Malta's Government Reaffirms Privatisation Process Of Malta Shipyards

by Ulrika Lomas, for LawAndTax-News.com, Brussels

21 August 2008

Malta's Government has this week reaffirmed its position that the privatisation process of the Malta Shipyards will fully respect the obligations of the European Union transfer of business directive.

Under the directive, member states must safeguard all employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses.

The Government has repeatedly affirmed this statement on a number of occasions, announcing that the bidders who will be awarded the shipyards will have to take over the workforce should the transfer of business take place.

The Government has, however, assured that it has not commissioned a report to identify the number of workers that would have to be laid off prior to privatisation.

In terms of how the Government has arrived at the 700 employees level, the Minister had given a detailed explanation to the press on a number of occasions, and what has been repeatedly stated was:

1. Internal management reports made by the shipyards management, presented even to the Opposition last year and tabled in Parliament, clearly stated that the shipyards were still significantly over-manned and that employment levels needed to be further reduced if there should be any hope that the shipyards would become viable.
2. Also, assessments made by other shipyards that had expressed an interest in somehow participating in the shipyards late last year, had withdrawn their interest particularly because of what they deemed too high employment levels, they had then indicated that in their opinion the shipyards would not be viable with employment levels that were in the levels of more than 450 full-time employees.
3. After reviewing employment levels of other similar shipyards in the region; including Palermo (around 530), Hellenic (Greece) (around 220), and Lisnave (Portugal) (around 350), Government concluded that, although somewhat optimistic with numbers around 700, in the light of the transfer of Business Directive, privatisation prospects would not be jeopardised.

Additionally, the Government has reminded that failure of the privatisation process would not only mean that the workers have no new business to go into, but would exclude the possibility for Government to offer voluntary early retirement and resignation schemes.

The Maltese Government affirmed that the process that has been undertaken is not only intended to respect the social obligations emanating from EU Directive 2001/23/EC relating to the transfer of business, but rather to ensure that the transfer of the remaining workers on the books of Malta Shipyards Limited to the new undertaking/s will be completed successfully.

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