During the probationary period, an indefinite contract may be terminated at will by the employer without assigning any reason. Following the lapse of the probationary period, an indefinite employment contract may be terminated by the employer only on grounds of redundancy or if there is good and sufficient cause for such dismissal. The employer can also terminate the employment of an employee when the employee reaches pension age.
If the employer terminates a definite contract of employment before the expiration of the time specified by such contract, the employer must pay to the employee a sum equal to one-half of the full wages that would have accrued to the employee in respect of the remainder of the time specifically agreed upon. However, if there is good and sufficient cause for dismissal, an employee on a definite employment contract may be dismissed without liability to make any of the said payments.
Maltese law does not define the concept of redundancy, nor does the law specify or describe circumstances which would qualify as redundancy. As such, reference should be made to the interpretation given to the scope and extent of this concept by the Industrial Tribunal and the Maltese courts which, in turn, rely heavily on the interpretation of English legal authors and jurisprudence.
Redundancy should not be dependent on the performance or behaviour of the employee at the workplace, but should result from issues relating to the business affairs of the employer.
In the analysis of whether legal and valid grounds for dismissal on the basis of redundancy exist, an employer should start by considering whether his/her business requirements for employees to carry out certain work have ceased or diminished or are expected to do so and, if so, whether dismissal of employees is justified wholly or mainly by such state of affairs.
Where an employer intends to terminate employment on grounds of redundancy, the employer must terminate the employment of that person who was engaged last in the class of employment affected by such redundancy.
If the employer is an individual (and not a company or body) and an employee is related to such employer by consanguinity or affinity up to the third degree, the employer may, instead of terminating the employment of such related employee, terminate the employment of the person next in turn.
Notice of the termination of employment proposed by the employer on grounds of redundancy must be of the following respective duration:
|Term of Service with the same Employer||Notice Period|
|more than one month but not more than six months
|more than six months but not more than two years
|more than two years but not more than four years
|more than four years but not more than seven years
|more than seven years||eight weeks plus an additional one week for every subsequent year of service or part thereof exceeding seven years, up to a maximum of twelve weeks
An indefinite contract of employment with an employee who is engaged in a technical, administrative, executive or managerial post, may prescribe a longer notice period as may be agreed between the employer and the employee. In any case, if the employer fails to give the said notice, the employer would be liable to pay to such employee a sum equal to the wages that would be payable in respect of the period of notice.
On receiving notice of termination from the employer, an employee under an indefinite employment contract has the option either of continuing to perform work until the period of notice expires or, at any time during the currency of the period of notice, of requiring the employer to pay him a sum equal to half the wages that would be payable in respect of the unexpired period of notice.
An employee whose employment is terminated on grounds of redundancy is entitled to re–employment if the post formerly occupied by him becomes available within a period of one year from the date of termination of employment. Such an employee would have to be re–employed at conditions not less favourable than those to which he would have been entitled if his employment had not been terminated.
Special rules apply in the case of collective redundancies. An employer may not terminate employment on grounds of collective redundancy before it has notified in writing the employees’ representatives of the proposed terminations, and such representatives are given an opportunity to consult with the employer. In this respect, the Collective Redundancies (Protection of Employment) Regulations (Subsidiary Legislation 452.80) specify the circumstances in which collective redundancies would be deemed to occur, and also regulate the manner in which consultations between the employer and the employees’ representatives are to take place, amongst other matters.
An employer that dismisses an employee for a good and sufficient cause may do so immediately, without giving any notice. The law does not define or otherwise describe what constitutes a good and sufficient cause for the dismissal of an employee.
However, the law does provide examples of grounds that an employer may not set up as good and sufficient causes for dismissal of employees, such as:
Applicable laws and regulations contemplate other scenarios in which an employer may not dismiss an employee for certain reasons as are specifically prescribed.
In the absence of any specific definition or description of a good and sufficient cause for termination, and in light of the examples specified by applicable law as not justifying summary dismissal, an employer should be able to show that he had a serious enough reason to summarily dismiss an employee and that the employer was left with no other reasonable option in the circumstances.
The employer should never underestimate the importance of having clear internal policies and procedures relating to various aspects of its relationship with its employees, including the types of scenarios in which employees may be dismissed as well as the procedure to be followed by the employer should it decide to dismiss any employees.
Having such documented policies and procedures in place not only increases transparency with its employees, but also minimises the risk of the employer being deemed as having unjustly dismissed an employee.
At Empleo, we provide legal advice to employers on all matters outlined above, including advice and assistance in the preparation of policies and procedures, as well as representation relating to the dismissal of any employee.
Some of our services in this area include the following:
You may get in touch with us here to request an initial free legal consultation in relation to any of the matters outlined above.
Mariella graduated from the University of Malta with a doctorate in law in 2005. She completed a master’s degree in ‘European Private Law’ from the La Sapienza, University of Rome, and was admitted to the bar in Malta in 2006.
Mariella is a people person – and it is this attribute which has really characterised and shaped her career.
Over the years, she headed the legal departments of several corporate services firms. Due to her skillset, she was also entrusted with managing and overseeing operations and human resources, where she gained technical and practical experience in various corporate, commercial and employment matters.
Her practical hands-on experience and insight perfectly complement Mariella’s technical knowledge of employment law, thus placing her in an ideal position to understand and advise employers and employees alike on various matters that may arise at the workplace.
Mariella is passionate about employment law matters and provides her clients with the highest-quality legal service to achieve the best possible outcome and resolve any employment law related issues and concerns.
Bradley graduated Doctor of Laws from the University of Malta in 2005 and was admitted to the Bar in Malta in 2006. He advises clients on various corporate, commercial, employment and regulatory matters, with particular focus on company and financial services law.
He has assisted clients in various corporate and commercial matters by providing company law advice and assisting in the implementation of corporate finance, restructuring, mergers and acquisitions and similar transactions.
Bradley has also advised and assisted investment funds, fund managers and other investment services providers, banks and financial institutions, on various legal and regulatory matters relating to the setting up, authorisation and ongoing conduct of their activities in Malta.
His practice also covers general employment law matters. Bradley’s experience in company and financial services law enables him to focus on various corporate and regulatory aspects of employment relationships. In particular, he advises organisations on the implementation of employee share option and participation schemes, the implications of business transfers on employment relationships, as well as relations with senior employees.
Karl graduated Doctor of Laws from the University of Malta in 2005 and was admitted to the Bar in Malta in 2006.
Karl has gained considerable expertise in technology law and regularly assists clients in relation to intellectual property issues, commercial contracts and ways to ensure compliance with the General Data Protection Regulation (GDPR) and privacy laws. Whilst such matters used to be only given incidental importance when dealing with employment matters, they are now widely acknowledged to be vital in all employment relationships.
He is also regularly engaged by C-level executives to assist in negotiating employment contracts and settlement agreements.
Karl advises across a multitude of industries including technology; marketing; adtech; financial services; gaming; esports; consumer products; and media and telecommunications.