Employment Contracts

What is a Contract of Employment?

A contract of employment is an agreement – whether oral or in writing and which may take any form – whereby a person binds himself to render service to, or conduct work for, an employer, in return for wages.

Although an employment contract may be verbal, we strongly advise employers to formalise their employment relationships with their employees in writing, in the form of a written contract of employment signed by the employer and each employee and which clearly sets out the applicable employment terms between the parties.

Important Employment Formalities

Where a written contract of employment has been signed between the employer and the employee, the employer must deliver to the employee a signed copy of such agreement by not later than seven (7) calendar days from the first working day in terms of the Transparent and Predictable Working Conditions Regulations (Subsidiary Legislation 452.126, “the Regulations”), which transpose Directive (EU) 2019/1152 of the European Parliament and of the Council of 20 June 2019 on transparent and predictable working conditions in the European Union.

In those cases where no such written contract of employment has been signed, the employer is bound to inform the employee in writing of the essential aspects of the employment relationship. The said Regulations set out the minimum categories of information that the employer must disclose to the employee in writing as aforesaid. Such information must be given by the employer by not later than seven calendar days or one (1) month from the first working day (depending on the nature of the information). In the case of any employee required to work outside Malta for a period exceeding four (4) consecutive weeks, the said documents must be in the employee’s possession before departure from Malta.

Details required in a Contract of Employment

Any such written contract of employment or letter of engagement or signed statement must set out certain essential information relating to the employment relationship, which shall include the following information:

1. the name, registration number and registered place of business of the employer and a legally valid identification document number, gender and address of the employee and the place of work. In the absence of a fixed place of work, it should be stated that the employee will be employed at various places together with the registered place of business. If there is no registered place of business, the domicile of the employer is to be stated;
2. the place of work. Where there is no fixed or main place of work, the principle that the worker is employed at various places or is free to determine his place of work, and the registered place of business or, where appropriate, the domicile of the employer;
3. the title, grade, nature or category of the work for which the employee is employed;
4. brief specification or description of the work
5. the date of commencement of employment;
6. in the case of a fixed term contract of employment, the end date or the expected duration thereof;
7. in the case of temporary agency workers, the identity of the user undertakings, when and as soon as known;
8. the duration and conditions of the probationary period. The first six months of any employment under a contract of service shall be probationary employment, unless otherwise agreed by both parties for a shorter probation period. In the case of a contract of service relating to employees holding technical, executive, administrative or managerial posts and whose wages are at least double the minimum wage established in that year, such probation period shall be of one year unless otherwise specified in the employment contract;
9. the training entitlement provided by the employer, if any
10. the amount of paid leave, vacation leave, parental leave, maternity leave, carer’s leave, urgent family leave, bereavement leave, marriage leave, quarantine leave, jury service leave, sick leave and injury leave or where this cannot be indicated when the information is given, the procedures for allocating and determining such leave.
11. the procedure to be observed by the employer and the worker, including the formal requirements and the notice periods, where their employment relationship is terminated or, where the length of the notice periods cannot be indicated when the information is given, the method for determining such notice periods;
12. the remuneration, including the initial basic amount and any other component elements, if applicable;
13. the frequency and method of payment of the remuneration to which the worker is entitled, and the conditions under which fines may be imposed by the employer and their quantum;
14. the length of the worker’s standard working day or week and any arrangements for overtime and its remuneration and where applicable, any arrangements for shift changes;
15. if the work pattern is entirely or mostly unpredictable, the employer shall inform the worker of:
    • the principle that the work schedule is variable, the number of guaranteed paid hours and the remuneration for work performed in addition to those guaranteed hours;
    • the reference hours and days within which the worker may be required to work; 
    • the minimum notice period to which the worker is entitled before the start of a work assignment and, where applicable, the deadline for cancellation of the work assignment;
16. the collective agreement, if any, governing the employee’s conditions of work;
17. the identity of the social security institution receiving the social contributions attached to the employment relationship and any protection relating to social security provided by the employer;
18. in the case of an employee required to work in a country other than Malta for a period exceeding four (4) consecutive weeks:
    • the country or countries in which the work abroad is to be performed and its anticipated duration; 
    • the duration of the employment abroad;
    • the currency to be used for the payment of remuneration;  
    • where appropriate, the benefits in cash or kind attendant on the employment abroad; and 
    • where appropriate, the conditions governing the employee’s repatriation; 
19. in case of outworkers, employer shall provide the employee with a signed statement showing: 
    • the name, registration number and registered place of business of the employer and a legally valid identification document number and address of the employee;  
    • the rate to be paid for the work; and
    • any special conditions regulating the contract 
20. any other relevant or applicable condition of employment, whether agreed between the parties or otherwise required to be specified by any applicable law. 

Furthermore, the employer must keep a list of records with respect to each employee.  

Some of the information outlined above may, where appropriate, be given in the form of a reference to the laws, regulations and administrative or statutory provisions or collective agreements governing that information. 

Changes to Employment Contracts

Insofar as an employment contract is an agreement between two parties, any changes to an employment contract may only be effected with the consent of both the employer and the employee.  

The employee is further protected by the Regulations, which state that no condition of employment can be modified or amended after the commencement of employment, unless amendments to employment conditions result from a change in any applicable laws, regulations or collective agreement. We strongly advise employers to maintain an open and regular channel of communication with their employees on any legislative or regulatory developments that may affect their employment. 

Zero-hour contracts 

The Regulations have also introduced a prohibition of zero-hour contracts (a contract where a minimum number of hours are not guaranteed to the employee) except where: 

1. nature of activity concerned requires the availability of replacement workers on short notice and that contract is not a full time employment;
2. the worker is a full-time student. 

Parallel employment 

An employer may not prohibit a worker from taking up employment with other employers, outside the work schedule established with that employer, nor subject a worker to adverse treatment for doing so unless there are objective grounds, such as health and safety, protection of business confidentiality, the integrity of the public service or the avoidance of conflicts of interest.