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Financial Participation

It wasn’t until the privatization wave in the 1990s that a stock exchange was opened in Malta. Since then, public interest in share-ownership has risen slightly accompanied by a slight growth in employee financial participation schemes. Even so, the incidence of employee financial participation in Malta is low in comparison with other European countries.

In spite of the close historical ties with Great Britain, in which the origins of Maltese company law are to be found, employee financial participation is not very prevalent in Maltese companies and enjoys little political support. If at all, it is offered by large private companies.1

The nationalisation programme of the 1970’s and the contrasting privatization programme of former state-run companies of the 1990’s both had their effect on the introduction of employee financial participation schemes in major companies. The Maltese Stock Exchange was founded in association with the privatization process. Most operational employee financial participation schemes in such privatized companies are employee share ownership schemes, albeit on a low level.

In the majority of companies offering employee financial participation schemes, employees are in trade unions. The unions support such schemes. Since 1996 public sector employees have also been given the opportunity of profit-sharing in cooperatives. There are at present two cooperatives in this area, with a total of 100 employees, offering a profit-sharing scheme.

There is little empirical data available on Malta. The findings of the European Working Conditions Survey 2010 (EWCS) put the incidence of profit-sharing schemes in private sector companies at 4% and employee share ownership at just 1%.2 According to the results of the “European Company Survey“ (ECS, 2009), a survey of more than 27,000 HR managers in Europe, a mere 4% of private-sector Maltese companies with 10 or more employees offer their employees a profit-sharing scheme, way below the 30-country European average of 14%. Employee share ownership schemes are similarly little widespread, only being offered by 3% of companies, that is, below the European average of 5%.3 The PEPPER IV Report puts the prevalence of employee share ownership schemes in companies with more than 200 employees at 6%, with 24.2% of employees working in such companies actually taking part.4

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.