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Engagement of Migrant Workers Proposal – Positive Initiative Subject to Fine-Tuning
31 May 2016
GRTU Malta Chamber of SMEs has long called for better regulation of casual work particularly within the context of migrant workers occupying a particular and useful role within our labour market but which does not benefit correctly both to lawful economic operators as well as other law-abiding employee counterparts.
It is therefore by no uncertain terms that GRTU supports such initiative in principle and welcomes the concept of regularisation in favour of better use of efficient resources, combating the black economy and exploitation of workers, and eradicating unfair competition practices in this sense. The approach adopted in terms of creating a Job Brokerage Office which shall act as a liaison between the human resource and the employer demands, is also a positive approach of moving closer to fair practice.
GRTU has submitted its feedback in relation to the Job Brokerage Office proposal in order to put forward its suggestions to fine-tune the proposal in a way which eradicates specific details which are cause of great concern in a proposal which would otherwise be a very positive development in regulation such work.
1. Although the voucher system is a commendable way to address the relationship between the employer and the potential human resource, the breakdown of pay structure will not achieve the desired encouragement of regularisation as it may lack an element of fairness.
Despite the proposal claiming to be based on the minimum wage it sways from this principle when one goes into the details of how the pay structure is broken down. The actual price paid by the employer is Eur6.00 per hour (or Eur5.50 per hour at best if purchased under the highest bundle of hours). The migrant worker receives Eur3.80 per hour. The prices proposed vis-à-vis the actual pay received by the migrant worker engaged put forward two concerns:
- A lack of incentive in terms of law-abiding employers in relation to employers who still opt to operate within the black economy whereby if a migrant is paid at actual minimum wage in the black economy, such worker is receiving more than the Job Brokerage Office proposal and such employer is paying less.
- There is an element of lack of fairness towards the notion of equal respect and equal pay between migrant workers and their counterpart workers which undermines the concept of fair and equal integration into the labour market, since such migrant workers shall be pocketing less than minimum wage in practice.
The 10% of the NI contributions may make sense as this is a contribution equivalent to regular NI. However the calculated additional cost above the minimum wage which is claimed to reflect 24 days leave, 10 days sick leave and statutory bonus should not be included in this sense. This is clearly none other than an operational tax to cover costs for the government authority managing the scheme. This additional payment by employers is not truly being passed on to the migrant worker as the worker is in effect receiving far less than this.
2. The proposal shows that it is already ready to offer a degree of flexibility, with suggestions such as adhoc arrangements in specific industries with seasonal situations for instance. It is necessary that this principle is followed and it is flexible to serve its purposes rather than becoming an overly bureaucratic exercise.
3. There needs to be a clear information campaign and roll-out of this new system. The point here is not to police and fine, but rather to educate businesses that this is a fair way of operation. There should therefore be a clear transition period from when the system starts and until all businesses understand how and when to use it before imposing enforcement which to date is very limited and therefore fines.
4. In the case of enforcement, the proposal identifies an increase in enforcement by stating that there shall be 16 rather than 8 enforcement officers. The business community would have its mind more at rest with knowing the nature and strategy of enforcement rather than the number of officers. For instance, it is imperative to have a fair and transparent system which chooses spot-checks at random rather than repeat spot-checks on the same businesses. There should be a method to report potential abuse.
5. The imposition of penalties is also a cause of concern. A level playing field is necessary through enforcement and implementation of enforcement through fines would be understandable. Nevertheless the proposed penalties which fall under
a parallel reform, namely the JobsPlus Act, are first and foremost unnecessarily costly. Some fine-tuning of the costs already imposed are definitely a strong deterrent to anyone not using the new proposed system of Job Brokerage since it is beneficial in nature. There is no sense other than creating an overly burdensome fine to businesses as a revenue for public coffers to have such fines reaching the sums of Eur5,000.
Moreover it is adamantly uncalled for to also include the possibility of trade-license revocation. One has to consider the implications on other company directors, the families of the business owners, the general implications of such revocation and other business commitments entered into, and last but not least the effect on the lawful employees who are employed with the business in question, as well as their families.
