GRTU in disagreement with new maternity leave mechanism

Following the presentation delivered to the MCESD, GRTU submitted its official position paper on the Maternity Leave Trust Fund where it clearly stated that whilst GRTU is in favour of the rationale behind the measure it is against a system where employers are made to pay twice for their employees’ maternity leave, pending reimbursement.

The new mechanism requires employers to pay an increase of 0.3% in

 contributions on all their employees and at the same time also pay their employees their wage while on maternity leave. The latter will eventually be reimbursed by the Government through the contributions paid by the same employers.

GRTU is in favour of measures that increase the female participation rate in the economy and it believes this is an objective that should be supported collectively. It is however also important to acknowledge that maternity leave has a big impact on businesses, especially small businesses.

Maternity leave leads many small businesses to go through increased pressure having to make up for less human resources while still carrying the same wage cost. Some businesses go through more hardship because they need to find a replacement with the right skills and spend even more on wage costs to fill in this gap. Notwithstanding this however the process is embedded in businesses’ working practices and businesses cope with the situation the best way they can.

The new system will definitely aggravate the situation and to GRTU it is unacceptable to ask more from businesses. Businesses will be worse off both in terms of finances and administrative burden. Having to apply for a reimbursement from the Government is of significant concern to the GRTU because this translates to additional paper work and lengthy payment periods.

GRTU’s position paper is based on the input and feedback received from its members and Executive Council and we believe that several valid points were made. Unfortunately, even though GRTU submitted its feedback through the MCESD official channels, we are not in a position to know whether our position paper was given any kind of consideration.

This measure has serious repercussions on businesses, which repercussions begged to be measured in an impact assessment and discussed in a consultation exercise that went beyond simply delivering a presentation.