Employee board-level representation in Malta is found only in a few state-owned or recently privatised companies. Both unions and employers were consulted on legislation implementing the directive but do not seem to have given the issue a high priority and there was no public debate.
Only very few companies in Malta have employee representatives at board level, and, with the exception of companies owned either by the GWU, one of the two main union groupings, or the social democratic Malta Labour Party, they are all either state-owned or recently privatised.
Past experience of worker participation through “workers’ committee” which played a part in running state-owned companies has been unhappy, and there is no tradition of employee representation, other than through the unions (see Saviour Rizzo 2004). These and other factors, such as the lack of larger Maltese-owned companies with operations across Europe, and the range of other EU legislation which Malta transposed at the same time, may explain the lack of interest in the transposition of the directive. It was, however, discussed in the Employment Relations Board – a tripartite consultative body which consists of representatives of unions and employers and members appointed by government. There is no evidence of any wider public debate.
Directive was transposed by law in 2004 just after the deadline of 8 October 2004.
The directive on employee involvement in European companies was transposed through the regulations made by Minister of Education, Youth and Employment on which were published in the Government Gazette of Malta on 22 October 2004, two weeks after the deadline of 8 October 2004. The title of the legislation which was published as Legal Notice 452 of 2004 was Employee Involvement (European Company) Regulations 2004 (Regolamenti ta’ l-2004 dwar Involviment ta’ l-Impjegati (Kumpannija Ewropea).
It is not clear whether separate legislation has been passed to adapt company legislation in Malta to the Regulation on European companies.
Special negotiating body (SNB)
Maltese SNB members are elected directly by the employees.
The legislation sets out in detail how members of the SNB from Malta are appointed. They are elected by the employees with management responsible for the arrangements for the holding of the ballot. However, the management is required to consult with employee representatives on the arrangements for the ballot and appoint an “independent ballot supervisor” to oversee the vote. The ballot supervisor informs the employees that the ballot will take place, sets the date and publishes the results. He or she can also state that the ballot was unfair and individual employees or employee representatives can also make complaints about the fairness of the procedure (Regulation 5).
External union representatives can be SNB members in Malta, but only if the management agrees.
The Maltese legislation specifically states that a representative of a trade union who is not an employee may stand for election to the SNB, but only “if the management of that participating company so permits” (Article 5).
Funding limited to a single expert.
The legislation limits the costs to a single expert (Article 6).
Standard rules under the fallback procedure
The method for choosing Maltese members of the SE representative body is not spelled out in the legislation; it is left to the SNB.
The legislation does not lay down specific rules on how Maltese members of the SE representative body, known in the Maltese legislation as the representative body (Il-korp rappreżentattiv) should be chosen. It only sets out briefly how the members of the representative body overall should be chosen. They should be elected or appointed by the employees’ representatives in the company, or if there are none by “the entire body of employees”. It is left up to the SNB to decide how this should be done. As the legislation states, “the election or appointment of members of the representative body shall be carried out by the special negotiating body, in accordance with any method it adopts”. However, in contrast to the SNB, only employees can be members of the representative body, not external trade union representatives (Schedule Part 1).
The company should bear the costs of the representative body, including a single expert.
The company is obliged to bear the costs of the representative body, so that its members can “perform their duties in an appropriate manner”. These include the expenses of “one expert only” (Schedule Part 2).
There are no specific national rules for the choice of Maltese employee representatives at board level. The legislation only deals with the overall situation, where the choice is left to the representative body.
The legislation does not include national rules for the choice of employee board-level representatives from Malta. It deals only with the overall situation, where it repeats some of the wording of the directive and states that it is for the representative body to decide on the way in which “the SE’s employees may recommend or oppose the appointment of the members of these [board-level] bodies (Schedule Part 3).
Misuse of procedures and structural change
Misuse of procedures is banned, although with little detail as to what this might mean, or what the response should be.
There are no specific details what might constitute misuse of procedures. However, the legislation does that that “no person shall use an SE for the purpose of depriving employees of rights to employee involvement or withholding any such rights” (Article 14). The legislation does not, however, state that in such circumstances negotiations should be reopened.
The Maltese legislation does not provide for renegotiation after structural change.
There is no automatic right to renegotiate the agreement if there are changes in the structure of the SE.
Unions and employers were consulted on the introduction of the legislation. However, there is no evidence of a debate.
Unions and employers were involved in the discussions on the transposition of the directive on employee involvement in European companies into law in Malta, as the issue was discussed in the Employee Relations Board. However, there is no evidence that either side took up clear positions on the proposal, although the general line of the employers has been to resist developments which they feared might reduce their freedom of action.
L. Fulton (2008) Anchoring the European Company in National Law - Country Overviews (online publication, prepared for worker-participation.eu)
The Maltese law on employee involvement in the European Company (SE) was adopted in October 2004. The Malta Financial Services Authority (MFS), which manages Malta’s Registry of Companies, has still not issued the regulations governing the Act that transposed the SE Directive.
According to the views expressed by officials of this Authority, the prospects of Maltese companies setting up an SE in Malta are very slim. Moreover they maintain that the law is too complicated. According to the lawyer working in the registry of companies of this Authority, to date there have only been a couple of queries about SE from lawyers.
Saviour Rizzo, Workers’ Participation Development Center, University of Malta
The SE Directive has so far not been transposed into Maltese law. It is being debated at the Employment Relations Board, which is a tripartite consultative body comprising four employees’ representatives and four employers’ representatives, together with four members appointed by the government. This board has to be consulted by the minister before publication of the legal notices embodying the detailed regulations implementing the Employment and Industrial Relations Act (EIRA, 2002).
The passing of regulations by means of legal notices in parliament rather than amendments to the Act proper is the preferred flexible method chosen to keep the act up to date with any changes which may be required, including the coming into force of EU social policy directives, such as the SE directive. Transposition of the SE directive following recommendations made by the Employment Relations Board would take place by means of such a legal notice.
There have been no position papers or other responses from the social partners on this directive. One reason may be that the Maltese social partners are still trying to take on board the new legislation, enacted a few months prior to EU accession in order to bring Maltese industrial relations into line with the EU acquis communautaire. The changes introduced into the law (EIRA) that came into force in December 2002 include parental leave; guarantee fund regulations; fixed-term contract regulations; information and consultation regulations; collective redundancies; transfer of businesses (protection of employment); working time organisation; and European Works Councils. The effects and implementation of these new regulations are still being monitored by the Maltese social partners.
Moreover, industrial relations in Malta are based on the British rather than on the European model. Indeed, Maltese trade unions have a workplace representative, known as a “shop steward”, who is the effective link between trade union officials and management. It is mainly through shop stewards that trade unions can monitor what goes on at the workplace, and by and large, Maltese trade unions tend to invest heavily in their informal and formal education. The culture of workers’ participation in the workplace is embodied in the functioning of the shop stewards rather than in a tradition of institutional representative bodies. Works councils are conspicuous by their absence. Even board-level employee representation is rather limited: at present there are only 14 worker directors in Malta, and, with the exception of the two in firms owned by the largest trade union, these worker directors are to be found in state-run or state-owned enterprises.
Either because the Maltese social partners are still digesting the new regulations or because of this lack of a worker participation culture at enterprise level the SE directive has, so far, not stimulated any debate among the social partners. Many employers deem the new regulations embodied in the EIRA (2002) too cumbersome. The employers seem to believe, implicitly or explicitly, that what they term excessive labour market regulation, far from being a sensible response to slower growth may be the cause of it. This view has been endorsed by the Director General of the Malta Employers’ Association (interview 19 July 2004). The employers are therefore proposing that Maltese industry be given some breathing space to enable it to adjust to the new situation, especially at a time when economic growth has slowed down and the Maltese economy is still undergoing restructuring. This plea may not go unheeded by the legislators.
However, at this stage nothing is certain. Transposition of the SE directive is still in the drafting process which entails a series of deliberations and consultations by the minister and the Employment Relations Board.