Updated 4.30pm, adds comments from Chamber of Commerce

Paternity and parental leave should be remunerated by the government because it is a social service, according to employers and small and medium enterprises.

The extension of paternity leave to 10 days, and two months paid parental leave for each parent until their child turns eight was given the green light by the European Parliament on Thursday.

These benefits form part of the Work-Life Balance directive, which was negotiated by Nationalist MEP David Casa.

When it was proposed, the directive divided opinion.

Contacted following the European Parliament's vote, director general Joseph Farrugia said the Malta Employers’ Association's stand on such issues was based on the fundamental principle that social services were paid by the government not employers.

Mr Farrugia was asked to comment about the previously unpaid four months parental leave which will now have to be paid.

Employers paid wages and salaries through the value-added generated by the company or organisation. Social services were paid from tax revenue, he said.

Asked what he thinks about the fact that parental leave is non-transferrable, he said that family responsibilities should be shared by both parents, and the sharing of parental leave was a step in this direction.

Read: Use surplus to fund paternity leave, Casa says

“This is a clear sign to society as a whole. We cannot expect women to carry the burden of employment and family commitments.

“In spite of challenges which such a change may present on many levels, this is the way to go.”

The Chamber for Small and Medium Enterprises (GRTU) agrees with the non-transferrable concept and believes it was important for employees and employers.

"The sharing of family responsibilities should be encouraged further because the more parents move towards the equal sharing of parental roles the more women will be in a position to be at work and maintain their careers. This would have a positive impact on the economy and employers," CEO Abigail Mamo said.

'We are against a one-size-fits-all approach'

However, GRTU also believes that parental leave pay should be covered by the state.

The directive introduces the concept of payment but leaves the amounts and method of remuneration in the hands of member states.

The payment will make feasible an already existing right, and therefore more frequently taken up, according to Ms Mamo.

"From a small business perspective, one needs to appreciate that the staff complement is very limited. Not having a person at work for months is a significant stretch of time and sharing the workload and making up for that absence is a very difficult task.

"We believe the government must do its bit and contribute to this end through paying the parental leave itself. It is, after all, a social measure and such measures should be state funded." 

The government must do its bit and contribute

In January, Ms Mamo had told the Times of Malta that introducing paternity leave at European level was not considered appropriate and the GRTU disagreed with it. 

Does the GRTU still hold the same position?

"We are against a one-size-fits-all approach and unfortunately this is the way the EU has legislated. Such discussions and decisions are better catered for at member state level, because at national level we can adapt based on our countries’ circumstance, being in a position to move forward and not shock the system," she said.

Malta, according to Ms Mamo, was the member state that was currently furthest from the 10 days paternity leave as imposed by the directive, and this should have been taken into consideration.

'Take all necessary precautions and safeguards' - Chamber

The Chamber of Commerce called on the government to put all the needed precautions in place and safeguard sustainable employment once the directive is transposed into local legislation.

Chamber director general Kevin Borg said the chamber, through the Malta Business Bureau, had played a key role during the consultation process related to the directive.

It had prepared an extensively researched dossier to mitigate the potential impacts of the proposal on European businesses, especially SMEs.

In the report, which was submitted to European Institutions, the Chamber called for a degree of flexibility, and for member states to decide on the parental leave entitlement.

“The Malta Chamber welcomes the fact that this level of subsidiarity has been granted and remains of the belief that such parental leave should be paid by the government, not the employer.”

The Chamber was fully in favour of the introduction of family friendly measures, but the cost of these could not be borne by business.

“In an economic reality where labour costs are increasing faster than productivity levels, further labour related burdens would continue to jeopardise the competitiveness and sustainability of businesses in a price-sensitive international market,” he added.

The ball was now in Malta’s court and in the interest of jobs, the Chamber reiterated its call to the government to keep international cost competitiveness in high priority, Mr Borg said.