Workers at STMicroelectronics overwhelmingly rejected the package of austerity measures proposed by the company in a secret postal ballot organised by the General Workers' Union.
From the 925 registered union members at the company, 542 (59 per cent) cast their vote. With seven invalid votes and one abstention, 505 workers (94 per cent) voted against the austerity package. Only 29 workers voted in favour.
The votes were counted yesterday evening at the union's headquarters in Valletta by the section secretary and workers' representatives.
According to GWU section secretary Andrew Mizzi, the company had threatened to call off any agreement with the government if the austerity package was rejected.
Last week, the government announced it had reached an agreement with ST, the world's fifth largest semiconductor company, on a new aid package that should secure the company's continued presence in Malta.
According to the government, ST also pledged to invest in a new high-end production line at its Kirkop plant. The size of the aid package and the investment was not disclosed and the company made no official announcement on the matter.
Mr Mizzi said the union would be informing management of the result and discussions would have to take place all over again.
One worker spoilt his vote by ironically scribbling his opposition to the austerity measures on the ballot: "The wage should remain the same and on sick leave the company should target those who abuse."
Mr Mizzi said ST had been negotiating with the government for the past two years and it always tied in potential investment with labour cost reductions. The company shed about 1,000 employees, he added, over these two years.
In April, the company proposed a set of cost-cutting measures, which would have saved the company some €3 million annually. After negotiations with the union, the austerity package was watered down to one that would have saved the company some €600,000.
The latest package presented to workers on June 23 would have seen, among other measures, salary and seniority increases withheld until December 2012, shift allowances frozen at €13.97 per week, the Saturday and Sunday night shift allowance removed and new employees starting at minimum wage over the next two years.
Other changes were to be made to the Sunday and Saturday premium and sick leave payments.
Last year, the multinational company had downsized its Malta workforce by about 400 employees after facing worldwide difficulties and there were fears for the company's future.
ST employs about 1,400 people, making it the largest private sector employer. It is also by far Malta's leading exporter.