Issue link: https://maltatoday.uberflip.com/i/1476201
3 maltatoday | SUNDAY • 14 AUGUST 2022 MATTHEW VELLA THE Chamber of Commerce has blamed Air Malta's failure on inflated take-home salaries paid to its workers, in a state- ment on the multi-million sev- erance package to downsize the national airline. Around 600 workers could be paid redundancy packages af- ter the finance ministry failed to transfer airline workers into the public sector and the public service, owing to the inability of matching salaries. "The starting negotiating po- sition of guaranteeing their in- flated take-home pay, which was a contributing factor to Air Malta's failure, makes it virtu- ally impossible for them to be employed anywhere where their pay can be justified. The Malta Chamber is cognisant that in these circumstances, severance payments may very well work out cheaper for the country than burdening the public sector with hundreds of superfluous over- paid reluctant workers indefi- nitely." But the Chamber said the ba- sis on which the amounts be- ing offered had been arrived at should be clarified. "The Malta Chamber believes that these amounts appear to be absurdly high and illustrative of how the bargaining power of overly pro- tected groups results in unfair outcomes for the country as a whole." The deadline for Air Malta's employee transfer scheme was extended from mid-August to 31 December. Originally in Jan- uary, government announced it would create a voluntary em- ployee transfer scheme in a bid to cut Air Malta's workforce by half and save €15 million per year in wages as part of a restructur- ing exercise. The scheme would see Air Malta workers being employed by the government in grades commensurate with their current income. But the 12 August deadline to complete the transfer is being pushed forward because airline bosses fear the exodus would hamper day-to-day operations The company received 571 ap- plications from the 824 eligible employees when the scheme closed on 11 February. This was more than the government was expecting. Reports of the severance pack- ages for Air Malta employees negotiated by unions with gov- ernment have provoked anger among taxpayers and private sector operators who uphold performance-based standards for compensation. "The salary expectation of hundreds of Air Malta employ- ees are not commensurate with their competence and willing- ness to be productive. They therefore could not be absorbed by the public sector and would not fit in the private sector ei- ther," the Chamber said. "Following years of being paid hefty salaries for questionable output at the national airline that bled millions every year they are now being given a six-figure golden handshake costing the country around €50 million." The Chamber said the Air Malta saga was the culmination of decades of unsustainable em- ployment practices and vitiated political interference in the run- ning of the national airline. "Other government-owned en- tities are susceptible to similar extravagances, and are unlikely to ever be brought to the reck- oning by the European Commis- sion, as Air Malta has been. The Malta Chamber is particularly concerned that we will continue paying millions in hefty salaries and superfluous spending at other entities unless a credible framework for the monitoring of the performance of such entities that is ring-fenced from political interference is put in place." Earlier this week, the Mal- ta Employers Association said that the severance package was "the most obscene agreement in Malta's industrial relations history", with workers being of- fered roughly €16,000 for every year of service. "There are thou- sands of better ways to use such funds than wasting them on golden handshakes. This agree- ment is morally flawed, and only intended to appease an advan- taged class of workers, many of whom should never have been employed at Air Malta in the first place." Last January, the MEA had suggested transferring Air Malta employees to the private sector instead of relocating them to a public entity. The association argued that the public sector is already overstaffed, and said that such an exercise would add a further €15 million to recur- rent expenditure. "It is unthinkable that there have been no efforts to relocate these employees to the private sector, which currently faces a shortage of labour in many in- dustries, leading many compa- nies to engage foreign employ- ees," the association said. The MEA described the air- line's human resource man- agement as a tragedy of errors, having been over-manned for decades with some employees serving as "nothing else than po- litical cronies." "What government is doing is squandering taxpayers' money to resolve a mess of its own mak- ing. Offering jobs in the public sector is bad enough, but the details of this severance package are infinitely worse." "Companies and employees cannot take government's ap- peal for tax compliance seriously when it is distributing millions of their taxes to a privileged few, with such handouts amounting to more than an average worker saves in his or her lifetime." 'Amounts appear to be absurdly high and illustrative of how the bargaining power of overly protected groups results in unfair outcomes for the country as a whole' Chamber on Air Malta downsizing saga: severance cheaper for country "The salary expectation of hundreds of Air Malta employees are not commensurate with their competence and willingness to be productive. They therefore could not be absorbed by the public sector and would not fit in the private sector either" The Chamber of Commerce has blamed Air Malta's failure on inflated take-home salaries paid to its workers,. Earlier this week, the Malta Employers Association said that the severance package was "the most obscene agreement in Malta's industrial relations history"