Alternative Employement

The Malta Independent - Friday Wisdom

Whenever a government owned enterprise, organisation, authority (or whatever name is assigned to it) hits the rocks and needs to shed labour to stem the financial haemorrhage, the unions expect, as of a right, that the government intervenes to offer alternative employment.

Scant attention is given to the need for government to run its ship more efficiently by reducing, at least through natural wastage, its own employees within central government so as to contain the irresistible creep of recurrent expenditure which has to be financed by taxes and/or borrowing.

Each and every employee who passes through the trauma of losing employment would wish for someone to offer him or her alternative employment. But whereas such expectations are almost as of right in the public sector, redundancies in the private sector offer no such protection and, more often than not, employees will have to find their own way around their hardship till they can find alternative employment or go into early retirement.

What I find hard to understand is why the unions use so much energy to defend public sector employees who suffer redundancies, as is currently the case with the employees of Interprint that has ceased operations, and do nothing to ease their ineffectiveness regarding private sector employees who suffer a similar fate.

Social justice demands that unions should be at the forefront in demanding a re-balancing of the rights of private sector employees with those of their public sector brethren.

This is also necessary as in most cases private sector employees are much more productive and efficient than public sector employees – so we have an absurd and unsustainable situation where the most efficient are the least protected and the less efficient are the most rewarded.

It is certainly not too early for a social deal to be worked out whereby the unions agree to allow more flexibility, accountability and discipline in public sector employment. This has to include the principle of regulated redundancies, in order to ensure that the public at large gets fair value for its taxes rather than seeing its taxes and debt obligations being abused to create expensive, unproductive, artificial, vote catching employment.

In compensation, government has to regulate the labour market to include more protection for private sector employees who suffer redundancy. This ought to include an obligation for the employer to make provision for termination benefits in the form of payment for re-training, in order to facilitate the transition of the affected employee into new, productive employment by enhancing skills and employability.

If government has any money to spend to cushion the pain of unemployment then such money should mostly be spent on retraining and certainly not on offering artificial alternative employment.

I repeat my often made suggestion for the creation of a retraining scheme ( a local version of Cassa Integrazione) which can absorb within its fold all the unemployed and all employees declared redundant, irrespective of whether in the public or private sector. Such a scheme is to be funded by former employers who are to be obliged to pay for the retraining of employees they discharge, while the State will pay unemployment benefits during the retraining period.

The State will then offer new employers incentives to hire employees from the retraining scheme by subsidising their wages, possibly continuing to pay the unemployment benefit even during the first years of the new employment.

I do not expect public sector employees to be overjoyed with such a proposal. Human nature being what it is, individuals are quite liberal in offering pity for the suffering of others but not quite willing to show solidarity by shedding some of their own privileges in order to ease the pain of those who suffer the social trauma of unemployment.

Yet leadership demands that something is done to address this apartheid in our labour market. In the process, we could have the added bonus of addressing the spending crawl which is the main contributor to our public budget deficit, we could generate growth as more people are put to work productively and we could bring about an overdue element of social justice in our industrial relations.