New vacation leave regulations brought into force through legal notices a few days before the feast of Santa Marija, when most enterprises would be on their annual shut down, raised issues that need to be addressed to ensure any rigidity in employment rules does not discourage the creation of new jobs. This may seem unlikely when Malta is experiencing almost full employment but when the economic cycle changes, reversing rigid regulations may prove difficult.
The first contentious element in the introduction of the new vacation leave regulations relates to the degree of consultation the government had with the social partners. The Malta Employers Association’s director general, Joe Farrugia, was surprised with the changes. The General Workers’ Union insisted the measures were debated as part of a broader set of proposals in the Employment Relations Board.
However, four employer associations accuse the government of introducing the changes “by stealth”. They threatened to boycott meetings of the Employment Relations Board and the government reacted by suspending the new regulations as “a sign of goodwill” and to allow further discussion.
Trade unions reacted somewhat differently to the changes. The GWU praised the government move and expressed satisfaction for “continuously being consulted by the government authorities and national organisations”. The UĦM Voice of the Workers noted that the “regulations seemed to be skewed towards workers”, insisting no proper consultation took place.
One of the most controversial aspects of the new regulations is that annual leave entitlement will accrue even when the employee is on maternity, sickness or injury leave and when on unpaid leave. Understandably, employers feel this is a step too far in improving employees’ rights as it would increase costs and make some businesses less competitive.
Industrial relations lawyer Ian Spiteri Bailey, expressed concern about a new rule, which lays down that once granted, leave cannot be revoked under no circumstances whatsoever. While workers rightly expect to be granted leave in exceptional circumstances, employers who face special business circumstances should have the same right too. What is an employer supposed to do if half of the labour force is affected by a flu epidemic when the rest are planning to take their agreed vacation leave?
The shutdown leave regulation is a more reasonable proposition. Employers can now utilise up to 12 working days from the annual leave entitlement for the shutdown period. In this way, employees can utilise their leave entitlement as suits their circumstances. Employers understandably object to the government’s pledge to compensate public holidays falling on a weekend with an additional day of leave. Malta already has one of the most numerous lists of public holidays in Europe. Extending that list is unlikely to do local businesses any good.
No party sitting at the table in an Employment Relations Board meeting should be faced again with a fait accompli when it comes to introducing employment conditions regulations. Some aspects of the new regulations are arguably desirable and in line with industrial relations developments in Europe. But putting employers at a distinct disadvantage against their international competitors is an economic risk to be avoided.
A fresh round of talks between social partners will, hopefully, lead to a solution that will benefit employees while not harming competitiveness.
This is a Times of Malta print editorial