The extension of maternity leave to a minimum of 20 weeks is a regrettable decision that will ultimately put at a disadvantage female labour, particularly young women seeking their first full-time employment post, the Malta Business Bureau said.
It said in a statement that the cost implications of the EP’s vote on small business employers was considerable.
In a plenary vote, the European Parliament adopted the Estrela Report on the revision of the directive on the health and safety of pregnant and breastfeeding workers.
The adoption of a ceiling of 75 per cent of payment was not a sufficient competiveness-proofing given the current prevailing economic circumstances.
“The Malta Business Bureau regrets that amendments pushed forward with the intent of curtailing the payment to two thirds of full pay equivalent were rejected by the European Parliament.
“Maltese business is of the opinion that the reconciliation of work and personal life can only be attained through a balanced approach between the reinforcement of rights for working mothers and the economic realities within which private business has to operate.
“In this regard, the availability and accessibility of childcare facilities and flexible work arrangements are a critical and essential part of the solution,” it said.
MBB said that this balanced approach was not pursued by the cross-party majority that adopted the Estrela recommendations.
“By voting in favour of the Estrela Report, the European Parliament has proved to be detached from the signs of the times.
“This is a time in Europe, when member states are either slowly recovering from the worst economic crisis recorded in recent history, or are still struggling to get their economy going whilst putting their public finances back in order.
“It is remarkable how MEPs can be so insensitive to business’ realities when SMEs are considered to be the backbone of the European economy.
“The adoption of the Estrela Report runs counter to the think small- first principle, the cornerstone of the Small Business Act so much championed by the European Commission.”
MBB said that in this regard, Maltese business questioned how entrepreneurs could continue to develop and plan their future investments if the political outcomes of EU decision-making were conducive to adding further administrative burdens and legislative compliance costs.
“Maltese business has strongly advocated against the harmful competiveness-related implications of the Estrela recommendations on the revision of the maternity leave directive. “The Malta Business Bureau has commissioned and published a detailed impact assessment report on the matter and communicated its conclusions on the high cost estimates as an informed opinion to all the relevant political decision-makers.”
According to the impact assessment study conducted by the MBB, it is estimated that increasing the maternity leave from the current statutory 14 weeks to 20 weeks would potentially cost the Maltese economy €7.5 million worth of value added in a year, of this the cost to private business would amount to
5.3 million a year. On the other hand the introduction of two weeks of paternity leave would cost the economy €4.8 million, of which the cost for private business would be €3.7 million in a year. In total, these measures would dent Malta’s GDP by 0.29 per cent and reduce the value added of private business by 0.25 per cent. All in all, the annual burden on Malta’s economy would be in excess of €12 million every year.
“The report clearly shows that the burden on the economy of the proposed extension of maternity leave will strongly tarnish Malta’s competitiveness and could be very damaging for local SMEs,” MBB said.
It said business strongly believed that the European Parliament’s political agenda needed to be better tuned to the current economic realities affecting EU-based enterprise within the context of the globalised market-place.
“The message from business is clear – this is not the right time to play with the economy.
“EU legislation should be about moving the economy forward and not adding new payroll costs for overburdened companies and national social security systems.
“The MBB augurs that the forthcoming Council discussions on the revision of the maternity leave will be adopting a more realistic and balanced approach that takes into parallel account of both work-life balance needs and economic competitiveness which is ultimately conducive to the generation of jobs in all the EU member-states,” it said.