In recent years, Malta has witnessed a concerning trend that jeopardizes the very essence of collective bargaining and poses a direct challenge to the fundamental role of trade unions. The 2024 Budget and the sporadic measures taken by the government to increase wages appear, at first glance, to be steps in the right directions such as the additional COLA mechanism. However, upon closer inspection, it becomes evident that these actions are speciously undermining the core principles of collective bargaining, leaving trade unions in a precarious position.

At the heart of this issue lies the government’s approach to wage increases, which has a direct impact on the relativity of salary scales. Trade unions, the backbone of the labour force, have a vital mission to negotiate wages while ensuring the fairness and balance of these scales. The recent measures, although seemingly well-intentioned, threaten the very foundation of this delicate balance, pushing the unions into a corner and limiting their ability to advocate for their members effectively.

The problem in government’s approach is that it is trying to fix a broken system with another fix, with the end result that the root of the problem – low and compressed wages – is not being addressed. Moreover, certain decisions like government’s refusal to implement the relativity mechanism proposed by the unions for some 50,000 workers in the public service and public sector will exacerbate the situation. If this decision is not reversed the collective agreement increase negotiated laboriously by the unions will be eaten up by COLA and those in the lowest scale will get the same exact increase as those 9 scales higher. Such system does not do justice with the higher scales, whose salary should reflect the greater responsibilities pegged with their job.

Such approach also contradicts the spirit of social dialogue, a principle that Malta, as a member of the European Union, should uphold. The European Union’s adequate minimum wage directive emphasizes the importance of increasing collective bargaining coverage. However, Malta’s current trajectory, marked by weaker unions and diminished bargaining power, is alarming. We must recognize that weaker unions do not bode well for safeguarding workers’ rights and ensuring fair employment conditions.

The solution to these pressing issues lies in addressing Malta’ compressed and low wages comprehensively. The small difference between the lower and upper scales exacerbates income inequality and hampers the collective bargaining process. Instead of relying on sporadic and one-off measures, the government should focus on sustainable strategies to boost wages. This could include investing in education and skills development to enhance the workforce’s value, encouraging businesses to adopt fair wage policies, and implementing progressive taxation systems that ensure a more equitable distribution of wealth.

Furthermore, it is essential for the government to engage in a genuine dialogue with trade unions, respecting their role and expertise in shaping policies related to wages and working conditions. By fostering collaboration and mutual respect, both parties can work together to create a fairer and more just labour market that benefits workers, employers, and the overall economy.