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Mariella Baldacchino
January 5, 2024
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LN270 of 2023 comprises new regulations that aim to reshape the employment agency landscape in Malta. It is significant for its impact on recruitment agencies, temporary work agencies, and service providers, with the goal of standardizing employment agency conditions, establishing clear procedures, enforcing licence conditions, and ensuring that qualified and competent individuals are involved in these operations.
The regulations cover a range of entities involved in the employment business:
(the ‘employment agency’ or ‘employment business’)
Yes, the regulations do not apply to employers conducting recruitment for their own undertakings, recruitment on behalf of any employer specifying the employer’s identity, outsourcing agencies providing specific professional and technical services, and Jobsplus when functioning as an employment agency.
Individuals holding a valid licence granted by Director. The licence can be for either recruitment, temporary work agency, or outsourcing agency.
The license can be granted for either (i) recruitment or (ii) to render either or both activities related to temporary work and outsourcing agencies. This may necessitate two (2) separate licenses if the applicant intends to engage in both services.
Effective Date: Starting from 1st April 2024.
Transition Period: first-time applicants falling under the regulations have two (2) months transitional period (June 2024) to secure the required licenses. Renewal applications for existing employment agency licences must be submitted at least two (2) months before the license expiration or, if the expiration occurs earlier than two (2) months from the day of the coming into force of the regulations, a renewal application is to be submitted within one (1) month of the coming into force of the regulations.
License Applications: The Department of Industrial Relations will commence accepting first-time license applications from January 2024.
Yes, an applicant must display a notice of their intention to run the employment agency for public view for a period of twenty-one (21) days prior to submitting the relative application, and advertise notice of application in two daily newspapers.
The notice of intention must state the name and address of the applicant, and in cases where the applicant is a legal person, the applicant’s registration number, its registered office, and the address of the premises from which the employment agency is to be carried out.
The application process involves the following steps:
A non-refundable license fee of €3,000 shall apply upon submission of a an application by a first-time applicant. Moreover, a fee of €1,500 must be paid upon submission of every application for the renewal of a licence. The said fees must be paid to the Director together with the relevant application.
The Bank Guarantee is designed to ensure that temporary work agencies or outsourcing agencies adhere to their licenses. If a license is revoked or not renewed, the Director promptly notifies the Administration Board, which then takes steps to forfeit the entire bank guarantee and deposits the corresponding amount into the Agencies Guarantee Fund. This fund, managed by the Administration Board, is established to provide compensation to employees of such agencies whose employment is terminated due to license revocation or non-renewal. The fund is authorized to collect, recover, and initiate legal proceedings to enforce its rights as defined by the Regulations.
Employees under a contract of employment with a temporary work agency or an outsourcing agency have rights in case of termination due to licence issues.
If an employee’s termination is a result of the license revocation or non-renewal, the employee is required to report this event to the Director and the Administration Board within two (2) months from the termination date.
Any remedy under these regulations does not limit the employee’s claim under any other provision of the law.
Where the Administration Board accepts an employee’s claim that his termination results from a licence revocation or non-renewal, the Administration Board distributes the Bank Guarantee amount equally amongst all eligible employees with similar claims.
The Bank Guarantee is released within three (3) months of termination or non-renewal of a licence, once the Administration Board is satisfied (i) that the agency no longer intends to conduct such licensable activities and (ii) has met all licence and the regulatory obligations.
A competent person shall be responsible for the proper management of the employment agency and shall be:
Where competent person cannot fulfil such position, a new competent person may be appointed with the Director’s approval.
The Director may refuse an application for a license or revoke an existing license for an employment agency or business on grounds that include failure to promptly address non-compliance with licence requirements (within 30 days), non-compliance with tax and social security obligations, convictions under the Employment and Industrial Relations Act (EIRA) or related regulations, charging fees from applicants for employment services, and failure to provide a bank guarantee.
The Director may also refuse an application according to the determination of a Working Committee, that the person is not a fit and proper person to provide the services concerned, based on a full vetting process undertaken by the Malta Police Force, and/or convictions related to immigration laws, on the applicant, competent persons or directors.
A full vetting process conducted by the Malta Police involves checking if the applicant (if natural person), competent person or directors or every person who directly or indirectly owns or controls twenty-five per cent (25%) or more of the capital of the applicant have been convicted or charged for criminal offenses punishable with more than two (2) years imprisonment, excluding involuntary offence.
As Malta’s employment landscape evolves, employers, employment service providers and other stakeholders must stay informed and ensure compliance with the regulatory changes. The enhancement of a licensing system and the establishment of oversight mechanisms reflects a commitment to fair and transparent employment practices in Malta.
At empleo, we can assist employment agencies with the licence application process. We also provide legal advice as well as assistance in relation to any further questions to the 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.
