The good employer

Up to the late 1980s and early 1990s Europe still had communist regimes which provided very inefficient and poverty level lifetime employment for all its citizens. It is now almost 20 years since Communism was buried by those same citizens and hopefully never to resurface again. The current General Workers' Union issue on government "guaranteed" lifetime jobs is therefore outdated by so many years.

It is not the first time that the GWU makes attempts to put the clock back as it struggles to cling to privileged and obsolete practices and the Interprint saga is one such example. This behaviour by the union cannot be said to come as a surprise. It periodically reappears as the struggle within the union, between the realistic forward- looking progressives and the "retro" hardliners goes on. Overall, apart from these periodic relapses, the record of the union on adaptation to, and acceptance of, the economic realities of the day is however not so negative or discouraging.

The fact that so far the GWU has held back from pushing the issue by "taking to the streets" or calling sympathy action is to be interpreted as a manifestation of caution, common sense and maturity. No rush actions or decisions are being taken and this is a good sign. It is good to hear that there are GWU officials who believe that often confrontations increase and do not reduce or resolve problems. Nonetheless, it is a useful exercise to examine what is so exceptional and important about the current stand-off between the government and the GWU regarding the job-for-life claim for Interprint employees.

In a nutshell, the importance of the issue lies in the establishment, once and for all, of a most basic principle. Is the government bound to provide lifetime employment to whoever is directly or indirectly employed with it? Is the government legally and legitimately authorised to give lifetime employment guarantees? Should the government, morally and ethically, provide this lifetime job assurance to preferred selected citizens?

The answer to the above three questions is three times no. The government is not bound to provide lifetime employment to anybody. Like any other employer, the government enters into an employment contract with its employees. The contract implies that the employer needs a service and the employee binds himself to give it. Once the service is no longer required, for whatever valid reason at law, it is logical and normal to terminate the contract, as happens in the private sector. Such behaviour is sanctioned by the laws of the country and the laws reflect the will and approval of us citizens.

Here we are talking about a liberal, free enterprise economic system endorsed by all of us. It is important to point out that our socio-economic system has positive humanitarian characteristics and good features of social care and responsibility. A person declared redundant would be entitled to compensation and for the period of unemployment this person is entitled to unemployment benefits. Our society has made so much progress and created so much wealth that in real terms an unemployed person in 2005 on unemployment benefits can still enjoy a higher standard of living than a gainfully employed person in the 1960s. This is progress and such progress was brought about through our efficiency and productivity. Such standards however will not be sustainable if we start confusing issues and talk about indefinitely keeping people on salaries and in jobs that in reality do not exist.

On an ethical and moral note it is grossly unfair and unjust that at the expense of all taxpayers the government discriminates between its citizens: the privileged, who under whatever circumstance will never end up temporarily unemployed, and all the rest, that is all employees in the private sector.

It was recently reported that the notoriously most unproductive sector in Malta, namely the public sector, has over a year increased its average wage by seven per cent while that of the private sector rose by only one per cent. Obviously this came about through the pressure of unions as they obtain increases without corresponding improvements in productivity. Unlike what happens in the private sector, the government does not bargain hard for productivity-based or restructuring-based increases. The net result of this procedure is the really anomalous situation whereby the public sector employees on average have wages and salaries higher than the private sector employees even though they are much, much less productive. Here one must however state that the vast majority of public employees are in truth capable and willing workers, some evidently working their guts out (the health sector) while others need only to be managed competently to bring out their true value.

The government in Malta is deemed to be a very good employer. It is hoped that the government be just as very good in giving back value to the taxpayer by organising its employees to be more productive. Under any circumstance we are not aware of a brief that taxpayers gave the government to guarantee jobs for life. The government collects taxes to give a service and not jobs. With the revenue collected the government is expected to guarantee social services, pensions, unemployment benefits and ETC training and retraining schemes for the unemployed, but not jobs for life.

As I mentioned earlier on I am sure the GWU can understand this logic and I will declare once more that there are significant signals of a sense of maturity and realism that in the end is prevailing within the union. Although I was surprised to see the union expecting the private sector employees to come out in support of privileges to which they will never have access, subject as they are to strict economic rules based on productivity, efficiency, realism and real value.

In conclusion, we should be discussing how all government employees are going to be made more productive and not discussing how the taxpayer is obliged to keep 50,000 employees in a sort of job, on a good salary, irrespective pf whether their services are needed or not. The government cannot indefinitely continue guaranteeing highest salaries, highest job security and, on average, lowest productivity.

Mr Muscat is president, the Malta Employers' Association.