Employment Law

  • By:Corrieri Cilia Legal
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The right to work is recognised as a fundamental right in its Constitution. Employment Law is highly regulated in Malta with its principal source the Constitution of Malta, The Employment and Industrial Relations Act (EIRA) in conjunction with various other regulations made under the Act. Other sources of legislation include the Employment and Training Services Act, the Employment Commission Act and the Employment and Training Services Act. Members of the public service have their conditions of employment regulated by means of the Public Service Management Code or “PSMC” which was introduced in 2002. Employment in Malta is also regulated by industry specific collective agreements.

The Contract of Employment

The law lays down a set of minimum written particulars which must be provided to the employee within eight working days of commencement. Other provisions such as inter alia confidentiality, data protection and Intellectual Property may be added to the contract. Contracts may be definite (fixed term) or indefinite in nature. A fixed term contract can be successively renewed up to a maximum period of 4 years after which the employee shall be considered to be under a contract of indefinite duration. The exception occurs when the employer has justifiable reasons for retaining the employee on a fixed term contract. An employee whose fixed term contract has expired and is retained in employment will be considered to be under an indefinite contract if the employer does not produce a new contract of service within 12 days following the expiry of the previous contract.

The first 6 months of employment is considered probation unless a shorter term is agreed to by the parties. By way of exception to this rule, in the case of contracts of service, or collective agreements in respect of employees holding technical, executive, administrative or managerial posts whose wages are at least double the applicable minimum wage, such probation period is of 1 year unless a shorter period is agreed upon in the contract of service or in the collective agreement.


A contract of employment may be terminated by the employer on the grounds of:

  • Good and sufficient cause;
  • Redundancy; or
  • Reaching retirement age.

Where good and sufficient cause has been shown, the employer does not need to give advance notice of termination and/or pay the employee for the notice period or for the unexpired period in an employment contract.

Where an employer intends to terminate the employment of an employee on grounds of redundancy, it shall first terminate the employment of workers who were engaged last in the class of employment affected by such redundancy. However, where the employer and the last employed employee are related by consanguinity or affinity up to the third degree, the employer may, instead of terminating the employment of such person, terminate that of the person next in turn.

If a redundancy is found to be unjustified or if a dismissed is deemed unfair Industrial Tribunals have the power to award compensation or reinstatement. Great care must be taken with warnings, dismissals for misconduct, absenteeism and poor performance. These are all potentially complicated areas which if handled incorrectly and can lead to a dismissal being treated as unfair.

Transfer of Undertakings

Reference needs to be made to the Transfer of Business (Protection of Employment) Regulation when a business is purchased or sold.  When a business or other undertaking is transferred to or otherwise taken over by another person or entity, any current employee shall be deemed an employee of the “new” employer. The new employer shall take on all the rights and obligations that the employee had prior to the transfer of the undertaking. for the seller there is an obligation to consult with representatives of all employees who are affected by the transfer.

Data protection

When processing employees’ data, the employer must ensure that such data is:

  • collected and recorded for specific, explicit and legitimate purposes
  • accurate and, if necessary, updated
  • pertinent, complete and not exceeding the purposes for which it was collected or subsequently processed
  • strictly related to the purposes for which the data was collected or subsequently processed

Employers in their capacity as data controllers must take measures to ensure that employees who will be involved in processing other employees’ or customers’ personal data are contractually bound to process such data acting only on the instructions of the employer. Employers are to take security measures to protect the personal data against accidental, destruction or loss or unlawful forms or processing are in place.

It is also good practice for employers to include in the contract of employment a clause to the effect that the employer’s communication systems are made available to the employee with the understanding that these are used by solely and exclusively in furtherance of the employer’s business and that all communications made through the employer’s communication systems are subject to interception, surveillance and monitoring. This avoids potentially uncomfortable privacy-related situations for the employer by making things clear to all employees from the outset.

Our team at CC Legal can assist you or your clients in:

  • drafting and advice on employment agreements, internal policies and company memos;
  • obtaining PE numbers and setting up of an HR structure;
  • employment related tax issues such as taxation of fringe benefits;
  • social security contributions;
  • dismissals;
  • Assisting clients identify, manage and reduce business risk in the fields of labour issues, human resources, and health & safety;
  • employment of foreign workers in Malta;
  • litigation and representation before the Industrial Tribunal and the Court of Appeal;
  • The transfer of employment contracts in the case of mergers and acquisitions.
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