Government in ‘delicate negotiations’ with employers to bring them back to MCESD table before budget

Government is reportedly engaged in delicate negotiations with the Malta Employers Association, in a bid to convince its representatives to return to the Malta Council for Economic and Social Development (MCESD) two months after it announcedit was suspending its participation from all structures of social dialogue in which the Government was involved, over GRTU director-general Vince Farrugia’s nomination to the EESC, despite the fact that the GRTU was not an employers’ organisation as prescribed by EESC rules.

MaltaToday is reliably informed that government has proposed a ‘rotation’ system to the MEA, whereby a representative from the MEA will take over from Vince Farrugia half-way through his term on the EESC.

While MEA representatives refused to comment about the ongoing negotiations with government, it is understood that the proposal was already shot-down after being described by the association of being “too short-sighted.”

The negotiations have been initiated by government through Finance minister Tonio Fenech and Parliamentary secretary Chris Said who are doing all they can to salvage the MCESD consultation process by having the employers body on board, especially at this time of the year when the pre-budget document is being discussed.

According to sources, should the MEA keep away from the MCESD, it may derail government’s budget schedule and plans to push through important reforms – such as the reform in the second pillar of state pensions – which needs ‘collective’ backing from all social partners at MCESD level.

Last July,MEA President Pierre Fava warned: “MEA cannot accept this arrogance from Government, when referring to GRTU boss Vince Farrugia’s appointment on the EESC.

“Under these circumstances, MEA feels that in the absence of good faith from the Government, it will suspend its attendance in social dialogue forum in which the Government is represented,” Fava had said.

Fava had explained how that through the Malta Council for Economic and Social Development, employer representatives had nominated Stefano Mallia and Lawrence Mizzi to represent employers. However, the Government had  nominated Farrugia as the employers’ representatives despite the fact that Farrugia was not going to take up the post full-time in Brussels as the employers’ organisations’ nominee had proposed.

Fava and MEA Director-General Joe Farrugia had accused the government of succumbing to the GRTU’s arm-twisting tactics and accepting Farrugia’s nomination to the post.

They insisted that this “illegal” situation had persisted since 2004 with the nomination of GRTU representative Sylvia Gauci to the European Economic and Social Committee, despite the fact that she was not an employers’ representative.

Before Malta joined the EU in May 2004, the two employers’ representatives on the EESC were Edwin Calleja and Lawrence Mizzi, nominated by the FOI and MEA respectively. However soon after accession, Mizzi had learnt when he went for a meeting in Brussels that he had been replaced by Sylvia Gauci. MEA was never officially informed about this by the government.

Back then, MEA had made it known to Prime Minister Lawrence Gonzi that Gauci’s nomination was “anomalous” because GRTU represented SMEs and should have been part of Group 3, not Group 2, which only included employers, hence employers were being misrepresented in the EESC.

The MEA also insisted that Gauci was actually participating in Group 2, and “acting on behalf of employers without ever having been nominated by either FOI, MHRA, COC or MEA”.

In 2006 there were fresh calls for nominations. In spite of MEA’s efforts, GRTU had retained their hold on EESC despite the fact that, once again, she had not been nominated by any of the four employers’ organisations at the time.

The reasons given by Castille at the time was that they had accepted that the situation was “anomalous”, but given that the delegates had only occupied their posts for less than a full term of four years, the Government had decided that “for continuity’s sake” the same delegates should have retained their seats for another term.

Once more, MEA had “strongly disagreed” with this decision. The unofficial feedback from Castille had been that the situation “will definitely be rectified” in the next round of nominations, the MEA insisted.

The EESC is a forum of civil society organisations which consult the European Council, the Commission, and the Parliament in policy development. MEA is saying it is now determined not to accept a GRTU representative at the EESC, because as a small business chamber it should be represented elsewhere. MEA has 400 members representing more than 50,000 employees.

“It would be an injustice to be left out of EESC, particularly if its place is taken by an organisation which is supposed to represent SMEs which are in a different group than employers,” MEA has insisted, which is now withdrawing from the Malta Council for Economic and Social Development and the Malta-EU Steering Action Committee (MEUSAC).

GRTU have claimed that there was an agreement between Prime Minister Lawrence Gonzi and MEA that this association would be the employers’ representative on the International Labour Organisation (ILO) and that the GRTU would represent employers on the EESC. According to the GRTU, this agreement justified their seat on EESC.

MEA has insisted that such an agreement “never happened” and challenged GRTU to state when this agreement came about, and with whom. MEA said it was “certain that there was no verbal or written agreement to that effect”.

It also called on the Prime Minister – once it was being claimed that that he was party to this agreement – to “state whether such an agreement was signed or agreed to verbally, or to deny that anything of this sort ever happened”.

Meanwhile GRTU director-general Vince Farrugia has brushed off the accusations by theMEA that his nomination to the EESC is ‘illegal’.

Farrugia said MEA’s director Joseph Farrugia was only showing his “petty jealousies” at not being appointed to the European Economic and Social Committee – a forum of civil society groups that consult with the EU at all levels – and that the MEA was “bonkers” to have withdrawn from the MCESD in protest.