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No risk-free workplace

Trade unionists have a mission to protect workers’ interests and reduce the risks that exist in every workplace. This duty is often interpreted as meaning the proper management of health and safety risks. But business life presents various other threats that can often affect employees negatively.

The UĦM Voice of the Workers CEO Josef Vella, speaking in a Workers’ Day conference, dwelt on various current issues being discussed at a national level. One issue that was original and stimulated some discussion relates to the possibility of creating a ‘wage protection fund’ managed by a court-appointed administrator. Mr Vella argued that workers should not suffer because of the administrative failures of employers.

He elaborated on a particular incident where a group of employees working for a private firm did not receive their salary after their employer’s bank blocked payments due to a legal dispute. While one sympathises with these employees, the solution is indeed not one where employees working for different employers, or even taxpayers, should contribute to a fund to cushion the effect of such financial risks in poorly managed companies.

‘Administrative failures’ could be a euphemism for inept management by employers who knowingly or unknowingly expose their employees to unnecessary financial hardships by mismanaging their business. There are, of course, labour laws that impose various onerous obligations on employers to protect the interests of their workers. These laws include the payment of wages and salaries, the national insurance contributions, as well as the provision of a safe and healthy working environment.

The law enforcement authorities should ensure that these laws are respected by all employers at all times. If this enforcement is not being efficiently done on all employers, one cannot expect that competent employers should bail out incompetent employers by financing the wages of workers that remain unpaid because of ‘administrative reasons’.

Banks help oil the mechanisms of the business processes. This function implies they have a right to protect their shareholders’ and depositors’ interests by ensuring their clients stick to their agreements. If an employer who is a bank client fails to abide by the conditions agreed with his bank, then he has to face the consequences for such a breach including the blocking of his accounts.

The realities of a free economy are that some employers are not competent enough to manage their business. It also means that at times, despite good management, market forces drive certain enterprises out of business. Admittedly, workers are usually the ones to suffer most from such circumstances. This is where policymakers should ensure that worker protection laws are in place and enforced at all times.

But the idea of a court-appointed administrator who would act in consultation with management, unions and employees to resolve employers’ administrative failures would be no more than promoting the use of the money of well-managed businesses to subsidise poorly managed enterprises. In the long-term, this will create undue hardships for efficient employers and their workers.

Industrial relations policymakers need to be more visible in naming and shaming employers who show little respect for their workers by not ensuring the wages for work done are ring-fenced from the company’s other financial assets.  While no workplace is risk-free, inept business managers are undoubtedly dispensable.

This is a Times of Malta print editorial

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