A financial evaluation of the extent of compensated absences within the local service and industrial sectors

Abstract

The term "compensated absences" refers to those employee's absences from the workplace which entitle the employee to pay. Compensated absences include, amongst others, public holidays, vacation leave, maternity leave and sick leave. The threshold separating absences which are compensated for, from those which are not, is delineated by the labour contract which employer and employee enter into. Nevertheless, legal and contractual obligations set in place by the authorities of a country, ensure that conditions thus contracted are never below a recognised minimum level. Developments which our country faced and is expected to be confronted with, (such as Malta's eventual accession into the EU), and other contemporary issues (including employers' recent recommendations to Government for a decrease in employees' leave entitlements), propound the need for a financial evaluation of compensated absences in Maltese companies. These factors induced me to look upon this subject as an area worthy of an assessment. The main objective of the study was that of exploring the framework within which compensated absences are established in Malta and of investigating differences which might exist across industries and organisations, if any. A survey, involving companies in different lines of business, was undertaken for this purpose. The research, apart from serving as an evaluation of the current scenario, is intended to serve as a basis against which comparisons with other countries are made and on which recommendations for improvement are made.