114th International Labour Conference
Address by Mr. Ivan Refalo
Employers’ Delegate – Malta
Wednesday 10th June 2026
The report ‘Employment and Decent Work for Peace and Resilience’, which has been presented for this year’s ILO conference, expounds on the shocking state of affairs created by rising geo-political tensions.
The report states that: ‘Conflicts are at their highest level since the World War 2, affecting some 2 billion people, with over 122 million persons displaced from their homes in 2025’.
The world of work cannot be isolated from this reality, and the global ramifications of war, present challenges to social partners in their endeavours to increase prosperity through the creation of decent work.
Within this bleak backdrop, the world of work is being shaken and transformed through the development of artificial intelligence technology.
This transition is generating a complex process of job destruction and also of job creation.
The Director General’s report reveals that as much as 834m jobs will be affected through AI, with 135m of these in Europe and Central Asia. The ILO estimates that 186m may remain jobless in 2026 due to the AI transition.
A recent report by the OECD – ‘AI adoption by small and medium sized enterprises’ – finds that SME AI adoption remains relatively low compared to other digital technologies and to larger firms, and that there must be differentiated support strategies to enable the diffusion of AI among SMEs.
All this has serious implications for social dialogue.
Social partners have to join forces to design policies that harness the potential of AI. In particular, human resources strategies must be proactive and match the requirements of this economic scenario to safeguard jobs through re-skilling and preparation for new jobs that will be in demand.
The worst outcome would be a situation of structural unemployment, where vacancies and skills gaps exist alongside an increase in unemployment.
Social partners also have to work to ensure that AI does not threaten decent work. Employers have always contended that while a flexible labour market, with new forms of employment is necessary in today’s economic and social environment, it should not come at the cost of job security and a deterioration of working conditions.
Malta has a small but highly diversified economy, with more than 95% of enterprises being SMEs. At 4% of GDP, Malta has one of the highest growth rates in the EU, driven by a strong entrepreneurial spirit in the private sector. This economic resilience has to be retained through targeted support and policies that enable transition and that enhance our enterprises’ productivity and competitiveness.
The growth of the past years has been dependent on labour migration, but this model is fast reaching its limits as it is not supported by the necessary infrastructure to sustain it. Volume based tourism is also reaching its capacity.
Maltese employers have been actively pushing for an economic transformation that steers the economy towards economic sectors that rely less on sheer numbers and more on higher value added activities.
This strategy has important implications on the labour market, as conditions of employment can only be improved with enhanced productivity. As things stand, many employees see the value of increased earnings eroded through higher property and rental prices.
Employers are also insisting that, in a country with a dangerously low birth rate and a rapidly ageing labour force, it is imperative to retain the supply of working hours and focus any measures that reduce working hours on families with young children.
Elderly employees need to be incentivised to extend their working lives rather than to retire earlier. We advocate holistic family-support measures and flexible work arrangements that maximize the existing talent pool—especially women and older workers—rather than relying solely on blanket measures like a shorter work week, before economic transformation occurs.
The scarcity of the human resource – particularly in the private sector – is one of the limiting factors of economic growth. Government should not be seen as a dominant competitor in the labour market, it should be increasing its efficiency to release labour to the private sector. It should concentrate on education reform to bridge persistent skills mismatches—particularly in STEM, green technology, and digital fields. Preparing the workforce for Artificial Intelligence is a core pillar of Malta Employers’ strategy to enhance competitiveness.
Good governance is one of the pillars of economic growth, through fostering institutional trust, fiscal responsibility and transparent public procurement.
Maltese employers remain deeply committed to the ILO’s principle of social dialogue. True sustainability is achieved when employers, unions, and the government collaborate on long-term strategy rather than short-term political populism.
The items of the agenda of this year’s conference, touching on social dialogue and tripartism, the platform economy and gender equality are very relevant issues that shed light on the relevance of ILO in today’s world.