Individual employment contract

Change within the labour market is an ongoing process. As a consequence, labour laws need to be revisited on a regular basis in order to reflect the new challenges and the dynamics of a sound relationship between the employer and the employee. New concepts of human resources management have been introduced.

Human resources policies should be directly linked to the business strategy. Thus, the individual employee has become the focus of the company's strategy in meeting its targets of productivity and competitiveness. Business success is not only measured on the basis of the profit margin or the returns on the dividends but, nowadays, great emphasis is being made on the level of job satisfaction, employees' motivation and the relationship between the workers and their management.

The introduction of performance-related pay, retention and succession plans, recognition and reward schemes and life-long learning initiatives demonstrate how individual attention has superseded the traditional approach of "equitable" treatment and collectivity. Without diminishing the validity of team work, the modern employer is more keen to promote the concept of meritocracy. It stands to reason that this could be better achieved through the individual contract of employment. In contrast, collective agreements tend to hinder the possibility of gaining the full benefits derived from the individual's knowledge, merits and performance.

It is therefore not surprising that the role of trade unions had to change radically. Not without any resistance; that is understandable.

The idea of solidarity between workers and "fairness" in the conditions of employment are fundamental for a trade union engaged in collective bargaining. Individual contracts are perceived by trade unions as serious threats to their own existence in particular and to the industrial relations in general. However, it is a known fact that employees, perhaps with the exception of certain categories of low-income earners, are opting for individual contracts rather than collective agreements. This trend is gaining momentum and, as a result, trade unions are striving to attract more members by means of marketing campaigns or, as an alternative, they are extending their services to the "individual" employee without any obligation to join the union.

If you can't beat them join them!

In my opinion, the increasing number of employees opting for individual contracts is also attributed to the lack of credibility towards the modus operandi of trade unions.

The employee has realised that union representation does not necessary mean job security and better employment conditions. What employees could achieve on their own steam, on the basis of their personal skills and the opportunities for career advancement are more significant than sharing the burden of compromise with their colleagues. Job security is no longer obtained through collective participation in industrial actions, but is guaranteed through the individual's aptitute for multi-skilling, flexibility and knowledge development. Gone are the days where the best paid were those employees who received their benefits out of the collective bargaining.

Trade unions might find it hard to admit this fact of life but, unless they exert enough pressure on the authorities, the government and employers' associations alike, they would never manage to reverse the downward trend in union density. Trade unions need to redefine their role at the workplace to the extent that their members' individual aspirations and ambitions are given top priority as much as any other dispute involving a section, a department or the company as a whole.

Even when dealing with certain "rights of employees", trade unions shall adopt a flexible, less rigid approach from what they used to profess in the past. A case in point is the issue dealing with the right of "equal pay for equal value". In simple terms, trade unions contend that employees who carry out the same duties as stipulated under their job description shall be paid the same wage irrespective of age, colour or gender. In some cases seniority or the years of service are considered as "the exception to this rule". That would still fall under the definition of "fair play" at the workplace. However, today's employee does not relate the pay package to the specific job duties.

Employees would expect that their salaries or wages not only reflect their responsibilities but also their performance, knowhow, skill and their commitment and loyalty towards the company. They expect to get paid not in terms of their delivery but on basis of their level of performance and efficiency. It's not the "what I do" that counts but the "how I do it"! What is fair today is not necessarily what used to be fair yesterday. That's why the traditional system of negotiating a salary scale according to grades has become outdated. And, essentially, that is why workers are opting for individual contracts.

It could be that trade unions oppose individual contracts for the wrong reasons. Trade unions claim that once the element of solidarity is left out of the equation, employment relations are jeopardised and employers tend to get away with abuses and discrimination. They might be right in their assumptions. But that could be avoided if proper legislation is put in place in order to secure an efficient mechanism of vigilance and enforcement.

Just to mention an example: There is an increasing tendency that individual contracts stipulate that, in case of termination of employment, the employees would have to pay a hefty penalty if they would seek employment with a competitor, customer, agent or whoever had business connections with the present employer, in the following few years. In my books this clause is discriminatory and illegal. Once the relationship between the employer and the employee is over, there should not be any "binding commitment" between the parties except for certain issues concerning 'breach of confidentiality'. Yet, our labour regulations do not cater for such situations.

It is high time to amend our Employment and Industrial Relations Act with a view to securing the jobs and the conditions of employment emerging from the new trends within the labour market.

matyas@maltanet.net