Employment and Industrial Relations Law

Termination of Employment on Grounds of Redundancy and Warrant of Prohibitory Injunction

31 Jul 2015

3 min read

The Civil Court has recently ordered Deutsch Bank not to terminate the employment of Ms Sandra Diacono, who had been made redundant. In 2007, Sandra Diacono was employed at Deutsch Bank in the position of Company Secretary.

In February 2014 – after she was orally informed of her redundancy – she decided to take legal action against Deutsche Bank Malta Ltd and Deutsche Holdings Malta Ltd, asking for the issuance of a warrant of prohibitory injunction aimed at preventing the same Company from dismissing her.

In this respect, she stated that there was no reason to make her redundant as:

  • her role has not been removed since she has been asked by the Company to remain “on call”;
  • the Company had never notified the Registry of Companies in Malta of her removal.

Ms Diacono also stated that the Company had proposed a settlement agreement whereby she would have waived her rights with respect to any potential claims against the Company.

The Company, on the other hand affirmed that:

  • Ms Diacono’s position had been made redundant in term of law;
  • the Civil Court had no jurisdiction in such a case as the Industrial Tribunal would have had exclusive jurisdiction on the same matter; and
  • therefore, Ms Diacono should have taken legal action before the Industrial Tribunal asking to be paid compensation for the alleged unfair dismissal.

The Civil Court, accepting Ms Diacono’s argument, had initially issued a warrant of prohibitory injunction stating that the termination of her employment based on grounds of redundancy was “datable and extremely dubious”. In this regard, the Civil Court took the following into consideration:

  • Deutsche Bank Malta Ltd and Deutsche Holdings Malta Ltd between them posted a profit of Eur 72million;
  • Ms Diacono has been asked to remain on call, although she has been informed that her position was made redundant;
  • Ms Diacono was still a signatory of the Company since – as the Civil Court has observed – the “Company was taking advantage of Ms Diacono’s name on official documents simply because of the law” considering that (i) it was mandatory for the Company’s Board to hold meetings in Malta and (ii) it was also necessary that such meetings had to be signed by the Chairman and the Company Secretary.

In view of this, the Civil Court has ordered the Company not to terminate the employment of Ms Diacono.

It is important to note that such a decision broke new ground as the Civil Court – in the past – has held that a warrant of prohibitory injunction should be considered as a procedural remedy of exceptional nature and should be issued only if the alleged damage may be remedied in another way and – in particular – if it could be remedied by the Court’s decision on the merit.

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