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Recent Legislative Developments on Fixed Term Contracts & Probationary Periods

Mariella Baldacchino

Mariella Baldacchino

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Recent Legislative Developments on Fixed Term Contracts & Probationary Periods

 

The end of 2022 saw the introduction of important amendments to the provisions of the Employment and Industrial Relations Act (EIRA) regulating the duration of fixed term employment contracts as well as employee probationary periods.

 

These amendments are meant to partially 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.

 

Employers and employees alike should be aware of the following legislative developments which may affect their respective rights and obligations:

 

Fixed Term Employment Contract Duration

 

  • A fixed term contract may not be shorter than 6 months, unless a shorter period is justified by objective reasons based on precise and concrete circumstances characterising a given activity.

 

  • Whenever an employer intends to enter into a contract of service for a fixed term with a prospective employee for a period shorter than 6 months, the employer must list in writing in that contract the objective reasons for which such contract is entered into for less than 6 months.

 

Probationary Periods – General Rule

 

  • The EIRA sets out the general rule that, when an employment relationship is subject to a probationary period, such period must be of 6 months. This general rule is subject to certain exceptions as outlined below.

 

Probationary Periods for Fixed Term Employment Relationships

 

  • In the case of fixed term employment relationships, the length of a probationary period must be proportionate to the expected duration of the contract and the nature of the work.

 

  • In the case of the renewal of a fixed term contract for the same function and tasks, the employment relationship may not be subject to a new probationary period.

 

  • In the case of a fixed term contract having a duration of between 6 and 15 months, the probationary period must be calculated on the basis of a 2-month probationary period for each 6-month period of the contract

 

  • If the fixed term contract is shorter than 6 months, the probationary period must be one-third of the duration of such fixed term contract.

 

  • In the case of a fixed term contract exceeding a term of 15 months, the probationary period must be of 6 months.

 

Technical, Executive, Administrative or Managerial Positions

 

  • Workers holding technical, executive, administrative or managerial positions, and whose wages are at least double the prescribed national minimum wage, shall be on probation for a period of 12

 

Shorter Probationary Periods

 

  • The probationary period may, by agreement between the employer and the employee, be shorter than the respective periods outlined above.

 

Suspension of Probationary Periods

 

  • The probationary period must be suspended in the case of any 2 weeks or more of approved leave. In such case, the probationary period shall be extended by a period corresponding to the duration of the said approved

 

  • It is unlawful for an employer to dismiss a worker during the period of suspension of probation.

 

If you have any questions on any of the topics raised above, please contact us on info@empleo.com.mt or through our other contact channels.

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Dr. Mariella Baldacchino - Founder

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.

Dr. Bradley Gatt - Of Counsel

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.

Dr. Karl Sammut - Of Counsel

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.