Employment and Industrial Relations Law

Know Your Rights | Understanding Annual Leave

10 Nov 2023

7 min read

Authors: Ann Bugeja & Christine Borg Millo

Paid time-off for all employees is a basic right granted by law and an obligation for all employers to comply with. Any annual leave can be utilised by the employee for whatever reason they wish and at any period of time as agreed upon between the employer and employee. The purpose for which annual leave is being taken by the employee need not be communicated to the employer. Any employee is entitled to use their paid leave as they deem fit in order to improve their overall work-life balance.

Annual leave in Malta is regulated by the Annual leave Standard Order (S.L.452.115) as well as the Organisation of Working Time Regulations (S.L.452.87).

General provisions of Annual leave entitlement

Generally, an employee who works a forty (40) hour week is entitled to one hundred and ninety-two (192) hours of paid annual leave every year. This entitlement may increase if there are any public holidays which fall on the weekend, as these are added to the standard hours. Also, annual leave is calculated on a pro rata basis for those employees working less than the average weekly working time of forty (40) hours, as well as those employees who worked for less than twelve (12) months.

Any collective agreement and/or other agreement which would have been entered into between the employer and the employee and which offers more favourable hours of annual leave is permitted by law. However, no agreement can allow less favourable hours of annual leave.

According to the law, paid leave is availed of by the employee only on those days which were agreed upon between the employer and employee. This denotes that notwithstanding the fact that annual leave is a right granted by law to the employee, the employer must provide his consent for an employee to be permitted to utilise their leave. However, consent cannot be unreasonably withheld by the employer, therefore valid and reasonable grounds for unavailing of leave must be provided. Mutual consensus among the parties is a common feature for various employment conditions and this instils a stronger relationship between the parties and better communication.

Carrying over of Annual leave

Employees should ensure to avail of their annual leave entitlement each year, since they cannot claim payment for any leave not utilised, unless there exists a written agreement between the employee and the employer stating otherwise. Moreover, in the absence of any written agreement, leave may not be carried forward to the following year. On the other hand, should there be a written agreement in place, it is only possible for the employee to carry over up to fifty per cent (50%) of the annual leave entitlement to the following year. This may only happen once and cannot be carried forward again.

The law does not dictate the minimum amount of leave that must be utilized by the employee in that calendar year, yet it states that out of this paid annual leave entitlement, a minimum period equivalent to four (4) weeks cannot be replaced by an allowance in lieu, except where the employment relationship is terminated. Thus, the remaining one hundred and fifty-two (152) hours of annual leave (one hundred and ninety-two (192) hours less forty (40) hours) must be utilized within that calendar year.

Cancellation of Leave, Shutdown and Forced Leave

For the same reason that leave is applied for by the employee, and confirmed by the employer, after it is agreed upon, annual leave may also be cancelled. This can only be done if both the employer and employee are in agreement, and therefore the employee cannot unilaterally and spontaneously decide to cancel their already-planned leave. This safeguards the employer’s interest of the demand of work, and guarantees that the workload is not put aside.

Secondly, as stipulated in the law, in any case of a bridge holiday or longer period of shutdown, the employer can only utilise up to twelve (12) working days, or their equivalent in hours, of annual leave, for the purpose of any shutdown of the premises or offices of staff members. Thus, the employer cannot force the employee to use more than twelve (12) days from their annual leave simply for a shutdown period, such as during the Christmas period or August summer period. Moreover, any temporary closure of the premises of work must be properly communicated to every employee by the end of January every calendar year. This once again instils protection of the employee to be adequately informed on the overall working calendar year.

As for forced leave, the employer must also inform the employee, by providing them with a written statement within a reasonable time frame before the forced leave is about to run. The employer must also provide the employee with sufficient reasons to justify the forced leave. However, the law is silent on what is considered a reasonable time to inform the employee on any forced leave and what is meant by sufficient reasons for its justification by the employer. Here, it is crucial that no abuse by the employer overrules this provision. Moreover, utilising forced leave will not give rise to a civil debt in favour of the employer if this leave exceeds the annual leave of the employee. However, the civil debt in favour of the employer can arise when:

  1. the forced leave taken by the employee was requested by the employee himself;
  2. the forced leave exceeds the annual leave entitlement; and
  3. only upon the termination of the employee’s employment.

These factors are cumulative, and they apply notwithstanding anything referred to in the law.

Special Provisions on Annual leave

The law also provides for certain special rules when it comes to annual leave entitlement and other leave periods, such as maternity leave, sick leave and injury leave.

Although an employee is during her period of maternity leave, in terms of the Protection of Maternity (Employment) Regulations (S.L.452.91), annual leave still continues to accrue in her favour. Hence, a female pregnant employee cannot be removed from the right to take annual leave, even during her maternity leave. An added protection is afforded to the employee in that the law says that the amount of annual leave which was unavailed of by the end of the calendar year is automatically transferred to the next calendar year. This is when the employee could not avail herself of such annual leave during that same year when her maternity leave commenced.

The same applies for when annual leave continues to accrue in favour of that employee who is on sick leave or injury leave. Similarly, that unavailed annual leave is automatically transferred to the next calendar year if the employee shows that it was not possible for the employee to avail himself of this leave beforehand.

The second benefit the law offers in this regard is that should any public holiday or national holiday fall during the period of the employee’s maternity leave, she automatically is entitled to those additional days of annual leave.

The law also tackles periods of pre-arranged leave. If such leave coincides with a period of maternity, sickness or injury leave, then it is presumed that the pre-arranged leave was not availed of and will be availed of when the employee returns from work or the subsequent year if it could not be utilised during that same year.

Conclusion It goes without saying that using annual leave regularly during a calendar year increases the productivity at the workplace upon the employee’s return from their time-off. Severe health complications become a lesser risk, and taking a break from work overall reduces the demands and stresses of working life, which means that you will be healthier when you return to work. Any employee should utilise the time to detach from the nature of urgency and deadlines that any form of work brings, in turn allowing one to rejuvenate their mind and reboot their system.