Employee Participation and Consultation

Maltese law contemplates several scenarios in which employees are entitled to receive information, be consulted or even participate in certain decisions relating to their employment or otherwise relating to certain aspects of the employer’s business or operations. The following are a few examples of such situations which an employer should keep in mind when considering its duties towards its employees.

Collective Redundancies

As per the Collective Redundancies (Protection of Employment) Regulations, Subsidiary Legislation 452.80)in all cases of collective redundancies, the employer proposing to declare the redundancies may not terminate the employment of the relevant employees before the employer has first notified in writing the employees’ representatives of the proposed termination of employment contemplated, and has provided the said representatives with an opportunity to consult with the employer.

The consultations between the employer and the employees’ representative must begin within seven working days from the day on which the employees’ representatives have been notified of the intended collective redundancies. Such consultations must cover ways and means of avoiding the collective redundancies or reducing the number of employees affected by such redundancies and for mitigating the consequences thereof.

Within the said period of seven days, the employer must supply the employees’ representatives with a statement in writing giving all relevant information, providing the reasons for the redundancies, the number of employees it intends to make redundant, the number of employees normally employed by it, the criteria proposed for the selection of the employees to be made redundant, details regarding any redundancy payments which are due, and the period over which redundancies are to be effected.

Transfer of Business

In the event of a transfer by an employer to another employer of an undertaking or business that employs more than twenty employees, the transferring employer and the new employer must inform the employees’ representatives of their respective employees affected by the transfer with:

• the date or proposed date of the transfer;
• the reasons for the transfer;
• the legal, economic and social implications of the transfer for the employees; and
• the measures envisaged in relation to the employees.

Such information must be given by means of a written statement, which is to be delivered to the employees’ representatives at least fifteen working days before the transfer is carried out or before the employees are directly affected by the transfer as regards their conditions of work and employment, whichever is the earlier.

In those cases where the transfer includes measures affecting the conditions of employment of the transferred employees, consultations between the transferor, the transferee and the employees’ representatives must begin within seven working days from the day of notification of the transfer, and such consultations must cover the impact of the transfer on the employees’ conditions of employment.

Cross-Border Mergers of Limited Liability Companies

The Employee Involvement (Cross-Border Mergers of Limited Liability Companies) Regulations (Subsidiary Legislation 452.103) establish the arrangements for the involvement of employees in cross-border mergers of limited liability companies.

Representatives of employees are entitled to receive, by the board of directors of the Maltese merging company, and to deliver, within a reasonable time, an opinion on the report of the board of directors of the Maltese merging company drawn up in terms of regulation 8 of the Cross-Border Mergers of Limited Liability Companies Regulations (Subsidiary Legislation 386.12).

Moreover, in a cross-border merger of limited liability companies, employees’ rights to information and consultation shall remain subject to other applicable laws and regulations that secure such entitlements in favour of employees.

The Employee Involvement (Cross-Border Mergers of Limited Liability Companies) Regulations also regulate employee participation in the company resulting from the cross-border merger, that is, the influence of the body representative of the employees or the employees’ representatives, or both, in the affairs of a legal entity by way of:

• the right to elect or appoint some of the members of the legal entity’s supervisory or administrative organ; or
• the right to recommend or oppose, or both, the appointment of some or all of the members of the legal entity’s supervisory or administrative organ.

European Works Councils

The European Works Council (Further Provisions) Regulations Subsidiary Legislation 452.107) seeks to improve the right to information and consultation of employees in community-scale undertakings and community-scale groups of undertakings by regulating the setting up of a European works council or a procedure for informing and consulting employees in every such undertaking and group of undertakings.

The said regulations apply specifically to:

• community-scale undertakings, being any undertaking with at least one thousand employees within the EU Member States and at least one hundred and fifty employees in each of at least two EU Member States; and
• community-scale groups of undertakings, being a group of undertakings with at least one thousand employees within EU Member States, at least two group undertakings in different EU Member States, and at least one group undertaking with at least one hundred and fifty employees in one EU Member State and at least one other group undertaking with at least one hundred and fifty employees in another EU Member State.

A European works council is set up with the purpose of informing and consulting employees of the said undertakings, while effectively representing their collective interest.

European Companies & European Co-operative Societies

The Employee Involvement (European Company) Regulations (Subsidiary Legislation 452.94) establish the arrangements for the involvement of employees in the affairs of European public limited liability companies, otherwise known as Societas Europaea, including any information, consultation, participation or any other mechanism through which employees’ representatives may exercise an influence on decisions to be taken within the company.

Similarly, the Employee Involvement (European Co-operative Society) Regulations (Subsidiary Legislation 452.98) establish arrangements for the involvement of employees in the affairs of European Co-operative Societies.

Right to Information in Large Undertakings

When it comes to undertakings that employ at least fifty employees, The Employee (Information and Consultation) Regulations (Subsidiary Legislation 452.96) establishes a general framework setting out minimum requirements for the right to information and consultation of employees in such undertakings.

Any such employer is required to make the practical arrangements necessary to allow its employees to effectively exercise the right to information and consultation in accordance with the said regulations through the standard information and consultation provisions set out therein.

The employer must provide the information and consultation representatives with information on:

1. the recent and probable development of the undertaking’s activities and economic situation;
2. the situation, structure and probable development of employment within the undertaking and on any anticipatory measures envisaged, in particular, where there is a threat to employment within the undertaking; and
3. information and consultation on decisions likely to lead to substantial changes in work organisation or in contractual relations.

The employer must also consult the information and consultation representatives on the matters referred to in points (2) and (3) above. Information and consultation of employees must be carried out:

1. in the case of undertakings where there is one or more recognized trade union/s covering all categories of employees, with the representatives of the recognized trade union or unions;
2. in the case of undertakings where the recognized trade union/s do not represent all categories of employees, with the representatives of the recognized trade union/s, together with the elected or appointed representatives of the workers in the unrepresented categories;
3. in the case where there is no recognized trade union, with the representatives of the employees elected or appointed by means of a secret ballot from amongst all employees.