Yards schemes may cost €49m

The Malta Shipyards' privatisation process was set in motion yesterday when the government unveiled the early retirement and voluntary resignation schemes.

Shipyard workers on an indefinite contract - amounting to 1,627 - are eligible to take up one of the four schemes that will be open until the end of October, Finance Minister Tonio Fenech said yesterday.

Should all the workers apply, the schemes would cost the government €49 million, which would "hopefully" be financed by the privatisation itself.

Scheme payments will be made within 10 working days of application, but only those who apply by the end of September will get the full entitlement. Workers applying in October will get only 85 per cent of the sum due.

This is being used as an incentive for workers to take up the schemes in order to reduce the workforce to less than 700 and make it more attractive to prospective buyers once the call for expressions of interest is issued on Monday, the minister said.

The schemes are voluntary: any worker who wants to stay on can opt to do so. But Mr Fenech reiterated that the government could not guarantee their employment if the privatisation process falls through.

The schemes, divided into four age brackets, are modelled on those issued in 2003 - when the shipyards were restructured - but adjustments were made to reflect current realities, he said.

Scheme A offers early retirement to workers over 56, while Schemes B, C and D are voluntary resignation schemes for those aged between 50 and 55, 40 and 49, and under 40 respectively.

Schemes C and D target the majority of workers and would cost the government the biggest chunk of the expense, especially since the workers in these age brackets have the most to lose because they would be giving up their jobs.

Outlining the difference between the 2003 and 2008 schemes, Mr Fenech noted that they were now open to all the workers, unlike in 2003 when the people eligible for the schemes were hand-picked.

Moreover, according to the schemes, payment of pending leave entitlement and pro rata statutory bonuses will be included with the last salary; employees with a medical condition will participate in the schemes; all the workers can continue working without losing any scheme benefits; and they will be able to register for work even though this was not usually allowed in cases of voluntary resignation.

Mr Fenech said he was aware that, following the shipyards' hefty financial losses that were absorbed by taxpayers, some may perceive the schemes as too generous.

He explained that a middle ground had to be found and the principle of equity (compared to 2003 schemes) respected.

The launch of the schemes comes after a series of meetings between the government and the General Workers' Union (GWU) which failed to yield an agreement, the last meeting having been held on Tuesday at the request of the latter.

The union has agreed to privatisation and early retirement schemes but insists that the government offer guaranteed employment to workers who want to retain their jobs and that the schemes be launched once the prospective buyer or buyers are known.

The government, on its part, has underlined its commitment to ensuring the success of the privatisation process especially because it will no longer be able to subsidise the shipyards beyond December 31.

The failure of the process may lead to the shipyards going bankrupt and workers losing their jobs without any form of benefits, Mr Fenech reiterated yesterday as he launched the schemes.

The GWU will be holding a meeting for shipyards' workers and their families on Wednesday in Paola, the union said. During a meeting held on Monday the union urged workers not to accept the schemes.

Alternattiva Demokratika expressed solidarity with the workers "who are feeling uncertainty as regards their future".

It urged the government and the GWU to work hand in hand to create proactive solutions to ensure that the workers remain in employment.

In the coming days each shipyard worker will be receiving a personalised letter informing him about the schemes.

Applicants can call on freephone 156 or seek assistance at two help desks - one at the Catholic Institute in Floriana and the other at Mimcol offices in San Ġwann. They will be open from today between 8.30 a.m. and 6 p.m. Monday to Friday and until midday on Saturday. The help desk will be manned by ETC and Social Security officers.

Applications can also be sent by mail or through the internet by visiting www.skemitarzna.com or dropping an e-mail to info@skemitarzna.com.

The schemes on offer

Scheme A: Early retirement scheme for workers aged 56 and over

• An immediate two-thirds pension.

• Ex gratia (non-taxable) lump sum linked to years in service with a minimum qualifying service of 10 years: €60.65 for every year of service for those working up to 19 years; €90.85 for every year of service up to 29 years; €121.13 for every year of service over 30 years.

• Freedom to find alternative employment and still receive a pension.

• National insurance contributions financed by the government unless the employee finds alternative employment.

• Entitlement to cost-of-living increases.

• Social security covered until retirement or until alternative employment is found.

Scheme B: Voluntary resignation scheme for workers aged 50 to 55

• Entitlement to a two-thirds pension on reaching 56 years of age, with the same conditions as Scheme A.

• Ex gratia lump sum linked to years in service with minimum qualifying service of 10 years: €60.65 for every year of service up to 19 years; €90.85 for every year of service up to 29 years; €121.13 for every year of service over 30 years.

• Lump sum pro rata ex gratia payment equivalent to 20 weeks' pay for every year remaining to age 56.

• Capped at a maximum of €28,000.

• Social security contributions covered until retirement age is reached or alternative employment found.

Scheme C: Voluntary resignation scheme for workers aged 40 to 49

• Lump sum ex gratia payment of 3.25 times the annual basic salary.

• Capped at €45,000.

Scheme D: Voluntary resignation scheme for workers under 40

• Lump sum pro rata ex gratia payment of eight weeks' pay for every year in service, capped at €40,000.

• Minimum sum payable is €11,650.