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Collective Bargaining

The key level for collective bargaining is the company level. There is also protection for those not covered by collective bargaining through a series of wage orders for specific industries that set minimum terms, and a system of partial pay indexation through “cost-of-living” adjustments”.

The framework

Collective bargaining in Malta takes place at company level at least in the private sector. Only the public sector normally negotiates common conditions across a range of workplaces.

With no agreements at industry level, the number of employees covered by collective bargaining is slightly above the level of union density. EIRO estimates that a realistic estimate for the coverage of collective bargaining is 61%.1 There is no legal obligation on employers to negotiate with the union – to grant “recognition” (see below). However, in practice the employer will normally grant sole recognition to a union in a particular workplace if it has more than half of the employees in that establishment as its members, although there are also increasingly cases where different unions are recognised for different groups of workers (see below).2

Figures from the Department of Industrial and Employment Relations show that in 2011 there were six new collective agreements, 15 renewals/extensions and two other addendums or amendments to existing agreements.3 This is a smaller number of agreements than in previous years.

Many of those who are not covered by collective agreements are, however, covered by minimum conditions of employment set by the government. They are mainly set through “wage regulation orders”, which apply to specific industries, or “national standard orders” which have more general application. Wage regulation orders are made following recommendations from a board for the industry concerned made up of unions, employers and government-appointed experts. At present 31 separate industries are covered, including private security, construction, travel agencies and food manufacturing.

Malta has a tripartite body, the Malta Council for Economic and Social Development (MCESD), bringing together unions, employers and government. Tripartite negotiations have so far not played a central role in collective bargaining and attempts to develop a social pact to improve Malta’s competitiveness have not been successful.

Who negotiates and when?

The law provides for collective agreements to be negotiated between “an employer, or one or more organisations of employers, and the organisation or organisations of employees representing the employees”. In practice they are normally negotiated between a single employer and one or possibly two unions, although there is a growing tendency for different unions to represent different parts of the workforce and sign separate agreements. In Air Malta, for example, there are four separate unions representing pilots, cabin crew, engineers and industrial and non-industrial staff. Of the 23 agreements and other texts signed in 2011, 16 were signed by the GWU, five by the UHM, one by MUMN and one by the Malta Dockers’ Union.4

Agreements normally last three years, but in certain circumstances, where the conditions in the company concerned justify it, they may only last one or two years. However, the 2012 deal for the whole of the public sector runs for six years, from the start of 2011 until the end of 2016.

The subject of the negotiations

Agreements cover a wide range of issues including pay, working time, health and safety, grievance and disciplinary procedures, bonuses and sick pay.

There is not a full system of pay indexation, but the government sets minimum amounts – in absolute figures rather than in percentages – by which pay should go up each year. These pay increases, which are known as the “cost-of-living adjustment” and are implemented through national standard orders – are linked to inflation, calculated on the basis of the Retail Price Index. Collective agreements should include the cost-of-living forecasts on which they are based, and if the increase in the agreement is less than the cost-of-living adjustment, pay must be increased by an additional amount to make up the difference.

There is also a national minimum wage. This is set by the government in line with recommendations by the Employment Relations Board, made up of representatives of the government, unions, employers and independent experts.

L. Fulton (2015) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.