Contracts and Dismissals

Written Employment Particulars

In accordance with the Employment and Industrial Relations Act, an employer has to explain to the employee the provisions of any recognised conditions of employment as may be applicable and deliver to the employee a written statement about such conditions as may be prescribed (in regulations).

If a written contract has been signed between the parties, the employer is bound to provide the worker with a signed copy of the agreement until the 8th working days from the day of commencement of the contract. In cases where a written contract has not been signed between the parties or if a written contract does not include all necessary information that an employee needs to be notified about, the employer is bound to provide a worker with a letter of engagement or a signed statement within eight working days from the date of commencement of employment.

Such letter or statement should include following information: personal information of the parties; date of commencement of contract; probation period; wage rate and overtime rates; wage payment intervals; normal hours of work; expected or agreed duration of employment contract (for fixed term contracts); vacations and holidays; job description and job title; notice period; condition under which fines may be imposed; and reference to a collective agreement governing an employee's working conditions and all other relevant or applicable conditions of employment.

An employer who contravenes the above provisions is guilty of an offence and is liable on conviction to a fine of not less than €116.47c and not more than €1,164.69c.

Employers must inform workers of essential employment details, including employer information, place of work, job specifics, start date, and, if applicable, end date. This information encompasses various aspects such as leave entitlements, termination procedures, remuneration details, and conditions of employment. The employer is obligated to provide this information within specified timeframes, either within the first seven days or one month, depending on the nature of the details. Additionally, if engaging an outworker, the employer must furnish additional information about the work rate and special contract conditions. This obligation does not exempt employers from complying with minimum conditions stipulated by applicable laws and regulations.

Sources: §7 of the Employment and Industrial Relations Act; Information to Employees Regulations (S.L.452.83); §5-6 of the Transparent and Predictable Working Conditions Regulations, 2022

Fixed Term Contracts

Employment contracts may be concluded for an indefinite period of time, for a fixed period of time, or for completion of a specific task, undertaking, work or service. If an employee is retained in employment after termination of a fixed-term contract or is re-employed in the same category by the employer for a fixed or indefinite term within one year from termination of employment, his/her conditions of service should not be less favourable than those with indefinite contracts.

An employee whose fixed-term contract has expired, but he is still retained by the employer, is deemed to be retained on an indefinite term contract if the said employee is not given a new contract within 12 days of the expiry of the previous contract.

The maximum length of a fixed-term contract, including renewals, is 48 months (4 years). If a worker has been continuously employed for a total term of more than 4 years, his fixed-term contract is transformed into a contract of indefinite term. An employer may only retain an employee on a fixed-term contract beyond four years when such retention is justified by objective reasons based on precise and concrete circumstances in a given activity. Certain situations where longer periods of fixed-term contracts are allowed are mentioned in the regulations.

Sources: §33 & 34 of the Employment and Industrial Relations Act; Contracts of Service for a Fixed Term Regulations (S.L.452.81)

Probation Period

In accordance with the Employment and Industrial Relations Act, the first 06 months of employment are considered a probationary period unless a shorter period has been agreed between the parties. However, for employees holding technical, executive, administrative or managerial posts and whose wages are at least double the minimum wage established in that year, the probation period is 12 months (one year) unless otherwise specified in the contract of service or collective agreement.

Sources: §36 of the Employment and Industrial Relations Act

Termination of Employment

A fixed-term contract normally ends on the agreed date. If either party ends the contract early without good and sufficient cause, they must pay compensation equal to half the wages that would have been payable for the unexpired duration of the contract. Fixed-term contracts are generally expected to run for at least six months unless objective reasons justify a shorter term, and that they may not exceed four years. Where the employer terminates a fixed-term contract on redundancy grounds after probation, the employee is likewise entitled to half the remaining wages. For indefinite employment, dismissal is generally justified only for good and sufficient cause or redundancy. After probation, an employee may resign without giving reasons, provided the required notice is served. The statutory notice period depends on length of service and increases progressively from one week up to a maximum of twelve weeks, unless a longer period is lawfully agreed for certain senior technical, administrative, executive or managerial roles. If an employee leaves without giving the required notice, the employer may recover half the wages covering the unworked notice period. If the employee gives notice and the employer chooses not to let the employee work till completion of notice, full wages for the remainder of that notice period are normally due. If notice is given by the employer, the employee may either work the period or ask to stop working and receive half the wages for that period. A redundant employee has a statutory right to re-engagement if the same post becomes available again within one year. If that obligation is breached, proceedings may be brought before the Industrial Tribunal within four months of the breach. Collective redundancies are subject to a more formal process. Over a 30-day period, the regime is triggered where redundancy affects: 10 or more employees in establishments normally employing 20 to 99 employees, 10% employees or more in establishments employing 100 to 299 employees, or 30 employees or more in establishments employing at least 300 employees. The employer must notify the employees’ representatives in writing, copy the Director of the Department of Industrial and Employment Relations (DIER), begin consultations within seven working days, and provide a written statement covering the statutory information required by the regulations. As a rule, the dismissals cannot take effect before the lapse of 30 days from notification, although the Director may shorten that period or extend it by a further 30 days in exceptional cases. Contravention of the regulations is an offence punishable by a fine for every employee declared redundant. An unfair dismissal complaint must be filed before the Industrial Tribunal within four months of the dismissal. Where the Tribunal upholds the claim, the statutory remedies include reinstatement or re-engagement and/or compensation, depending on the case. An employee whose employment lasted more than one month is entitled, on request, to a certificate of employment; the reason for termination is included only if the employee asks for it. Outstanding wages, overtime, statutory bonuses, notice money and payment in lieu of unused leave should be settled by the next pay date. Employers must also notify Jobsplus (Malta's Public Employment Service) of the termination within the statutory filing period. Source: §33-42 & 78-82 of the Employment and Industrial Relations Act (Cap. 452), 2025; Transfer of Business (Protection of Employment) Regulations (SL. 452. 85); Collective Redundancies (Protection of Employment) Regulations (S.L. 452.80); Part III of the Employment and Training Services Act, 2019 (Cap. 594)