Updated 5.20 with A4E reaction

Small and medium enterprises have shot down an EU directive through which men will benefit from 10 days of paternity leave while employers said they will not fork out a cent.

The European Parliament and Council of Ministers have agreed on a new Work Life Balance Directive, which will, among others, introduce a 10-day paternity leave remunerated at not less than the national sick pay level – up from the current one-day allowance.

Read: New rights for parents and carers agreed upon in European directive

Reacting, the Chamber for Small and Medium Enterprises (GRTU) said it would be better for member states to assess the most effective way to increase women’s participation in the labour market as well as to promote equal participation of women and men in caring parental tasks. 

Introducing paternity leave at European level was not considered appropriate and the GRTU disagreed with it, CEO Abigail Mamo told the Times of Malta. 

While the EU pushed for harmonisation on a topic of extreme diversity, for Malta this was considered a big step not because employers were against the participation of fathers but because human resources “are what they are and small and micro companies will find this most burdensome”.

To put things into perspective, Ms Mamo said that in 2017, Malta had 7,712 births. This meant that from 7,712 extra days of birth leave, Malta would see an overnight increase to 77,120 extra days of leave. 

The figure, she said, was astronomical.

“The absence of these employees from work already creates a big difficulty for businesses, even if one had to exclude the cost. We reiterate that in the context of already scarce human resources, this is difficult news to deal with.”

The absence of these employees from work already creates a big difficulty

The level of payment for any type of leave arrangement should not be at the European level to decide, she said, adding that the competence of member states and social partners needed to be respected. 

Apart from paternity leave, the new directive, led and negotiated by Maltese MEP David Casa, will introduce new rights such as flexible working arrangements and a five-day carers leave for those who need to take care of relatives.

The next step is for the Parliament’s plenary to vote on the final agreement in the coming weeks. After that, the directive should start being adopted by governments in all EU states.

According to the Malta Employers’ Association, providing better options when combining work and family life was based on the belief that such entitlements would result in net economic benefits even if they entailed an element of disruption at the workplace. 

“Theoretically it should lead to a higher participation rate and better retention of skilled employees which is, of course, beneficial to companies,” director Joseph Farrugia said. 

However, he pointed out that the agreement failed to specify who would be funding these measures, as it has left it up to member states to decide. 

“The MEA shall strongly resist any further financial burdens on employers, and insist that, in line with many other countries, it is government who has to finance such social services.”

Meanwhile, the Malta Chamber and the Malta Hotels and Restaurants Association urged the government to consult extensively with employer organisations to avoid additional costs on businesses.

Read: Employers don't want workers getting any more time off

The Malta Business Bureau – the EU research and advisory arm of the two – lobbied actively in Brussels in order to reduce the impact on business operators over the implementation of the proposed directive.

The MBB, while cautious on the directive itself, welcomed the compromise deal that would allow member states to determine the level of remuneration for employees for parental and carers’ leave in their own labour market, rather than this being set by the EU. 

The directive also determined that paternity leave will be paid at not less than the level of sick leave of the respective member state. 

“In this case, subsidiarity prevailed, whereby decisions will be taken closer to citizens and reflect national economic realities,” MBB president Simon De Cesare said.

Look at positive long-term effect - Casa 

Nationalist MEP David Casa, said while he understood the business community being sceptical about providing additional rights to parents the issue being discussed is 10 days of leave for fathers when a child is born.

"From the perspective of the employee this constitutes a right that on average would be used once or twice during these crucial times in a worker’s life. In comparison to far more generous parental rights in many member states, for Malta, implementing this minimum standard, is a step in the right direction."

The directive does not establish how the leave is paid because this would go beyond the EP's competence.

"My strong appeal to the Maltese government is to ensure that the financial cost of these measures does not fall on business. But I also appeal to the business community to take account of the positive long-term impact of the directive."

Mr Casa said the higher than average gap in Malta means the country has a lot to gain than other member states through a reduction in this gap and by assisting women in reaching their full potential in the workplace.

"I look forward to discussing more precisely what has been negotiated in this directive, and the positive impact it will have, together with the business community as well as unions in the coming days and weeks."

A good move for paternity rights - A4E

The Association for Equality welcomed the new EU directive, saying it was a positive step towards ensuring more equality for fathers. 

"The existing two-day paternity leave is a huge injustice and 10 days is the least that fathers should be granted," the A4E said. 

Ensuring that half of parental leave would be paid was also a positive step, they said, especially if fathers received their full salary during this time. 

"A4E urges the government to move towards the swift transposition of this directive and hopes that payment levels will be high," the organisation said. 

It urged the government to step in and invest to ensure the directive was fully implemented.

"Payment for these family related leaves should not fall on the shoulders of employers but should be seen as an investment in families by government – especially in a context of falling birth rates, which are below the replacement rate," A4E said.