Workers at an STMicroelectronics' assembly facility on the Mediterranean island of Malta have rejected plans for an "austerity package" that was a condition of further company investment there, according to a Times of Malta report.

The General Workers Union has called for further negotiations before a second vote is taken while the Prime Minister of Malta, Lawrence Gonzi, on Sunday (July 11) asked the workers not to "sabotage" an investment agreement he had reached with the company, the report said.

The austerity package is reported to include a number of cost-cutting measures including: a freeze on pay rises until December 2012, that any new employees should start on the minimum wage, and changes to overtime premiums and sick leave benefits..

In late June PM Gonzi visited the facility at Hal Kirkop on Malta and saw assembly equipment for microelectromechanical systems (MEMS), according to a Maltamedia report. This was the new line of business that it had been agreed would keep STMicroelectronics on the island, the report added.

The monetary value of ST's proposed investment in Malta was not disclosed in the reports. The expectation was that STMicroelectronics would refresh its product lines and maintain the current level of employment at around 1,400 employees. ST is a significant employer on Malta but has shed about 1,000 employees over the last two years the Times of Malta report said.