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Hotel owners not in position to set up EU employers’
fund
by Karl Schembri
Malta’s hotel and restaurant owners are not prepared to
set up a guarantee fund in accordance with EU directives to
pay any outstanding claims to their workers in case of bankruptcy
but Tourism Minister Michael Refalo has ruled out the eventuality
of them having to set up such a fund.
A study commissioned by the Malta Hotels and Restaurants Association
on “The Impact of Malta’s Eventual Accession to the
European Union on its Hotels and Restaurants Sector” revealed
that 39 out of 45 employers interviewed found the setting up
of such a fund difficult.
Answering the question: “Can you set up a guarantee fund,
independent of your operating capital, equivalent to three months’
wages of each of your employees?”, 21 respondents said
“I certainly cannot” while 18 said they can, but only
with difficulty.
The Minister for Tourism, however gave his reassurance to employers
that they will not be asked to set up such a fund.
“As expected, I could actually visualise their (employers’)
hands going up in horror when asked whether they would be able
(to set up the fund),” Dr Refalo said during the presentation
of the study last week. “Perhaps it would have been preferable
had one explained the concept and mechanics before posing a
question which drew such a massive negative response. My reading
of the relative EU directive is that it does not impose that
operators in tourism, or anywhere else for that matter, should
each hold such a fund in reserve.”
The study, carried out by sociologist Godfrey Baldacchino and
made public last week, highlighted a strong negative reaction
from the MHRA members’ part with regards to the obligation
to set up a guarantee fund with the equivalent of three months’
wages of each employee on one’s payroll, in order to pay
any outstanding claims to employees affected by the onset of
employer insolvency.
Dr Baldacchino says the issue of the guarantee institution “is
one which is fuelling much unnecessary fear and discomfort in
the industry.” He appealed to government to clarify its
position on the EU Council Directive 80/987 as soon as possible.
“It is both timely and opportune for government to consider
seriously both the funding of such an institution as well as
its management, at least in order to dispel unwarranted speculation,”
Dr Baldacchino said.
Article 5 of the directive specifies that “Member States
shall lay down detailed rules for the organisation, financing
and operation of the guarantee institutions, complying with
the following principles in particular:
a. The assets of the institutions shall be independent of the
employers’ operating capital and be inaccessible to proceedings
for insolvency;
b. Employers shall contribute to financing, unless it is fully
covered by the public authorities;
c. The institutions’ liabilities shall not depend on whether
or not obligations to contribute to financing have been fulfilled.”
“The directive allows each member State to decide on how
best to apply its provisions,” Dr Refalo said. “What
the EU requires is that the fund’s extent should be national,
that its establishment and existence should provide a further
measure of protection and some breathing space to employees
formerly working for enterprises which go under.”
Speaking to The Malta Business Weekly, Dr Refalo described the
directive as a measure of solidarity with workers.
The Malta Employers’ Association has proposed that such
a fund could be administered by employer organisations and trade
unions, “but it is the financing, rather than the management,
of this fund which remains locally dubious to date,” Dr
Baldacchino said.
Dr Refalo said that in any case the number of insolvencies and
bankruptcies that make it to the law courts is extremely low
in Malta.
“Equally low, I am reliably informed, would be employers’
contributions to such a national fund to cover these contingencies,”
he said.
When the question was asked specifically to 10 small hoteliers
and restauranteurs, eight of them responded “I certainly
cannot”, while the other two said they could but only with
difficulty.
The survey confirms another one carried last year by Dr Baldacchino
himself on behalf of the Malta Employers’ Association.
In that survey, 26 out of 56 employers claimed that such an
obligation would present them with serious difficulties, with
both the administration as well as the financing of the fund
being likely to cause employer anxiety. Thirteen of them employed
more than 200 workers.
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