Employment Law

The right of all citizens to work is a fundamental right enshrined in the Maltese Constitution which ensures that workers’ rights are protected. In guaranteeing that this right is enforced throughout, Malta has rigorously regulated the Employment Law sector. In fact, the main legislative sources are:

• The Employment and Industrial Relations Act (‘EIRA’);
• The Employment Commission Act (‘ECA‘); and
• The Employment and Training Services Act (‘ETSA‘)

In addition to these acts of law, numerous regulations and subsidiary legislation has been enacted to regulate specific areas of employment law such overtime and working hours, wages, health & safety at the place of work, and the workplace in general in the private and public sectors. Notably, there are also collective agreements which are essentially enterprise-specific agreements that regulate conditions of employment. These too are, to an extent, a source of law as enacted between the parties.

Notwithstanding that the doctrine of binding precedent is not applicable under Maltese law, the decisions of the Courts of Law and the Industrial Tribunal are deemed to be yet another source of soft law. These are especially useful when the law is silent on a specific matter.

The regulatory framework regulating employment law in Malta exists to ensure that a suitable working environment is in place for both employers and employees.

Whether you are an employer or an employee, as a leading employment law firm, Gonzi & Associates, Advocats, can assist you with a vast array of queries relating to employment law issues. Our team of expert employment lawyers is well suited to assist with the following, among others:

An Employment Contract is defined as “an agreement, whether verbal or in writing, where a person binds him/herself to do work for an employer in return of wages”. Therefore, even a verbal agreement is valid and enforceable at law. However, if the period of employment exceeds 1 month and working hours exceed 8 hours per week, the Employer is bound to give to the employee either a) a written contract of employment or b) a written statement of minimum conditions.

At the most basic level, an employment agreement should deal with the following minimum conditions:

1. Commencement Date
2. Job Description and Duties
3. Probation Period
4. Wages
5. Hours of Work
6. Duration
7. Leave Entitlements
8. Termination and Notice Period

We recommend that other clauses are inserted in order to better protect the employee and employer such as confidentiality clauses, clauses dealing with intellectual property right, non-solicitation and non-compete clauses.

The duration of the contract is important as an employment agreement may either be for a definite or indefinite period of time. The main difference between the two is that an indefinite term contract has no expiration date while in a definite contract, the contract comes to an end by reaching a specific date or by completing a specific task, or through the occurrence of a specific event.

Notably, determining between definite and indefinite term contracts affects the mode of termination. In fact, the definite and indefinite term contracts can be terminated in different ways for example in the case of definite contracts, terminating the contract without a good and sufficient cause may lead to the imposition of penalties on the defaulting party.

Every employment shall be subject to a probation period. This is an established period at commencement of employment during which the employee is assessed by the employer for his suitability for the job and the employee decides whether he/she wants to continue his/her employment in that particular job.

During probation either party may terminate the employment without assigning any reason, provided that one-week notice is given if the employment exceeded one month. According to law, the probation period is for a maximum period of 6 months whether this is definite or indefinite contract. However, in the event that the employee holds a technical, executive, administrative or managerial post and the wages are at least double the minimum wage, the period of probation shall be of 1 year unless specified otherwise.

The probationary period cannot be extended beyond the maximum period allowed by law. However, the parties may agree on a shorter period.

Both a definite and indefinite term contract may be terminated by mutual agreement between the parties. However, in the case of a definite term contract it can only be terminated by expiration of the time stipulated or if there is a good and sufficient cause in accordance to law. If the employer or the employee have other reasons for terminating which are not deemed to fall within the remit of a good and sufficient cause then the party terminating may incur penalties.

Furthermore, in the case of an indefinite term contract this may be terminated either by the employee without assigning any reason provided that prior notice is given or by the Employer in the case of redundancy or if there is a good and sufficient cause.

Termination by means of notice is only applicable in the case of indefinite term contracts. This is calculated on the employee’s continuous length of service. For instance, if an employee has been in employment for a period exceeding one month but for not more than six months then he must give a one-week notice. These notice periods are established in the law but it is possible for the employee and the employer to agree on longer periods in the case of technical, administrative, executive or managerial posts.

The notice period begins to run from the next working day following the day on which the notice is given. Notably, if an employee fails to give notice, he shall be liable to pay a sum equal to half the wages that would be payable in respect of the notice period. Additionally, if the employer fails to give notice, he shall be liable to pay a sum equal to the full wage that would be payable in respect of the period of notice.

The Industrial Tribunal is established to deal with trade disputes and issues of unfair dismissals, discriminatory treatment, victimization and harassment. The case must be instituted within 4 months from the day of the alleged breach.