Retirement schemes topped by €9 million

The government and the General Workers' Union (GWU) yesterday agreed on the shipyards' privatisation, basically topping the retirement scheme fund on offer by a further €9 million.

Clearly pleased with themselves, Finance Minister Tonio Fenech and GWU secretary general Tony Zarb announced the deal during a press conference in the afternoon. The agreement was signed by both sides and by the previously unnamed mediator, the Malta Employers' Association's director general Joe Farrugia.

In essence, the main points of the agreement concern the money made available for the retirement schemes, which will be increased to €58 million, from the previous €49 million. The agreement also refers to what will happen to workers who do not opt for early retirement. On this latter point, in fact, the government has committed itself to try and negotiate a work guarantee with the yard's prospective buyer for a still undetermined number of years.

Moreover, should the buyer have a problem with the number of workers left on the company's books after the schemes expire, the government and the union will form a joint-commission to seek alternative employment for the excess workforce.

That said, these workers would have to opt to move elsewhere voluntarily as European legislation clearly makes it illegal for workers to be made redundant as a result of a transfer of business.

"A few ifs remain," Mr Fenech acknowledged when speaking about the logistics of managing the workforce, but he insisted that, thanks to the good rapport there now exists between the government and the union, matters should be much easier to deal with.

Asked what the major hurdle was between the two sides, Mr Farrugia was rather coy at first. He acknowledged, however, that there was a great divide between the two sides on the retirement schemes.

When the union's original demands were costed, the figure was "astronomical", Mr Farrugia said, pointing out that the gap between the two sides at that stage was huge.

"Then, we worked on trying to reach a compromise, which would not push the figure up so much".

The mood yesterday contrasted sharply with the deadlocked positions adopted by the two sides just before talks began three weeks ago. The union had even threatened to take to the streets at a meeting for shipyard workers in Paola.

Asked why the union had dropped its demand to have retirement schemes offered only after bidders come forward and why the government failed to rope in the union in the process earlier, the minister answered for both sides saying negotiations are about compromise.

Mr Zarb simply stressed that the union had achieved its main objective of refining the retirement packages and to ensure that the workers who stay on are guaranteed employment. He said the idea to set up the commission was an innovative one, which the union would take on responsibly.

So far, 337 people have taken up the schemes and most of them have already left the 'yard, possibly creating a staff shortage which may affect the contracts the shipyards are expected to handle before the transfer.

On this point, however, Mr Fenech said - as union officials nodded approvingly by his side - that both sides will try to persuade workers who take the schemes to stay on and help complete the pending work.

"With the present spirit of cooperation, I'm sure it will be much easier to do this," he said.

The union will also be promoting the retirement schemes from its offices at the shipyards.

Questioned about the financial increase to the schemes fund, Mr Fenech said it was necessary to make the opt outs more attractive. Speaking about the figure of 700 workers (out of some 1,700) which the government is targeting to have on the company's books before the privatisation process, the minister said 700 was not a "magic number" but a benchmark to give an indication of the sort of numbers that would attract potential buyers.

Meanwhile, the Labour Party welcomed the deal in a statement issued shortly after the agreement was announced. While stating clearly that it was in favour of privatisation, the MLP insisted from the start that the process had to respect workers' rights, particularly as the government made false promises to the workers before the March 8 general election.