NEWS | Wednesday, 30 April 2008

Unions, employers disagree on need for new social pact

For: FOI, COC, MHRA, GWU
Against: UHM, MEA
Undecided: CMTU

Charlot Zahra
Social partners had divergent views about the proposal for a new social pact made by Central Bank of Malta (CBM) Governor Michael C Bonello during the presentation of the CBM’s annual report last Thursday.
General Workers’ Union (GWU) Secretary-General Tony Zarb said that “the GWU has been saying for a long time that it is not against a social pact, but the GWU would surely be strongly against that the burdens of a social pact are shouldered by workers only, as was the case after the last discussions about the social pact when the Government arbitrarily put all the burden on workers.”

Union Haddiema Maghqudin (UHM) Secretary-General Gejtu Vella also seemed sceptical about a new social pact. “In the current economic situation the UHM would rather negotiate an agreement with Government and Employers’ Organisations for a defined period of time.
“A brokered agreement between the social partners will ensure that Government, Employers’ and Workers’ interests which initially may be seen to be divergent will have to converge to create economic growth, employment and social justice,” Vella told Business Today.
Confederation of Maltese Trade Unions (CMTU) President William Portelli said that the Confederation still needed to consult its members about the position to take about Bonello’s proposal for a new social pact.
“As a Confederation, it may be too early to come to conclusions and even if CMTU had to propose or agree to such a statement it would only happen after all affiliates at CMTU have been consulted.
“However, one must not underestimate Governor Bonello’s proposal since Central Bank would normally have quite good and accurate assumptions and indicators of the economy’s present and possible future performance,” Portelli told Business Today.
Malta Employers’ Association (MEA) Director-General Joe Farrugia also sounded sceptical about new social pact. He said Bonello’s presentation revealed that, “over a number of years, wage increases outstripped productivity gains in Malta, and that the widening gap between wage increases and productivity increases is not sustainable.
“Before any attempt to renew discussions for a Social Pact is to materialise, unions must declare whether they agree with the analysis of the Central Bank Governor, and whether they believe that such a situation is sustainable indefinitely.
“It must also be pointed out that even minor actions to improve the situation, such as the public holidays measure, was met with hostility and the GWU is still raising the matter at the ILO. This background does not augur well for future attempts at discussing a social pact,” Farrugia told Business Today.
However, other employers’ organisations were more optimistic about the possibility of a new social pact. Federation of Industry (FOI) Director-General Ray Muscat said that the Federation was among the social partners, which had attempted to push forward the country’s competitiveness agenda through the formulation of a social pact.
“The failure to derive such a pact resulted in a somewhat diluted unilateral approach by government in implementing a limited set of measures.
“The FOI remains committed to undertaking constructive dialogue with all social partners towards formulating and implementing priority measures for competitiveness,” Muscat told Business Today.
The Chamber of Commerce and Enterprise (COC) is strongly in favour of re-starting the negotiations for a new social pact. A spokesperson for COC said: “The Chamber is calling on its fellow social partners to re-engage in talks on the Social Pact.
“In fact, it has sent correspondence to both the Parliamentary Secretary for Public Dialogue and Information Chris Said and MCESD Chairman Sonny Portelli to convene an urgent meeting of the Council to discuss the need for these above mentioned talks on the Social Pact to kick off without delay,” he revealed.
MHRA President Josef Formosa-Gauci said that the Association has always been of the opinion that a social part is “undoubtedly the best way forward for the Maltese economy.
“It was for this reason that MHRA had participated fully in the attempt to reach an agreement on a Social Pact when this was being discussed and was very disappointed when the negotiations failed.
“We are still of the opinion that if an agreement is at all possible every attempt should be made to conclude a social pact,“ Formosa-Gauci told this newspaper.

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