Trade union clashes with microelectronics company over suspended pay increases

Abstract

STMicroelectronics, Malta’s largest private employer and leading exporter, announced its plans to downsize, following losses amounting to €35.3 million a year. The company claims that labour costs, declining competitiveness and the weakened US dollar have forced it to reconsider pay rises and bonuses, as provided for in the relevant collective agreement. As a result, a dispute arose with the General Workers’ Union, who urged the company to honour the collective agreement. STMicroelectronics (http://www.st.com/) is a market leader in the development and delivery of semiconductor solutions across a wide variety of microelectronics applications. For many years, the company has warned that rising labour costs were diminishing the viability of its plant in Malta. Over 2,000 workers are employed at the plant, making it the country’s largest private employer. Although the Maltese plant has been singled out for closure in the past, it has nevertheless managed to survive, while its sister plants in Morocco and the United States (US) have been forced to close. The company’s competitiveness problems have been further compounded by the weakening of the US dollar in recent times. Against this background, STMicroelectronics suspended proposed wage increases, as stipulated in the collective agreement covering the period 2006–2010, on the grounds that these would increase labour costs further. Moreover, newspapers reported that the company was planning to carry out a restructuring exercise which would lead to a reduction of its workforce.