The Malta Employers’ Association insisted this morning that the proposal in the Social Pact talks to curtail overtime payment was fielded by all the employer bodies participating in the social pact discussions, namely MEA, FOI, the Chamber of Commerce, MHRA and the GRTU and not from any single constituted body.

"The recommendation to limit overtime payment was made on the understanding that the social pact was for a definite time period of three years, although at one stage in the discussions, a four year term was also being discussed. The employers’ proposal also capped the number of hours to be paid at single rate at not more than 100 per annum," the MEA said.

"The issue of overtime was being raised in view of the fact that employers were foreseeing the closure of a number of firms in manufacturing, and that the performance in the tourism industry was also lagging behind targets at the time. Real GDP growth was below less than one per cent and there was clearly a need to discuss measures through which Malta could remain sufficiently competitive to minimize the impact of a sudden surge in closures and unemployment. The overtime proposal was made for no other reason than to safeguard the jobs of thousands of employees as labour intensive companies in Malta and other European countries were relocating to less expensive destinations. The reality at the time was that although there were indications that foreign investment would increase during 2006 and 2007, as indeed it did, this was not a certainty. In these circumstances, employers acted responsibly and proposed a set of measures to address the situation, including that on overtime payment."

The MEA said the unions had opposed the proposal and submitted their own package to improve competitiveness. During numerous lengthy MCESD meetings that were held at the time, in which government also participated, different options for a Social Pact package were negotiated, and at one point the overtime proposal was dropped from the discussions. In the final package that was drafted in January 2005, when the Prime Minister himself intervened to reach agreement, there was no mention of the overtime proposal.

"Given the circumstances prevailing in 2004, employer bodies were realistic in proposing measures which, although unpopular, were intended to raise productivity and protect the livelihood of thousands of Maltese families. No one can take working conditions for granted, and productivity and competitiveness remain a prerequisite for any improvement in the national standard of living," the MEA said.