MALTA Law and Practice Contributed by: Paul Gonzi, Rebecca Diacono and Mattea Pullicino, Fenech & Fenech Advocates
7. Termination 7.1 Grounds for Termination Termination During Probation
The responsibilities, privileges and obligations of trade unions in Malta are regulated by means of the EIRA. Trade unions have the power to enter into contracts and, subject to certain restrictions, may sue and be sued. Trade unions also enjoy a certain degree of protection from liability in carrying out their legitimate activities, particularly when acting in contemplation or in furtherance of a trade dispute. However, the EIRA delineates exceptions to industrial disputes relating to essential-service industries. The EIRA also extends protection to employees who follow directives issued by a union in contemplation or furtherance of a trade dispute. 6.2 Employee Representative Bodies Where no trade union is recognised within a place of work, the law grants the right to employees to elect an employee representative. This applies to workplaces with more than 50 employees. Employee representa - tives are not granted any voting or decision-making rights but, in certain instances, are entitled to receive information and engage in consultations with the employer. 6.3 Collective Bargaining Agreements Collective bargaining agreements are contracts nego - tiated between trade unions and employers to regulate minimum conditions within a workforce, or sections of the workforce. The EIRA recognises collective agree - ments in so far as they are duly registered. Clauses in collective agreements cannot provide for conditions that are less favourable than the minimum provided by the law. Collective agreements generally regulate, among others, employees’ terms and conditions of employ - ment, such as employee wages and benefits, employ - ee duties, and health and safety. Such agreements also delineate the duties and responsibilities of the employer and also often lay down the applicable rules for cases that require disciplinary proceedings.
For both definite and indefinite contracts of employ - ment, the law details a probationary period during which both the employer and the employee may terminate employment without providing a reason, although parties may decide to contract out of such a probationary period. One week’s notice must be given should the employee have been in employment for more than one month. Special rules apply to employ - ees who are pregnant or on maternity leave or who have suffered a work injury. Termination of Definite Contracts of Employment Fixed-term contracts cannot be terminated prior to the expiration of the stipulated term, except on the basis of “good and sufficient cause”. Should either party terminate prior to the lapse of the specified term, the terminating party would be liable to pay the other party half of the wages that would have accrued to the employee in respect of the remainder of the time specifically agreed upon. Termination of Indefinite Contracts of Employment With regards to termination of employment follow - ing the expiration of a probationary period, if any, an indefinite contract of employment may be terminated by the employer on the grounds of: • good and sufficient cause; • redundancy; or • reaching retirement age. With regards to the latter, an employer may termi - nate an employee’s employment when the employee reaches pensionable age without giving prior notice or having any other valid reason by law. Pension age in Malta is 62; however, the pensionable age may also vary depending on the employee’s birth year. The term “good and sufficient cause” is not defined by law. However, the law delineates what does not con - stitute “good and sufficient cause” – eg, termination on the occasion of an employee’s marriage.
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