Playmobil Malta’s cheap payments to subcontractors leads to precarious work
● Workers getting half below minimum wage for assembling toys ● CEO Matthias Frauser refusing to answer questions
Playmobil Malta’s cheap payments to subcontractors has led to individuals getting less than half the minimum wage, with some earning as little €1.90 per hour, documents provided to The Malta Independent show. Well-informed and trusted sources, who came forward as a matter of conscience, informed the newsroom that Playmobil Malta currently employs 22 subcontractors on the island.
Documents indicate that each subcontractor is hired to assemble products for the company at a rate of €3.99 per hour. Sources claim that the subcontractor, in order to make a profit and meet the ambitious targets set out by the company, then employs Maltese people who are paid between €1.90 and €2.00 per hour and work from home, a clear violation of employment laws by subjecting individuals to precarious conditions of work.
The current minimum wage in Malta is €4.25 per hour, and in April 2017, social partners agreed that the minimum wage would rise to €8 per hour by 2019.
An investigation by this newsroom found that the company requires the subcontractors to adhere to strict production regulations. Documents indicate that for one product the subcontractor will be paid €11.40 for every 1,000 pieces that is produced within three hours. This translates to roughly 350 units at €3.99 per hour, meaning that the workers assemble one piece every ten seconds.
In other instances subcontractors are required to produce 1,000 pieces within for €16 at a rate of 250 per hour. This means that the individual will produce one every fifteen seconds or 1,000 within four hours. It is humanly impossible to produce more units per hour to reach the minimum wage rate.
The documents also show that subcontractors are also paid €30 to produce 1,000 at a rate of 130 per hour, meaning that the worker will assemble one particular piece every thirty seconds for a little less than eight hours.
Sources have claimed that in some cases it requires a whole family to meet the targets.
The newsroom was also informed that the payment to the subcontractor, and in turn the worker, is penalised if the targets set out by Playmobil Malta are not met.
The sources also informed the newsroom that Playmobil Malta issues invoices to the subcontractors according to the total units produced. This, the sources claim, is a method to disguise the true cost of the wage per hour should the authorities challenge this practice, something which did not happen as yet.
Alternattiva Demoktratika Chairperson Arnold Cassola had previously touched on the issue during the Leaders Debate at the University of Malta, when he made reference to a large manufacturing company based in Malta that was paying Maltese workers beneath the minimum wage while criticising the major political parties for not taking action.
This newsroom was informed that Playmobil Malta has been using subcontractors for eight years. It was also reported that the rates offered to the subcontractors were higher when former CEO Helga Ellul was running the company. Mrs Ellul, who resigned in 2013, ran as a candidate for the MEP elections on the Nationalist Party ticket in 2014. Mrs Ellul was contacted for a comment but has not replied.
Playmobil Malta Ltd is Germanowned and has been engaged in the production of plastic toys in Malta since 1971. The company recorded €611 million worldwide sales in 2016.
The Maltese company’s current CEO, Matthias Frauser has refused to answer questions sent by The Malta Independent, with company’s receptionist informing the newsroom that, “Playmobil Malta does not respond to the media,” despite previous assurances. Contacted by the newsroom, Playmobil’s corporate offices in Germany did not confirm or deny the reports, but refrained from commenting further.