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Transposition of the SE legislation in Malta (Report: July 2004)

The SE Directive has so far not been transposed into Maltese law. It is being debated at the Employment Relations Board, which is a tripartite consultative body comprising four employees’ representatives and four employers’ representatives, together with four members appointed by the government. This board has to be consulted by the minister before publication of the legal notices embodying the detailed regulations implementing the Employment and Industrial Relations Act (EIRA, 2002).

The passing of regulations by means of legal notices in parliament rather than amendments to the Act proper is the preferred flexible method chosen to keep the act up to date with any changes which may be required, including the coming into force of EU social policy directives, such as the SE directive. Transposition of the SE directive following recommendations made by the Employment Relations Board would take place by means of such a legal notice.

There have been no position papers or other responses from the social partners on this directive. One reason may be that the Maltese social partners are still trying to take on board the new legislation, enacted a few months prior to EU accession in order to bring Maltese industrial relations into line with the EU acquis communautaire. The changes introduced into the law (EIRA) that came into force in December 2002 include parental leave; guarantee fund regulations; fixed-term contract regulations; information and consultation regulations; collective redundancies; transfer of businesses (protection of employment); working time organisation; and European Works Councils. The effects and implementation of these new regulations are still being monitored by the Maltese social partners.

Moreover, industrial relations in Malta are based on the British rather than on the European model. Indeed, Maltese trade unions have a workplace representative, known as a “shop steward”, who is the effective link between trade union officials and management. It is mainly through shop stewards that trade unions can monitor what goes on at the workplace, and by and large, Maltese trade unions tend to invest heavily in their informal and formal education. The culture of workers’ participation in the workplace is embodied in the functioning of the shop stewards rather than in a tradition of institutional representative bodies. Works councils are conspicuous by their absence. Even board-level employee representation is rather limited: at present there are only 14 worker directors in Malta, and, with the exception of the two in firms owned by the largest trade union, these worker directors are to be found in state-run or state-owned enterprises.

Either because the Maltese social partners are still digesting the new regulations or because of this lack of a worker participation culture at enterprise level the SE directive has, so far, not stimulated any debate among the social partners. Many employers deem the new regulations embodied in the EIRA (2002) too cumbersome. The employers seem to believe, implicitly or explicitly, that what they term excessive labour market regulation, far from being a sensible response to slower growth may be the cause of it. This view has been endorsed by the Director General of the Malta Employers’ Association (interview 19 July 2004). The employers are therefore proposing that Maltese industry be given some breathing space to enable it to adjust to the new situation, especially at a time when economic growth has slowed down and the Maltese economy is still undergoing restructuring. This plea may not go unheeded by the legislators.

However, at this stage nothing is certain. Transposition of the SE directive is still in the drafting process which entails a series of deliberations and consultations by the minister and the Employment Relations Board.

Alle Malta