1,484 shipyard workers apply for early retirement

A total of 1,484 dockyard workers applied for the early retirement schemes offered by the Finance Ministry by yesterday, leaving 142 on the company's books, a Finance Ministry official said.

The schemes will remain open throughout this month but applicants will only be eligible for 85 per cent of the handouts. Thus, it is unlikely that more workers will avail themselves of the schemes.

The schemes were launched in mid-August ahead of the privatisation of Malta Shipyards and will cost the government €58 million if all the workers apply. The government is hoping the funds will come from the sale of the shipyards.

Just over one third of Malta Shipyards workers who applied for the early retirement schemes are in the 40 to 49 age bracket, The Times has learned.

At the beginning of August, soon after the government had announced its intention to privatise the loss-making shipyards, the government had proposed four schemes:

Scheme A for workers aged 56 and over will enable workers to receive a tax-free lump sum based on every year of service, rising from €60 to €121 per year of service. Moreover, they will receive an annual payment of eight per cent of the basic pay until they reach statutory retirement age.

Scheme B for those aged between 50 and 55 enabling recipients to become entitled for a pension on turning 56. They too will get the lump sum payments linked to years of service as in scheme A, capped at €36,000 and a lump sum pro rata ex-gratia payment equivalent to 23 weeks pay for every year remaining to age 56. Social security contributions will be covered by the government until retirement or until a new job is found.

Scheme C is for the voluntary resignation of those aged 40 to 49 and also includes a lump sum payment equivalent to four times the annual basic salary, capped at €55,000.

Scheme D, for the younger workers, includes a lump sum equivalent to 10 weeks pay for every year of service up to a maximum of €48,000.

In all cases, the minimum payable is €11,650.

The rush for the schemes was prompted by European Commissioner Neelie Kroes who said the government's intention to write off about €100 million in debts before selling Malta Shipyards violated EU rules.

In line with the EU Treaty, the government cannot continue subsidising the shipyards after December.

A spokesman for the Finance Ministry said the government is very pleased with the subscriptions to the early retirement schemes so far. The original plan was to shed 1,000 employees.

The spokesman said that, in the meantime, the Privatisation Unit has drawn up the tender documents for the privatisation process but is awaiting the green light from the European Commission before issuing them.

The call for expressions of interest, which closed on September 15, had yielded positive results. The government never made public any details of how many companies actually expressed their interest in acquiring the Malta Shipyards, saying this may hinder the negotiating process.

The Finance Ministry's communications office had circulated an e-mail among the press on September 15, when the deadline expired, saying: "The ministry and the Privatisation Unit are currently making an assessment of the EOIs received and will make a formal comment tomorrow". The only comment made was that no information would be given.

The spokesman said that about 600 workers had accepted the management's request to stay on to finish the remaining contracts the Malta Shipyards had.