For the troublesome staffing situation within the catering sector to change, Finance and Employment Minister Clyde Caruana boldly said that “we must first agree on this: it cannot be a rat race to the bottom.”
Speaking at a panel discussion organised by the Association of Catering Establishments on the staffing and HR crisis currently being experienced in the sector, in partnership with BusinessNow.mt, Dr Caruana primarily spoke of a “rat race to the bottom” in terms of establishments trying to get away with paying the lowest possible wages, with questionable working conditions.
The conference was centred around a study conducted by E-Cubed Consultants on the trends currently shaping the catering industry and found that attracting locals, especially young persons, to the sector, and the need for further efforts to attract younger generations to the industry, emerged as a top concern.
While the first panel discussion featuring stakeholders focused heavily on why career prospects are perceived so poorly within catering, the second panel featured the Employment Minister, Tourism Minister Clayton Bartolo, Education Ministry representative Paul Debattista, General Workers Union Secretary General Josef Bugeja, and ACE Secretary Matthew Pace, who also owns a local restaurant called Uncle Matt’s Kitchen.
Here, the discussion centred primarily around the issue of low wages specifically.
Armed with numbers to back up his arguments, Minister Caruana first acknowledged that “the situation is critical, we need to do something because things cannot keep going like this”.
To illustrate his point about the situation in catering being “a rat race to the bottom”, he explained that the average pay within the industry in the early 2000s translated into around 92 per cent of the national average wage, by the year 2010, this declined by 10 percentage points, to reach 82 per cent of the national average wage.
By 2019, he shared, pointing out that this was pre-COVID times, the average pay in catering declined a further 10 percentage points, to 72 per cent.
Without the Minister getting into the following point specifically, when considering the rapid increase in rental costs, housing costs in general and consumer goods, it takes little to understand why workers in the catering industry found themselves unable to keep up with Malta’s cost of living.
Minister Caruana went on to say that although discussions around Malta’s labour market take a general tone, the reality is that the market is made up of smaller labour markets for each and every sector, resulting in competition.
“Costs, purchasing power and income across the economy is going up. Perhaps it is skewed somewhat by certain sectors, but most sectors are moving ahead.
“Unless the accommodation and food industry move ahead too, relative to other sectors – and I am not talking about finance and iGaming here, but wholesale, retail and personal services – the staffing situation will continue to be of concern,” he said.
Dr Caruana drew attention to how Malta lost around 10,000 foreign workers during the pandemic, and that around 60-70 per cent were working in the country unregistered.
He said that this is partly why Malta was one of the few countries to register an increase in employment during the pandemic, especially because many unregistered workers regularised themselves to benefit from the COVID wage supplement.
Therefore, Dr Caruana argued that the Government can make things as flexible as possible to facilitate the importation of foreign workers to plug the wide staffing shortages, but ultimately, “we would be going around in circles, because unless the fundamentals change, nothing is going to change. We will still have high turnover in the sector”.
Essentially, he is saying that unless wage prospects within the sector improve, together with conditions, the HR crisis will not improve in a material or sustainable way, even if Government had to award all the flexibility in the world for foreign workers and Third Country Nationals (TCNs).
He was, in essence, responding to a point raised by ACE’s Matthew Pace, who primarily suggested that Identity Malta should reduce the bureaucracy surrounding work permits for TCNs, such as the requirement to prove that a job was advertised locally first, and also decried a situation where a foreign national being interviewed for a catering job in Malta is prevented from coming due to the small number of vaccine brands being accepted by Malta, or the requirement to pay €1,400 to quarantine at a hotel.
He also suggested that an amnesty is created for unregistered workers locally to reintegrate them into the working population.
Ultimately, both Mr Pace and Minister Caruana make valid points, with the former looking at immediate-term solutions and the latter taking a bigger-picture approach.
The GWU’s Josef Bugeja, however, was less forgiving, and vociferously questions how the industry can hope to attract the best talent when subpar working conditions are being offered. One major gripe by workers in the industry is a widespread practice for employers not to pay double of Sundays or Public Holidays, as required by law.
“It is a vicious cycle,” he said, adding:
“We are not thinking about how to attract the best talent and the best workers, but how to import labour. Is this because we gave up on coming up with ideas of how to improve the situation?”
Here, Mr Pace responded, questioning how possible it is to pay double on Sundays, especially for higher paid chefs and management, when considering the number of eateries on the island.
E-Cubed Consultancy’s study found that, according to NSO figures, there are around 2,200 licensed catering establishments in Malta, however, it was pointed out that Malta Tourism Authority figures place this figure at upwards of 4,000.
“That is a catering establishment for every 125 people in Malta,” he proclaimed.
“We need to look at the whole picture, restaurants underpay not for fun, but because they cannot sustain double pay on Sunday,” he added.
Indeed, the concern about the oversaturation of the local catering industry, the sheer volume of establishments, is something that has been pointed out by several restaurateurs who say the situation won’t get better until the industry cools down.
On his part, Tourism Minister Clayton Bartolo said he had just attended a World Tourism Organisation event, the first since COVID-19 plagued the world, where the issue of staffing in hospitality and accommodation emerged across the board.
He focused his intervention on the need to address the skills gap present where a mismatch of skills is preventing underutilised workers from joining sectors with high demand for employment. Minister Bartolo looks towards skills recognition as a means of attracting people to train for a particular skill which would leave them with certification, and would serve to increase the ability for workers to command higher wages.
He said the Government has a five-year plan for the introduction of skills recognition in the sector, and that it is collaborating with the Institute for Tourism Studies.
“Unless we build a good hospitality and HR pool, this industry will not be able to sustain itself, because its all about the people.”
Education Ministry representative Paul Debattista spoke of a national skills council which has, over the last three to four months, been in discussions with the Finance and Employment Ministry to collaborate further for the Council to be more effective.
He acknowledged that greater collaboration between Ministries is warranted, so that the needs of the tourism sector, for example, can be assisted by targeted training spearheaded by the educational sector.
Mr Debattista shared that the Education Ministry is considering formal recognition of informal training i.e. through work experience.
He shared that another idea is to set up short courses to train workers already in the catering industry, which would leave them with Europe-wide recognised certification, allowing them to command higher wages and providing greater job stability.
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