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Termination of Employment​

Other-Rights-on-Termination
Termination certificate
 

On the termination of a contract of service lasting over one month, the employer shall be bound, at the employee’s request, to give him/her a certificate stating the duration of the employment, the nature of the work or services performed and, if the employee so desires, the reason for the termination of the contract, and the rate of wages paid. The employer shall not be required to state the reason of termination of employment, if the employment was terminated during probation.

 

Redundancy and unfair dismissal

The employer is under a legal obligation to re-engage an employee previously dismissed on the basis of redundancy if the post formerly occupied by him/her becomes available within a period of one year from the date of dismissal. If the employer breaches this legal obligation, the employee can initiate proceedings before the Industrial Tribunal within four months from the said breach.

An employee who alleges unfair dismissal can lodge a complaint to the Industrial Tribunal within four months from the dismissal.

Settlement of outstanding dues

Without prejudice to what may be due under the law relating to notice, the employee is entitled to be paid for all entitlements, on a proportional basis according to the period of employment. Employees who had their employment terminated are to see that they receive any remuneration that may be due to them that include wages, overtime payments, statutory bonuses, notice money and monetary settlement of leave not availed of. All outstanding wages should be settled by the next pay date following the termination of employment. An employee who is not paid for his/her work or does not receive his/her wage on time must first bring this to the attention of his employer. If the employer persists in not issuing the payment due, the employee can report the matter to the Department of Industrial and Employment Relations for action from its end.

Important

On forwarding a claim to the Department to recover any payments due by the employer, the employee is to provide any documents which are of relevance to his/her case, mainly: copies of the engagement and termination forms issued by Jobsplus; contract of employment/letter of appointment; pay slips; FS3; proof of payment (bank transfers, cheque statements); timesheets; vacation and sick leave records, and any other documents related to that particular period of employment.

Article by DIER, for further information please contact us or visit the website DIER

 

Notice-Period

When terminating employment during a probationary period, a one week notice applies if the length of service is longer than one month.

In case of indefinite contracts which extend beyond the probation period, notice has to be given prior to the termination of employment. Notice is to be given either by the employee, or by the employer in cases of redundancy. Notice is calculated on the employee’s continuous length of service, as follows:
 
 
 
 
 
- Not more than one month - No notice
- More than one month and up to six months - One week

- More than six months and up to two years - Two weeks

- More than two years and up to four years - Four weeks

- More than four years and up to seven years - Eight weeks

- More than seven years and up to eight years - Nine weeks

- More than eight years and up to nine years - Ten weeks

- More than nine years and up to ten years - Eleven weeks

- More than ten years - Twelve weeks

Longer periods may be agreed by the employer and employee in the case of technical, administrative, executive or managerial posts 

The established notice period cannot be extended. 

Article by DIER, for further information please contact us or visit the website DIER

Guarantee fund1. What is the Guarantee Fund?

It is a fund intended to guarantee payment of unpaid wages (please refer to Question 5) due by an employer to those employees whose employment is terminated because of the employer’s proved insolvency. This Fund is administered by the Guarantee Fund Administration Board.

 

2. Who is entitled to present a claim to the Guarantee Fund?

All employees’ "whose employers company is in a state of Insolvency except employees who are":
- private domestic servants;
- share-fishermen;
- an employee who, on his or her own or together with his or her parents, spouse, children or siblings, was the owner or part owner of the employer’s undertaking or business and had a considerable influence on its activities.
 
 
3. What is insolvency for the purposes of the Guarantee Fund?
 
a) For the purposes of the Guarantee Fund, an employer shall be deemed to be in a state of insolvency:
 - where a request has been made for the commencement of proceedings for bankruptcy of the employer under Part III of the Commercial Code and the Court has established that the employer’s undertaking or business has been definitely closed down, and that the available assets are insufficient to cover the payment of the claim, or
 - where the Court has either appointed a provisional liquidator or administrator, or a liquidator after a winding up order in terms of the Companies Act.
b) The date wherein an employer shall be considered to be insolvent shall be the earlier of the date:
 - of adjudication of bankruptcy by the Court; or

 - when a liquidator is appointed in accordance with the Companies Act.

 

4. How can an employee make a claim to the Guarantee Fund?

An employee can file a valid claim for unpaid wages by submitting the following document:

- a valid claim for unpaid wages to the Board of Directors of the Guarantee Fund;

- certified proof that he has registered a valid claim for unpaid wages in the insolvency proceedings of the employer; And

- certified proof that you have registered a valid claim for unpaid wages with the Department of Industrial and Labor Relations to the Board of Directors of the Guarantee Fund within two months of the insolvency of the employer for:

"President

Board of Directors of the Guarantee Fund

c / o 121, via Melita

Valletta "

 

5. What can the employee claim?

a) Every individual employee may register a claim limited to the unpaid amounts due for:
- unpaid wages, which shall consist of the basic wage for the relevant unpaid period;
- any unpaid overtime;
- arrears for any leave entitlement for the current and preceding calendar year, 

- any notice money due in accordance with the laws of Malta;

b) The claim registered by every individual employee shall refer to unpaid amounts which were due for wages payable within six months preceding the date of the onset of insolvency of the employer or preceding the termination of employment. 

c) Amounts paid by the Guarantee Fund shall in no case exceed a sum which is equivalent to thirteen weeks’ national minimum wage payable at the time of the termination of employment of such employee. 
 
 
6. What is the procedure adopted following the employee’s claim?
 

The documentation given by the employee would be forwarded to the Administration Board along with the claim, so that the Administration Board, can reach a decision as to the validity of the claim being presented. The Administration Board may request any information from any person to enable it to perform its obligations, and it shall be the duty of any such person to cooperate fully with the Administration Board.

 

7. What are the duties of the employee who benefits from the Guarantee Fund?

The employee binds himself to reimburse the Fund with a sum equivalent to the amount paid out of the Fund by the Administration Board in respect of the claim made by the employee from any amounts retrieved from any court proceedings or from any settlement received from a liquidator, as the case may be.

 

8. What happens if an employee lodges a false claim?

Any person who is found guilty of registering a false claim for unpaid amounts or who is found guilty of acting in collusion with an employer or an employee in order to obtain payments from the Fund, shall be guilty of an offence and shall be liable on conviction to a fine (multa) which is equivalent to ten times the amount paid out of the Fund, together with any other punishment to which the offender shall be liable according to any other applicable law.

Article by DIER, for further information please contact us or visit the website DIER

 

Fixed-Term-Contracts

A Fixed Term Contract can be terminated during its applicable probation period without assigning any reason. However, one week notice (by either party) applies if the employment exceeds one month.

Where there is not a justified reason to terminate an employment that is on definite basis after the probation period, the part who breaches the contract is liable to pay the other part a sum equal to one-half of the full wages that would have accrued had the contract of employment remained in force.

In situations of redundancy at the place of work, employees on fixed term contracts are also affected by the procedures of last in/first out in the same category, as other employees on indefinite contracts. Employees who are so affected by redundancy are entitled to be paid compensation as indicated in the paragraph above.

Article by DIER, for further information please contact us or visit the website DIER

Compensation-in-Lieu-of-Notice

The Notice when given by the employee

When the employee abandons employment and/or fails to give notice s/he shall be liable to pay to the employer a sum equal to half the wages that would be payable in respect of the period of notice that is not worked. If the employee while working the notice decides not to continue to work the notice period, s/he is also liable to pay to the employer a sum equal to half the wages that would be payable in respect of the unexpired period of notice.

If on giving notice or while working the notice, the employer decides not to allow the employee to work or continue to work the notice, the employer will be obliged to pay to the employee a sum equal to the full wages that would be payable in respect of the unexpired period of notice.

The Notice when given by the employer:

On receiving notice from the employer, the employee has the option to either continue to work the notice period, or to request the employer to pay him/her a sum equal to half the wages that would be payable in respect of the unexpired period of notice.

If the employee decides to terminate employment at any time while working the notice, the employer is also obliged to pay the employee a sum equal to half the wages that would be payable in respect of the unexpired period of notice.

If the employer decides not to allow the employee to work or not to continue to work the notice, the employer is obliged to pay to the employee a sum equal to the full wages that would be payable in respect of the unexpired period of notice.

Waiving of Notice:

In any case, notice which is due in terms of law is waived when there is a good and sufficient cause (eg. Disciplinary action, medical condition).

Article by DIER, for further information please contact us or visit the website DIER

 

Collective-Redundancies

What constitutes a collective redundancy?

It is the termination of the employment by an employer on grounds of redundancy, over a period of thirty days, of:

- 10 or more employees in establishments normally employing 20 to 99 employees;

- 10% or more of the number of employees in establishments employing 100 to 299 employees; and

- 30 or more in establishments employing 300 employees or above

Collective Redundancies are regulated by Legal Notice 428 of 2002 – Collective Redundancies (Protection of Employment) Regulations

 

Consultation with Employees’ Representatives

The Employer proposing to declare the collective redundancy has the duty to notify in writing the Employees’ Representatives, also forwarding a copy to the Director of the Department of Industrial and Employment Relations, about such intention while giving the said representatives an opportunity to consult. Such consultations between the employer and the employees’ representatives should commence within seven working days from the day of notification and are intended to cover ways and means of avoiding the collective redundancies or reducing the number of employees affected by such redundancies and for mitigating the consequences thereof.

 

Information to the Employees’ Representatives

Within the period of seven days mentioned above the employer has the duty to supply the Employees’ Representatives with a written statement, also forwarding a copy to the Director the Department of Industrial and Employment Relations, providing:

- The reasons for the redundancies

- Number of employees intended to be made redundant

- Number of employees normally employed

- The criteria proposed for the selection of the employees to be made redundant

- Details regarding any redundancy payments which are due

- The period over which redundancies are to be effected. 

 

When redundancies are to take effect

The notice of termination of employment may begin to run from the date of the commencement of the consultations with the employees’ representatives. However, the employer cannot terminate the employment of employees effected by any projected collective redundancy notified to the Director responsible for Employment and Industrial Relations, before the lapse of thirty days from notification. In exceptional circumstances however, the Director responsible for Employment and Industrial Relations may grant the employer a shorter period of notification. Nevertheless, the Director may also extend the said period by a second period of thirty days if it is deemed that such extension may provide further opportunity for the resolution of the reasons for the redundancies or for the identification of solutions to the benefit of those employees who are being declared redundant. The employer shall be informed of such extension by notice in writing, prior to the lapse of the initial period.

Offences

Any person contravening the provisions of the applicable regulations shall he guilty of an offence and shall, on conviction, will be punished with a penalty of not less than €1,164.69 for every employee that is declared redundant. 

Article by DIER, for further information please contact us or visit the website DIER

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