The Maltese government has introduced new conditions for employers who win government contracts. The measures to combat precarious work have been particularly welcomed by the General Workers’ Union which has been campaigning for some time for tighter regulation of government contractors. Employers, however, say the government has not consulted them properly, and the strict new rules will damage Malta’s private sector, particularly small and medium-sized enterprises.
Background
Following the intensive and sustained campaign waged by Malta’s General Workers’ Union (GWU) against precarious and atypical work (MT1305019I), the Office of the Maltese Prime Minister issued a number of mandatory conditions for all government contracts. These conditions, which came into force on 1 July 2013, also apply to current contracts that may be terminated if work practices do not conform to the new conditions.
The new government contract conditions stipulate that:
- services provided by companies that have won government contracts will not be subcontracted to third parties;
- work will be done only by people directly employed by the contract-holder, rather than by other workers officially classed as self-employed;
- all employees of the contract-holder, whether working directly on the government contract or not, must have a written employment contract and be registered with the Employment and Training Corporation (ETC);
- when a contract is awarded, the tenderer must provide a list of employees who will be delivering services to the contracting authority, and must make copies of employees’ employment contracts available for inspection;
- all employees are to be given a payslip that details wages, hours worked, any overtime, Sunday or public holiday work, the number of hours’ holiday or sick leave, a breakdown of bonuses and allowances, and any deductions such as social security contributions and income tax;
- wages must be paid directly into the employee’s bank account;
- copies of detailed payslips and company bank statements showing wage payments must be available for inspection when required by the Director of Industrial and Employment Relations;
- in tender proposals involving the provision of employees’ services, contractors must be clear about the minimum wage being paid to workers, and where tenderers are asked to estimate the total cost of a contract, they must also provide a breakdown of costs that makes it clear what their workers will be paid;
- guidance about the hourly wage for the work in the specific sector being tendered for will be sought from the Department of Industrial and Employment Relations (DIER) by the authority putting a government contract out to tender.
Social partners’ views
The GWU Secretary General, Tony Zarb, said that following the intensive campaign waged by his union, he was satisfied by the concrete measures that have been taken to combat precarious work.
A study commissioned by the GWU, based on interviews with unions and employers, suggested that around 18,800 employees have precarious working conditions, 12% of the workforce. Forum Unions Malta (ForUM), a loose confederation of unions that mainly represents professionals such as university lecturers, teachers and nurses, argued that there should be continued dialogue with the government to eliminate all the loopholes that could lead to abuse of employment laws and regulations.
However, the President of the Malta Employers’ Association (MEA), Arthur Micallef, said the issue of precarious work had been overstated by the unions. The MEA issued a position paper opposing the new government contract conditions, insisting that current legislation could deal with employment abuses if it was properly enforced.
The Malta Chamber of Commerce, Enterprise and Industry said in a statement that the government’s intervention was ill-timed, and the social partners represented by the Malta Council for Economic and Social Development (MCESD) had not had an opportunity to discuss the changes. It feared that the new ban on subcontracting government contract work would damage the private sector, especially small- and medium-sized enterprises. The Chamber’s view was that any new measures should target problem sectors rather than the entire labour market.
The Director General of the Malta Chamber of Small and Medium Enterprises (GRTU), Vincent Farrugia, said in a statement on 12 August 2013 that the new regulations would badly affect small- and medium-sized companies. He voiced concern for self-employed workers and for small- and micro-sized companies which, because of their limited resources, would no longer be able to bid for tenders, and questioned whether this breached EU laws.
Commentary
The new conditions are intended to close all possible loopholes that could make it possible for employers to use substandard work practices.
The employers’ associations, insisting that their members do adhere to good practice and labour legislation, feel that the new measures are too strict and will burden employers with less flexible workforces.
The GWU, however, had welcomed the new measures as the culmination of its long campaign to eliminate precarious work.
The new regulations suggest that the ruling Labour Party, after its emphatic victory at the polls in the general election in March 2013, is keen to affirm its social democratic credentials.
Saviour Rizzo, Centre for Labour Studies