91% of business have not laid off any employees to date, MEA survey finds

Miguela Xuereb

Tista' taqra bil- Malti.

91% of business have not laid off any employees to date, a survey by the Malta Employers’ Association has found.

In a video press conference, the MEA published the survey results which was carried out among 346 businesses, all of which are members of the same association. The survey included 15 open and closed ended questions and was held between 20-24 April. The respondents came from a variety of sectors.

Director General Joseph Farrugia explained that the aim of the survey was to establish how the operations of their members were affected by the pandemic, to evaluate the financial measures announced by the government according to their effectiveness as felt by the businesses and to identify the needs of their members in order to be able to lobby and improve the conditions.

Since the outbreak of coronavirus in Malta on 7 March, 458 coronavirus cases have been registered so far. The country underwent partial lockdown in a bid to curb the spread of the virus within the community. Businesses which offer non-essential services have been closed down while businesses operating in the tourism and hospitality sector have been the hardest hit.

The government announced various financial measures which were aimed at safeguarding jobs following the coronavirus outbreak in Malta. The global pandemic has not only sparked a public health crisis but resulted in a social and economic crisis.

During the presentation, Farrugia explained that the respondents represented a wide demographic and had different numbers of employees. 52% of the respondents are receiving the government announced wage supplement. Out of this percentage – 65% fall under Annex A while 34% fall under Annex B. 48% of the respondents did not qualify under either of the annexes and therefore are not receiving any wage supplement.

40% of the respondents said that the company was still operating on full hours. Farrugia pointed out that this does not mean that business was not reduced for the respondents. 36% of the respondents said that all of their employees were placed on reduced hours.

Farrugia explained that many businesses were working towards retaining employees and different measures have been taken to mitigate the adverse impact of the crisis. 20% of the companies have had their employees use their entitlement leave 2020 while 38% have had employees take their pro-rata leave for 2020.

Asked about employees on unpaid leave due to insufficient business, 72% of the respondents said that none of their employees were on unpaid leave. 6% said that all their employees have been put on unpaid leave while 22% said that some of their employees were on unpaid leave.

Mass redundancies

91% of the respondents said that they have not resorted to mass layoffs to date. Farrugia remarked that this reflected the information published earlier by the National Statistics Office. He remarked that there was an effort to avoid mass redundancies.

Farrugia explained that from the 9% which have laid off employees, 14 companies fell under Annex A and eight companies fell under Annex B, according to the Malta Enterprise classification scheme for benefits. Ten companies fell under neither Annex A or B.

Employers were also asked about their predictions post May 2020. 31.2% predict that there will be an increase in redundancies if the crisis persists beyond the end of the month. Only 24% said that they would retain their employees if the crisis persist while 45% were undecided about the fate of their employees.

Effectiveness of financial schemes

38% of the respondents said that the government financial measures were extremely ineffective. The respondents however include both those who qualify for the financial assistance under Annex A and B and those who do not. 18% have replied that the financial assistance was effective. The result includes 5% who replied that the financial assistance was “extremely effective” and the 13% who said that they were effective. 30% of the respondents said that the financial measures were neither effective nor ineffective.

Looking closer at the data, it was revealed that those companies qualifying under Annex A showed a higher level of satisfaction when compared to the companies which qualified under Annex B.

Going digital

The public health crisis and the various measures implemented to stop local transmission of the virus has transformed the way of doing things overnight. Many companies found themselves either teleworking or focusing more on delivering the service online. Asking its members about the digital measures implemented by the companies, 72.5% of the respondents said that all or some of their employees were teleworking. 58.3% said that they have increased their use of video-conferencing while 18.4% said that they have moved towards e-commerce.

Farrugia remarked that post-coronavirus, some of these practices would rub off and companies will continue to implement working from home.

The MEA said that the government should consider implementing the teleworking subsidies as a permanent measure to incentivise companies.

Recommendations

In its recommendations, the MEA has urged the government to include more companies under both Annex A and B including companies that are co-dependent on companies in sectors which have been forced to close. Farrugia explained that once the pressure eases off, the government could then focus on assisting those companies which would require more assistance.

Another recommendation put forward includes a temporary revision in VAT rates to kick-start the economy. The MEA also highlighted that more flexibility was required when employing third country nationals. Farrugia said that employers were finding it difficult to renew work permits for third country nationals.

Referring to the crash in oil price, the MEA reiterated its call for cheaper utility bills. The association also recommended schemes for commercial rent and urged for the swift implementation of the newly announced scheme concerning interest rate subsidies.

Farrugia said that the schemes should be continuously revised and adjusted to reflect the fluctuating realities brought about by the coronavirus pandemic.

The full results may be found here.

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