Five years after the ill-fated social pact of 2004, speaking during a conference organised by the newly-formed Ghaqda Unions Maltin on Thursday, Social Policy Minister John Dalli suggested the revival of the tri-partite discussions between Government, the Unions and employers’ organisations in order to improve the country’s competitiveness. CHARLOT ZAHRA spoke to UHM Secretary-General Gejtu Vella, MCCEI President Helga Ellul, MEA Director-General Joseph Farrugia, GRTU Director-General Vince Farrugia and MHRA Chief Executive Officer George Schembri on whether they were ready to re-commit to the social pact and under which conditions
Joseph Farrugia : “A clear commitment by all social partners on the objectives before starting is needed”
What is the MEA’s reaction to John Dalli’s suggestion? Does the MEA agree with the reviving of the social pact, as Minister Dalli is suggesting? Any discussion about the Social Pact can only make sense if there is a clear commitment by all social partners that the objectives of such an exercise are to take concrete measures at national level to improve productivity and competitiveness. Otherwise the exercise will be a waste of time and energy.
Why would the MEA agree with reviving the social pact? It needs to be reminded that the last time an effort was made to have a Social Pact, employer bodies took an active part in the discussion and, after long and tortuous meetings, gave their consent to a package that, even though reduced to the barest minimum that could be expected for it to have any significance on economic growth, was still rejected by the unions.
It was disagreement in the union camp that put a halt to the Social Pact, and not disagreement between employers, unions and government. In fact, government had also agreed to the final package.
As things stand today, I do not envisage that there will be consensus between the unions on a package to improve Malta’s competitiveness.
Should the MCESD be used as the forum where the social pact discussions should be held or should it be under a different tripartite negotiating model structure to the MCESD? I strongly believe that the MCESD is the proper forum where such discussions can be held. The Social Pact is the result of social dialogue, and the MCESD is the key institution where social dialogue, on a tripartite basis, takes place.
Did you expect to be consulted by the Finance Minister before he made this announcement? I think the minister has every right to his opinion about the Social Pact. God forbid that a Minister should ask permission before expressing his views on such a topic.
In view of the fact that last time around, the discussions on the social pact had failed, what should be done differently by the government and the social partners to ensure success this time?
For a social pact to materialise, short term sectoral interests have to be sacrificed in favour of the national, collective gain. This requires a high level of maturity both between the social partners themselves, and within their respective camps as well.
Joe Farrugia is the Director-General of the Malta Employers’ Association’ (MEA)
Helga Ellul (MCCEI): “No need for formal Social Pact negotiations as long as its objectives are reached”
What is the Malta Chamber of Commerce, Enterprise and Industry’s reaction to John Dalli’s suggestion? Does the Malta Chamber agree with the reviving of the social pact, as Minister Dalli is suggesting? The Malta Chamber of Commerce, Enterprise and Industry (MCCEI) believes that the timing is right for all social partners to discuss issues relating to the enhancement of Malta’s medium and long-term competitiveness position and supply capabilities.
Discussions are already underway within MCESD on possible measures to support the local economy within the ambit of the international economic situation.
To this end, the Malta Chamber has submitted a number of position papers to the MCESD and the relevant authorities.
The support measures are crucial in the short-term and beyond, as it is expected that the competitive scenario on the international scale will be significantly different in the aftermath of this global situation.
For this reason, the Malta Chamber does not necessarily agree that the social partners need to enter into formal Social Pact negotiations, as the scope of the above discussions suit the ultimate objective of a Social Pact – that is, ensure long term competitiveness for the furtherance of long term economic and social sustainability.
Should the MCESD be used as the forum where the social pact discussions should be held or should it be under a different tripartite negotiating model structure to the MCESD? The Malta Chamber agrees that discussions pertaining to economic and social sustainability take place between all stakeholders within the existing forum of MCESD.
Economic and social sustainability is not the monopoly of any of the stakeholders. Indeed, all parties, that is the government, the private sector and workers’ representatives must contribute equally towards ensuring that sustainability targets are met.
In view of the fact that last time around, the discussions on the social pact had failed, what should be done differently by the government and the social partners to ensure success this time? Since January of this year, MCESD has met on more than one occasion to discuss economic support measures. In the meantime, the Malta Chamber has also been consulted separately with the Minister of Finance and other national authorities.
In the view of the Malta Chamber, economic support measures must include a combination of short-term and longer-view measures that assist local economic operators to achieve higher levels of competitiveness.
This enhanced level of competitiveness is particularly required at this present juncture to counteract the effects of lower demand from abroad for our physical and so-called invisible exports.
Nevertheless, the Malta Chamber is also insisting within these discussions that any measures taken to counteract the short-term situation must not preclude the country from achieving its medium and long-term economic objectives, namely public finance targets and the expansion of competitiveness and supply capabilities.
Besides, the natural and ongoing process of economic restructuring should not be disturbed though it is now ever more crucial that any resulting employment losses from this process are minimal.
The importance of defending the country’s medium and long-term vision is of key importance when considering the possibility of a tighter competitive scenario when the world emerges from the current situation.
The Malta Chamber augurs that the situation and ensuing proposed measures by all stakeholders are discussed with a view to render the country more competitive at both the micro and macro levels.
If this is achieved, then the social partners would have succeeded in making significant progress towards a sustainable future for workers and employers alike – as stated above, this is, after all the ultimate objective of any social pact discussions.
Helga Ellul is President of the Malta Chamber of Commerce, Enterprise and Industry
George Schembri (MHRA): “A social pact would make long-term planning for businesses more effective”
What is the MHRA’s reaction to John Dalli’s suggestion? Does the MHRA agree with the reviving of the social pact, as Minister Dalli is suggesting? The MHRA had very actively participated in the previous discussions that were supposed to lead to a social pact. The MHRA believes that such a pact could be beneficial to the island and as long as all social partners have a clear understanding that this is an ideal objective then the MHRA would be fully behind the revival of discussions in this regard.
The MHRA would effectively agree with the revival for the simple reason that it would make the overall work landscape much more manageable and enable longer term planning for businesses.
Under what conditions would the MHRA be ready to accept to revive the social pact? Under the premise that all social partners would agree up front that a social pact is a desirable objective.
In view of the fact that last time around, the discussions on the social pact had failed, what should be done differently by the government and the social partners to ensure success this time? The MHRA would not like to see a repeat of the previous discussions where a great deal of time and effort came to a very abrupt end due to one of the social partners pulling out at the eleventh hour.
Should the MCESD be used as the forum where the social pact discussions should be held or should it be under a different tripartite negotiating model structure to the MCESD? It should be under the MCESD. We do not need another body to have this discussion.
When do you expect the MCESD to hold such discussions on the matter?
We have no idea on that.
Did you expect to be consulted by the Finance Minister before making this announcement out in the blue? Not really.
George Schembri is the Chief Executive Officer (CEO) of the Malta Hotels and Restaurants Association
Gejtu Vella (UHM): “Today most organisations realise that it could have been better for all stakeholders to enter into a national agreement”
The UHM had already promoted the concept of a national agreement between the social partners. Hard headedness and sheer short-sightedness of the leadership of one organisation agreement was not reached.
After five years, the UHM still holds to the position that a social pact for Malta could have been, and is still, an appropriate instrument to combat the present ills of the international financial and economic downturn.
The protection of jobs and the creation of new and better ones in various fields of the economy remain central on the UHM’s agenda. Sustaining our welfare system is of paramount importance to the UHM.
However, the benefits and services that are provided for from our social security system can only be sustained if this small nation can manage to secure the largest number possible of productive persons in our work places.
It has been five years since the failure of the agreement between the social partners. Today most people and organisations realise that it could have been better for all stakeholders to enter into a national agreement.
In these present economic and financial turbulent times, a national effort between the social partners at MCESD would in no small measure earn this small nation credibility and the necessary determination to combat recession. Trade unionism is not about broad shoulders and slogans; it is about securing a future for our members in particular and society in general in a bleak world economic scenario. Gejtu Vella is the Secretary-General of the Union Haddiema Maghqudin UHM)
Vince Farrugia (GRTU): “In the absence of a continuous discussion on the social pact at MCESD level, MCESD might as well close shop”
What is the GRTU’s reaction to John Dalli’s suggestion? Does the GRTU agree with the reviving of the social pact, as Minister Dalli is suggesting? GRTU agrees for discussions on the drawing of a social pact to start again. Discussions should now be based on the current economic situation and prospects for the economy for the next 5 yrs.
It is irrelevant who leads on this issue, whether the Minister for Social Policy, John Dalli, the Minister for Finance, the Economy and Investment, Tonio Fenech, or indeed, if these are too busy, the Principal Permanent Secretary, Godwin Grima.
The important thing is that the social partners and Government appear to be doing something, as in the absence of a continuous discussion on the social pact at MCESD level, MCESD might as well close shop.
Why would the GRTU agree with reviving the social pact? We are members of the European Union. The EU model works essentially on the EU Commission working in close collaboration with the social partners, most important decisions being taken after due consultation.
In Malta, this process was started successfully when we first of all discussed all the issues effecting competitiveness and then the document resulting from these discussions served as a basis for all discussions that should have led for the social pact.
Today Malta would have been in a better shape to face the current economic situation if the social pact existed. Those who drove the social pact into a wall caused many workers to pay a high price.
Today on the agenda we have many other serious issues such as safeguarding jobs, better monitoring of the banks and access to finance, ongoing labour market issues to meet the new investment’s demand, the welfare gap, sustainable health and pension services, the infrastructure, and many other issues that will help us ensure that during the next five years Malta really makes the great leap forward, economically and socially within the EU framework.
The social pact must prove that we are all committed for an improved economy for the greater service of the individual and the family within an all-inclusive strategy.
Under which conditions would the GRTU be ready to accept to revive the social pact? In the preliminaries for a social pact the social partners must first agree on the most relevant issues and the general framework: tablets of stone.
We cannot have a re-take of the last discussions where all of us devoted so many days of discussion and then leave it up to one of the partners to veto the whole process.
Should the MCESD be used as the forum where the social pact discussions should be held or should it be under a different tripartite negotiating model structure to the MCESD? MCESD is the highest level of consultation at law. Some people like to invest committees and structures for every occasion. Furthermore, MCESD is Prime-Minister-led.
The worst thing that can happen is that we go back to the years when MCESD becomes a ball in the game that Ministers like to play.
When is the MCESD expected to discuss the issue? MCESD has, since the discussions on the social pact ended abruptly, following the veto of GWU, become merely a Lecture Room where people come to deliver a presentation that most of the time you can download prior and read. There are very little healthy discussions and practically no conclusions at all.
What keeps a body like MCESD going is an ongoing process that leads to documents like a social pact.
I honestly believe, as the most experienced member of MCESD to date, that there is not enough commitment by all partners, including the Government, to give MCESD the credibility it deserves. It’s a question of commitment. It’s a question of trust.
In view of the fact that last time around, the discussions on the social pact had failed, what, in your view, should be done differently by the government and the social partners to ensure success this time? Agree on tablets of stone and conditions to which all social partners are committed. This commitment must be made before the process of discussions commences.
Vince Farrugia is the Director-General of the General Retailers’ and Traders’ Union (GRTU)
