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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.[1]

 

There are no official figures on the coverage of collective bargaining in Malta. However, a recent study on union membership at the Centre for Labour Studies in the University of Malta reported that estimates of the proportion of workers covered by collective bargaining ranged “between 50% and 61%”.[2] These figures are slightly above the estimates of union density, which are between 34% and 45% (see section on unions). There are no industry-level agreements to pull up coverage (other than in the public sector) but company-level agreements cover the whole workforce of the company concerned, even if only some employees are union members.

 

With no industry-level bargaining, there is no mechanism to extend the terms of collective agreements to employers who did not sign them. However, wage regulation orders fulfil a broadly similar purpose in setting minimum pay and conditions in several specific industries (see below).

 

The key rules for collective bargaining are set out in the Employment and Industrial Relations Act 2002 and subsequent regulations. Collective agreements can only be signed with unions, and, since regulations introduced in 2016, there are now specific rules determining which union has the right to conduct negotiations, in other words to be recognised by the employer (see below).[3]

 

Employers are obliged to submit copies of the collective agreements they have signed to the Department of Industrial and Employment Relations, and its annual reports show that, in 2019, there were 34 agreements registered (nine new ones and 25 renewals/extensions) plus nine side agreements. There is some fluctuation between the years with 81 agreements being registered in 2018 (four new and 77 extensions) and 69 being registered over a two-year period from January 206 to December 2017 (15 new and 54 extensions).[4] With agreements normally lasting three years, these numbers suggest that there are around 150 collective agreements that are updated on a regular basis, although this may be an underestimate. A Maltese industrial relations expert estimates that around 200 employers have signed collective agreements.[5]

 

Many of those 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, and cover issues such as minimum rates, breaks, annual leave rights, overtime premia and sick pay. At present 31 separate industries are covered, including private security, construction, travel agencies and food manufacturing.

 

Malta has a tripartite body for social dialogue at national level, the Malta Council for Economic and Social Development (MCESD), bringing together unions, employers and government.  The three main union groupings in Malta all have representation, the GWU and For.UM each have two, and the UHM and the CMTU (in which the UHM is the leading affiliate) have one each. The MCESD provides a forum for the parties to discuss social and economic issues, and in 2017 unions and employers reached agreement on an increase on the national minimum wage on the basis of a study commissioned through the MCESD.[6]

 

Who negotiates and when?

 

The Employment and Industrial Relations Act 2002 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”. However, a series of disputes, such as that between the GWU and the Malta Union of Bank Employees at the Bank of Valletta in 2014,[7] indicated that new legislation was needed to establish which union had the right to represent the employees.

 

The Recognition of Trade Unions Regulations 2016 provided new rules to establish which union the employer should be “recognised” when negotiating rights were disputed. They are based initially on the proportion of employees who are members of the unions seeking recognition, with a subsequent ballot of employees, if required.

 

The Regulations cover three possible cases. The first is where no union is recognised in an organisation and a union is seeking recognition. In this case the union must show that more than 50% of the employees in that organisation are its members, and, if it can do this, “the employer shall grant recognition to that union”. The second case is where a union is already recognised but another union wants recognition. Here the union requesting recognition must show that that it has more than 50% of the employees in the organisation as members. However, this, on its own, is not enough to win the right to negotiate. The union requesting recognition must also win a ballot of employees, although only union members in the organisation – both of the union already recognised and of the union requesting recognition – can vote. The reason why a simple membership count is not enough, and a further ballot is needed is because Maltese workers are sometimes members of more than one union. This is very clear in the third case covered by the legislation, which is where no union is recognised, and two unions are seeking recognition. In this case, if one union has more than 50% of employees and the other does not, the one with the majority in membership gains the right to ask for recognition. However, if two unions both have more than 50% of employees in membership, there is a ballot – again only of union members – to choose between them.

 

The process is overseen by a government official – the director of Industrial and Employment Relations – and is intended to produce a rapid result. The union or unions and the employer involved must provide lists of members and employees within 48 hours of a request and the whole process, from initial request to a decision on the recognised union, should be completed in 28 days. Union members are defined as those who are no more than three months in arrears in paying their membership fees. Once recognition has been granted no other union can make a request for recognition for at least one year. In addition, in an organisation where a union already has recognition, it cannot be challenged by another union in the three months before and three months after the expiry of the relevant collective agreement.

 

The 2016 Regulations have been broadly welcomed by unions and employers.[8] However, there is some concern that they have not dealt with the growing tendency for different unions to represent different categories of the workforce and sign separate agreements.

 

It is important to note that the procedure foreseen by the Regulations only applies where previously no union was recognised or where recognition is contested. In most organisations, union recognition is based on past practice.

 

In practical terms, negotiations are normally conducted by union officials, although they also take into account the demands of local union representatives and members.[9]

 

Agreements typically 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, in the public sector, which with 30,000 employees makes up a major part of the economy, the deals last longer. The 2012 settlement ran for six years, from the start of 2011 until the end of 2016, and the agreement reached in 2017 runs for eight, from the start of 2017 until the end of 2024.[10]

 

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. This pay increase, which is known as the “cost-of-living adjustment” (COLA) and is implemented annually through national standard orders, is linked to inflation, calculated on the basis of the Retail Price Index.

 

This annual increase, which comes into effect at the beginning of each calendar year is mandatory and must be given to all workers in Malta, with pro-rate amounts paid to part-time employees. 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. Generally, pay increases in collective agreements are in addition to the COLA.

 

There is also a national minimum wage. This is set by the government following recommendations from the Employment Relations Board, made up of representatives of the government, unions, employers and independent experts and also goes up by the COLA each year. In 2017 union and employers reached a three-year agreement on an increase to the national minimum wage over and above the increases provided by the COLA.

[1] For a detailed examination of collective bargaining in Malta see Malta: moving away from confrontation by Manwel Debono and Godfrey Baldacchino, in Collective bargaining in Europe: towards an endgame, edited by Torsten Müller, Kurt Vandaele and Jeremy Waddington, ETUI, 2019

[2] An analysis of trade union membership in Malta, by Manwel Debono, Xjenza, 2018, Volume 6, Issue 1 https://www.um.edu.mt/library/oar/bitstream/123456789/33871/1/Xjenza%2c_6%281%29_-_A6.pdf  (Accessed 24.04.2020)

[3] Recognition of Trade Union Regulations, 2016

[4] Annual Reports of Department of Industrial and Employment Relations:

https://dier.gov.mt/en/About-DIER/Archives/DIER%20Annual%20Reports/Pages/DIER%20Annual%20Reports.aspx  (Accessed 24.04.2020)

[5] Godfrey Baldacchino quoted in Would you agree with compulsory union membership? By James Debono, Times of Malta, 8 November 2018 https://www.maltatoday.com.mt/news/budget-2019/90748/would_you_agree_with_compulsory_union_membership#.XrBWoKhKiUk (Accessed 24.04.2020)

[6] Malta: Latest working life developments – Q2 2017, by Saviour Rizzo, Eurofound https://www.eurofound.europa.eu/publications/article/2017/malta-latest-working-life-developments-q2-2017 (Accessed 24.04.2020)

[7] GWU holds MUBE responsible for damages in BOV dispute, Times of Malta, February 2014, https://timesofmalta.com/articles/view/gwu-holds-mube-responsible-for-damages.505760 (Accessed 24.04.2020)

[8] See Solved: the quest for trade union recognition by Vanessa Macdonald, Times of Malta, January 2017 https://timesofmalta.com/articles/view/Solved-the-quest-for-trade-union-recognition.636316 (Accessed 24.04.2020)

[9] Malta: moving away from confrontation by Manwel Debono and Godfrey Baldacchino, in Collective bargaining in Europe: towards an endgame, edited by Torsten Müller, Kurt Vandaele and Jeremy Waddington, ETUI, 2019

[10] New collective agreement for public service is the first of its kind, Public Service Government News, 20 April 2017 https://publicservice.gov.mt/en/Pages/News/2017/20170420_FtehimKollettiv.aspx (Accessed 24.04.2020)

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.