Parental measures ‘too expensive to implement’

The Estrella Report, published by the European Parliament, makes a number of recommendations supporting parents. It particularly suggests the creation of two weeks of parental leave for fathers and an increase in paid maternity leave from 14 to 20 weeks.

From a socio-economic point of view, these recommendations are important, even if heavily contested. On one hand, increased maternity leave offers the mother improved recovery time and better bonding. However, employers are saying this is too expensive to implement.

At a recent seminar on the subject, organised by Fondazzjoni Ideat, Joe Tanti, chief executive officer of the Malta Business Bureau, and Gordon Cordina presented a report estimating the cost to the economy of such a measure to stand at €7.5 million, with €5.3 being carried by the private sector.

Given that 70 per cent of employees work for small and micro enterprises and 40 per cent of private sector jobs are dependent on female employees, the impact of such measures will be mostly felt by the small employer and large organisations with women employees, they said.

These measures may have a negative effect on the participation rate of women – which is 20 per cent below the EU average. Moreover, female employment will be less attractive as the current wage gap is narrowed even further.

While the costs are easily quantifiable, the same cannot be said for accrued benefits. They suggest alternative, more effective measures, such as child care facilities and annualised hours, which would give a better return on costs.

Highlighting shortcomings in the Labour Force Survey, Labour MEP Edward Scicluna said this failed to measure important facts on how women use maternity leave, and estimated the cost of these measures at €5 million. He also said employers shoulder these costs alone as opposed to the practice in other countries.

Statistics suggest Malta has the lowest female participation rate, the shortest period of paid maternity leave in the EU and ranks before last in a list of countries offering full-time equivalent paid maternity leave. UK statistics show that the rate of return of mothers to work increased when maternity leave was extended, while the rate of mothers changing jobs after childbirth decreased considerably, leading to improved job retention rates and reduced costs.

Prof. Scicluna predicted these measures could lead to a nine per cent increase in the participation rate of women in the labour market.

No matter how one looks at it, the measures are intrinsically positive. Child psychologists and female health workers will provide ample evidence that the measures are beneficial both for families and society.

Moreover, even if we think the nine per cent increase in the participation rate is generous, the mere fact that Malta lags behind its

European partners is a strong enough argument in favour of these measures.

On the other hand, one has to accept that the measures come

with financial implications for employers. However, one cannot advocate reduced benefits to remain competitive. Such an approach is not what people expect from EU membership.

The real issue is about who will pay for these benefits. Employers are justified in expecting the government to share the burden, and given the social implications of these measures, it will be hard for the government to argue otherwise.

While the Malta Council for Economic and Social Development should discuss this issue, the government may commission a research study not only to quantify the cost of such measures but also to analyse better the circumstances surrounding maternity leave.

Furthermore, the report should evaluate the cost and recommend how best to apply other measures mentioned in the Malta Business Bureau report. These alternatives offer long-term solutions to increase the participation rate of, and discrimination against, women.

One should be clear about which measures are meant to achieve what. Using maternity and parental leave as a measure to increase female participation in the labour market, or to fight discrimination, is the wrong approach.

While such measures may have this effect, nevertheless, reconciling work and family life requires a battery of policies and measures that work in concert, are sensitive to competitiveness and flexible.

Effective policies cannot be designed to fit one size but drawn up in such a way as to accommodate the various and changing needs of the organisation and the family. The framework needs to be statutory but at the same time offer flexibility to accommodate all parties and capitalise on the best situation at all times.

This approach goes beyond maternity and parental issues, and therefore these measures should not be seen in isolation but as a single factor of a wider policy that spells out what we want to achieve. The rest will be relatively easy to draw up.

Mr Gerada is chief executive officer, Foundation for Human Resources Development.