Meetings are being held between the national airline Air Malta and officials from the four trade unions representing the airline’s employees, to discuss whether a new rescue plan can be negotiated. When commenting about the airline, the Minister for Investment, Industry and Information Technology outlined two possible options, either to draw up a new rescue plan or to negotiate a collective agreement. However, the minister announced that he would only guarantee that there would be no lay-offs if the rescue plan option was taken.
On 13 November 2006, a meeting was held between Air Malta and the four trade unions representing the airline’s employees: the Association of Airline Engineers, the Airline Pilots’ Association, the maritime and aviation workers’ section of the General Workers’ Union (GWU) and the Union of Cabin Crew. The aim of this meeting was to discuss the company’s financial position and to explore the possibility of negotiating another rescue plan, since the first one will expire in 2007 (MT0407101N).
2004 rescue plan
In March 2004, the four trade unions had formed a common front and adopted a common negotiating position with the airline’s management. After prolonged discussions, both sides agreed a three-year rescue plan for the airline. As part of this plan, the trade unions accepted cuts in overtime as well as a wage freeze, leaving wage increases dependent on a rise in the cost of living. The unions were prepared to allow flexibility and to change working practices. In return, the company declared that no jobs would be lost.
Government outlines two options
The Minister for Investment, Industry and Information Technology, Austin Gatt, reported in parliament that there were two possible options for the company, which included either drafting a new rescue plan that would involve sacrifices but would assure jobs, or negotiating a collective agreement. However, it was made clear that the guarantee of no job losses could only be granted if the rescue plan option was taken. According to the government, the first rescue plan was a success as Air Malta had reduced overheads by MTL 11 million (€25.6 million as at 6 February 2007), despite a MTL 5 million (€11.6 million) increase in its fuel bill. Although the company is in a better financial position, it is still expected to be in arrears at the end of its financial year ending in March 2007. Minister Gatt stated that job dismissals would be inevitable if trade unions opted for a collective agreement.
Air Malta faces problems stemming from core operations carried out in the past two years. Minister Gatt also mentioned the increased price of oil, inadequate human resource management and obsolete work practices as causes of the current problems. The airline is proposing that employees work 45 hours a week during the summer and 35 hours a week during the winter, given that the peak season is summer, which implies that there would be no overtime allowed. In order to cut costs, the company also plans to close a number of overseas outstations, while efforts will continue to be made to increase revenue by attracting more passengers.
One of the biggest stumbling blocks in the negotiation of a new rescue plan is the further postponement of wage increments for employees of Air Malta. Trade unions had agreed that workers would not receive any increments until 2007. However, Air Malta is now suggesting to defer such payments again, meaning that employees will not receive increments before 2010.
Proposals for second rescue plan
Some of the proposals for the second rescue plan include:
- bringing holiday leave, injury leave and sick leave allowances in line with what is compulsory by law;
- abolishing the annual allowances of MTL 400 (€934) for degree holders and MTL 300 (€700) for diploma holders;
- bringing the company into a position where it can order its workforce to take up positions abroad if necessary;
- suspending a worker without pay who loses the airport security pass until a new pass is issued and dismissing the worker if a pass is not reissued. Until now, procedures regarding security passes have been lenient;
Trade unions had until mid-January 2007 to submit their responses to these proposals. It is anticipated that the second rescue plan will be implemented on 1 April 2007.
Commentary
The first rescue plan for Air Malta was an alternative to a restructuring exercise which would have implied downsizing of the workforce, as happened in other public sector organisations, such as Public Broadcasting Services (PBS) (MT0405101N; MT0604029I) and Malta Shipyards (MT0612029I). Minister Gatt is insisting that since Air Malta has not yet become economically viable, the same stringent measures of the first rescue plan should be reimposed. The trade unions, on their part, may argue that they have already made too many concessions. During the negotiations for the first rescue plan, the brokering of a former legal trade union consultant played a major role in helping the parties reach a compromise. It looks as if another form of effective brokering is also desperately needed this time around.
Christine Farrugia, Centre for Labour Studies, University of Malta