Increased union rivalry causing 'industrial unrest' - MEA

The state of industrial relations is characterised by increased rivalry among unions that is some cases has been the cause of industrial unrest, the Malta Employers Association has stated.

According to MEA, this was a cause of concern among major manufacturing and service companies in Malta.

“MEA has been pushing for an upgrade of the labour legislation to have a smoother and clearer resolution of such conflict,” it said.

The MEA today issued its proposals for Budget 2016, during which it also expressed concern over the recent stronger emphasis on the so-called North-South divide.

“The Association believes that there is only one labour market in Malta, and employers do not discriminate among employees of job applicants according to their village of origin. Regional issues have to be tackled cautiously,” MEA said.The MEA said the National Budget for 2016 was being presented against a backdrop of a global economy which is sluggishly emerging from the wreckage of the international recession, with many developed economies experiencing economic growth above the average experienced during the past seven years.

MEA said that the low price of global oil prices and spare capacity in many economies are enabling such expansion to occur with minimum inflationary impact. However, the fragile recovery is being threatened by political turmoil in many countries, and the stock market situation in China may also affect global economic performance in the coming months.

“Malta is, thus far, an oasis surrounded by political tensions in North Africa and the Middle East, yet our country is also witnessing first-hand the consequences of massive immigration which is afflicting many European countries,” MEA said.

Malta has had an overall positive economic performance during the past year, with the main economic indicators pointing towards low inflation, a sustained fall in unemployment and GDP growth which is higher than the EU average.

MEA said tourism figures were encouraging and generating an expansion in rental accommodation together with employment opportunities.

The labour market is becoming characterised by skills shortages and labour mobility, combined with a strong influx of foreign workers. Employment in the public sector has increased and is in itself causing a drain on the human resource in the private sector.

There are indications that the Maltese economy is heading towards a boom period, which is positive in some aspects but also presents challenges, MEA said.

As the economy heats up, prices may tend to rise ahead of productivity gains and this may affect competitiveness. In the labour market, wage inflation due to labour shortages can affect vulnerable sectors such as manufacturing.

Some economic sectors may afford to ride the inflationary effects of economic activity, but others may be more vulnerable due to international competition and low profit margins. A sudden increase in costs will limit their ability to retain competitive advantages.

The increase in economic activity will invariably generate a demand for all resources and can cause a strain on natural resources and the environment. The recent debate about the positioning of the foreign educational institution is a case in point. Traffic congestion is also being partly caused by increased economic activity. Radical, long term solutions may be required to resolve this issue.

“Therefore there should be a strategy to reap the most out of this economic expansion, which is being brought about by the private sector, whilst minimising the inflationary and negative environmental side effects in order to make it sustainable.” it said.

Sustained growth is also essential in retaining the improvements made during 2015 in the fiscal deficit, which is currently below 3%.

“This makes the role of social dialogue even more important, and MEA appeals for proper consultation with the social partners before the introduction of budgetary measures that may have an impact on businesses and economic activity.”