Employers say they made overtime proposal

The Malta Employers' Association (MEA) said yesterday the proposal to curtail overtime payment had been made by all the employer bodies taking part in the social pact talks and not by "any single constituted body".

It named those bodies as MEA, the Federation of Industry, the Chamber of Commerce and Enterprise, the Malta Hotels and Restaurants Association and the Chamber of Small and Medium Enterprises - GRTU.

It said it wanted "to clarify the allegations being made concerning the issue of overtime payment that was raised at the MCESD during the talks to agree on a social pact during 2004 and 2005".

Labour Party leader Alfred Sant last Friday accused the government of having proposed that the first 100 hours of overtime be paid at the normal hourly rate when negotiating a social pact in 2004. Dr Sant made this allegation in response to the Nationalist Party's claim that MLP deputy leader Charles Mangion had proposed in a magazine interview that overtime should be paid at the normal rate, a claim Dr Mangion has denied.

The MEA said the recommendation to limit overtime payment was made on the understanding that the social pact was for a definite period of three years, "although at one stage in the discussions a four-year term was also being discussed". The employers' proposal also capped the number of hours to be paid at single rate at not more than 100 per annum.

It said the issue of overtime had been raised in view of the fact that employers were foreseeing the closure of a number of firms in manufacturing and that the performance in the tourism industry was also lagging behind targets. "Real GDP growth was below one per cent and there was clearly a need to discuss measures through which Malta could remain sufficiently competitive to minimise the impact of a sudden surge in closures and unemployment. The overtime proposal was made for no other reason than to safeguard the jobs of thousands of employees as labour-intensive companies in Malta and other European countries were relocating to less expensive destinations.

"The reality at the time was that, although there were indications that foreign investment would increase during 2006 and 2007, as indeed it did, this was not a certainty. In these circumstances, employers acted responsibly and proposed a set of measures to address the situation, including that on overtime payment," the MEA said.

It said the unions were opposed to this measure and submitted their own package to improve competitiveness.

"During numerous lengthy MCESD meetings that were held at the time, in which the government also participated, different options for a social pact package were negotiated and at one point the overtime proposal was dropped from the discussions. In the final package that was drafted in January 2005, when the Prime Minister himself intervened to reach agreement, there was no mention of the overtime proposal," it said.

The association reiterated that, given the circumstances prevailing in 2004, employer bodies were realistic in proposing measures which, although unpopular, were intended to raise productivity and protect the livelihood of thousands of Maltese families.

"No one can take working conditions for granted and productivity and competitiveness remain a prerequisite for any improvement in the national standard of living," it said.