Government to review contracts that raise doubts on working conditions

The government will be reviewing contracts that have raised doubts about employment conditions for workers.

Most of these cases are in the cleaning and security sectors.

Marking Workers' Day, Prime Minister Joseph Muscat said the government was sending "clear signs" to employers who abuse workers' rights that they will no longer be eligible to win government contracts unless they change their ways.

Muscat also said that he was giving employers time "to make things right" before being excluded from government contracts.

Further questions sent to the Office of the Prime Minister confirmed that the government was now being "more vigilant" and taking steps to ensure that "no tenders which may lead to precarious employment are awarded to the companies pushing their bids".

The General Workers Union has since singled out a number of companies that it claims to be employing workers in precarious conditions.

The government is also looking at the Active Labour Market Policy (ALMP) - the long-term strategy to fight precarious employment, according to the OPM.

In comments to MaltaToday, Employment Minister Evarist Bartolo reiterated that the "relatively small number" of companies that abuse workers' rights will be "blacklisted" from government contracts.

"Precarious work will not be tolerated, and government will terminate contracts if it is found that precarious employment is taking place", Bartolo said.

ETC review key for creation of quality jobs

A review of how the Employment and Training Corporation operates has been deemed crucial for the proper implementation and eventual success of the ALMP - a policy designed by the Union Haddiema Maghqudin and endorsed by the government, political parties and a group of social partners.

Economist Clyde Caruana, who is now chairing the ALMP Counselling and Action Committee, warned that the time for talking was over and it was time to start sorting out priorities.

"For activation measures to be successful, first we have to have the necessary infrastructure in place", Caruana said.

ALMP, better known as Jobs+, seeks to create a holistic and long-term, active, labour policy that addresses the needs of the labour market. The argument is that a dynamic labour market with a high participation rate is ideal for economic growth.

Key to the success of the policy are more free childcare centres and an increase of the Klabb 3-16 schemes. Both were electoral pledges of the new Labour government.

Caruana said ETC must focus more on providing personalised services.

"Workloads in Personal Employment Services are too high. We must also introduce a culture where we start analysing the effectiveness and efficiency of our activation programmes," he said.

Such activation measures must unfold on a long-term basis: "We can't afford to have a successful scheme that comes to an abrupt end because funds run out. We have to plan in advance to ensure continuity."

Minister Bartolo told MaltaToday that the ETC must take a more proactive role within society, rather than simply being a crisis-management reference point when an individual cannot find employment or loses his job.

"It needs to help workers, including those already in employment, increase their skills and thus ensure long-term employability. It also needs to ensure that workers whose industries are facing radical changes are able to be retrained and remain an asset to the business," Bartolo said.

Working in parallel with this strategy is the Youth Guarantee - another electoral pledge of the Labour Party, informed by the EU's youth guarantee scheme.

"While Jobs+ aims to break down the barriers which individuals face currently through policies, the Youth Guarantee aims at providing training or education to those who are not employed," the minister said.

Eurostat data indicates that during the past decade, all new Member States, with the exception of Cyprus, grew at a faster pace than Malta.

"Assuming that real GDP per capita in the euro area had a value of 100, both in 2000 and 2012, it is quite clear from the diagram below that Central and Eastern European countries are growing more quickly compared to Malta," Clyde Caruana said.

Put simply, unless Malta takes the necessary steps to develop its economy, in a matter of decades Central and Eastern European countries will surpass Malta's standard of living.

"That is why Jobs+ is a step forward in giving the economy what it needs to improve," he said.

Together with its social partners, the government will be working to increase the employment ratio. Going by the EU target 2020, Malta has to reach 75% employability. However, current trends suggest that Malta is on course to reach an employment ratio of 69% by 2020.

"Through Jobs+, we're going to try to reduce the gap between the two targets as much as possible," Caruana explained. This will be done through the 'up-skilling' of the workforce, making work pay and increasing investment in the ALMP.

"Unless Malta creates a momentum whereby a substantial amount of workers are up-skilled, our economy won't develop and be more productive," Caruana warned. "Using education as a proxy for skills, it happens that, while just 19% of the EU27 workforce achieved secondary level as their highest level of education, the corresponding rate for Malta is 46%."

Caruana also describes the Maltese welfare system as being "very passive".

"The disincentives that kick in once a person on benefits decides to join the labour force are considerable. The marginal effective tax rate (the amount of tax deduction and benefit loss that a welfare beneficiary experiences once employed) can be as high as 110%. If this is compared to our highest tax bracket, 35%, it is self-explanatory why welfare beneficiaries are reluctant to take up work".

Another problem Malta faces is being third from last among all EU Member States when it comes to investment in the labour market.

"Education and training do not come to an end after university. We have to keep on investing, even in those who are highly qualified, let alone other segments," Caruana insisted.