to do different jobs through cross training and new shift patterns, had to be implemented if Malta Shipyards was to win contracts and compete internationally.

Investments Minister Austin Gatt said the PRP proved that rewarding workers for increased productivity, as against traditional wage increases, worked.

"This is not easy for people to accept because everyone prefers a pay rise. The government cannot but tie any increase to productivity and financial performances in all the companies that undergo restructuring," the minister added.

Malta Shipyards could no longer fly the flag of cheap labour to win contracts. It could only compete through flexibility and efficiency, he said.

"We want Maltese wages to compare with those of German and British shipwrights," Dr Gatt said.

A number of pending issues had been cleared with the GWU and the atmosphere at the shipyards had improved, Dr Gatt said.

It had been agreed that workers would get an extra 50c a week if all the reforms agreed with the union were implemented. So far, however, several of those measures had still not come into force, Dr Gatt said.

Speaking to The Times, GWU general secretary Tony Zarb expressed satisfaction that the workers would receive the performance-related pay.

"The performance bonuses show that the shipyards are facing a brighter future thanks to the reform in which the union is a main player," Mr Zarb said.

Asked about the 50c per week increment, Mr Zarb said the company should give the wage rise now because the implementation of the pending reforms did not depend on the workers.