Employment and Industrial Relations Law

Terms and Conditions of Employment – GVZH Advocates’ contribution to the ICLG to Employment & Labour Law 2013 Edition

05 May 2013

10 min read

Terms and Conditions of Employment

What are the main sources of employment law?

The Employment and Industrial Relations Act – Chap 452 of the Laws of Malta (EIRA) represents Malta’s primary source of employment law, including conditions of employment, protection against discrimination and industrial relations. This statute was enacted in 2002 with a view towards consolidating the previous primary sources of employment law namely the Conditions of Employment (Regulation) Act (Chap. 135 of the Laws of Malta) and the Industrial Relations Act (Chap 266 of the Laws of Malta).

There are a number of regulations made under the EIRA, the majority of which serve to implement EU regulations and directives, fleshing out the basic legal framework provided by the EIRA. The conditions of employment of many industry-specific sectors are regulated by “Wage Regulation Orders” serve to supplement the EIRA and which represent administrative regulations regulating certain conditions of employment for specific sectors, such as for example professional offices and wholesale and retail trades.  The conditions specified in these Orders include inter alia maximum hours of work, minimum wages, overtime rates, sick leave and special leave. At present, there are 31 different Wage Regulation Orders in force.

Members of the public service have their conditions of employment regulated by means of the Public Service Management Code or “PSMC” which was introduced in 2002 to replace the EstaCode. This code falls within the competence of the Management and Personnel Office (the former Establishments Division) within the Office of the Prime Minister.

What types of worker are protected by employment law? How are different types of worker distinguished?

All employees are covered by the EIRA and consequently all workers. We may classify workers to be either employed or self-employed.  Workers may either work whole time, part time or whole time with reduced hours.

Employed workers/employees are defined as persons who have entered or work under a contract of service under the immediate direction and control of another person or company.

Self-employed workers are those who perform work on their own account for more than one person or company.

The Employment Status National Standard Order (S.L. 452.108), has provided for a test in order to verify whether the relationship between an employer and employee is an employment one or one of consultancy (self-employment). If at least five of the following criteria are satisfied in relation to the person performing the work, the relationship is one of employment:

  1. he depends on one single person for whom the service is provided for at least 75% of his income over a period of one year;
  2. he depends on the person for whom the service is provided to determine what work is to be done and where and how the assigned work is to be carried out;
  3. he performs the work using equipment, tools or materials provided by the person for whom the service is provided;
  4. he is subject to a working time schedule or minimum work periods established by the person for whom the service is provided;
  5. he cannot sub-contract his work to other individuals to substitute himself when carrying out work;
  6. he is integrated in the structure of the production process, the work organisation or the company’s or other organisation’s hierarchy;
  7. the person’s activity is a core element in the organization and pursuit of the objectives of the person for whom the service is provided; and
  8. he carries out similar tasks to existing employees, or, in the case when work is outsourced, he performs tasks similar to those formerly undertaken by employees.

Whole time employees are those who work a minimum of a 40 hour week and their employment is the principal employment.

Whole-time employees with reduced hours are defined as whole-time employees who, in agreement with their employer, work for less than 40 hours, provided that such employment is the principal employment of the employee in respect of which social security contributions are payable.

Part-time employees are defined as employees whose normal hours of work, calculated on a weekly basis or on an average over a period of employment of up to one year, are less than the normal hours of work of a comparable whole-time employee. Part-time employees are therefore those that work less than a 40 hour week.

There is no significant distinction between whole-time employees with reduced hours and part time employees, since it is clear that if the employment is the principal employment, employees get pro rata benefits.  When determining whether an employee is a part time employee or a whole time employee with reduced hours, one must only establish if the employment is the sole employment of the employee. If the employee has more than one employment, the employee shall be deemed to be a part time employee.

Do contracts of employment have to be in writing? If not, do employees have to be provided with specific information in writing?

In accordance with the Information to Employees Regulations (Subsidiary Legislation 452.83) if the period of employment exceeds one month and the employee’s working hours exceed eight hours per week, the employer is bound to give the employee within 8 working days from the commencement of employment, either (i) a written contract of employment, or (ii) a written statement of minimum conditions, which must be furnished to the employee. Such information is expected to include such basic information such as the normal rates of pay, overtime rates, hours of work, place of work and leave entitlement. Wages should be paid at regular intervals not exceeding 4 weeks in arrears. Different periods of pay can be agreed in a collective agreement.

Practice is for employees to be given a contract prior to the commencement of work.

Are any terms implied into contracts of employment?

Under Maltese law the default probationary period is 6 months and in the case that probation is not specifically excluded from the period of employment, the 6 month period will apply.

Are any minimum employment terms and conditions set down by law that employers have to observe?

The minimum conditions in terms of Maltese law which have to be observed by employers are as follows:

Hours of Work – The maximum average weekly working time must not exceed 48 hours over a 7-day period, unless otherwise agreed between the employee and the employer.  A standard working week is of 40 hours, whilst an additional 8 hours represent overtime.

Night Work – A night worker’s normal hours of work must not exceed an average of 8 hours in any 24-hour period.

Minimum Daily Rest – A worker is entitled to a minimum daily rest of 11 consecutive hours per 24-hour period during which the worker performs work for his employer.

Rest Breaks – Where a working day is longer than six hours, employee is entitled to an uninterrupted rest break of at least 15 minutes.

Minimum Weekly Rest – A worker is entitled to an uninterrupted weekly rest of 24 hours in each 7-day period during which the worker works for his employer.

Vacation Leave with Full Pay – A worker is entitled to vacation leave of four working weeks and four working days (24 days, based on a 40-hour working week).  The annual leave of employees that work less than 40 hours is calculated pro rata. If the employee is employed for less than 12 months, vacation leave is calculated pro rata.

National Holidays and Public Holidays – Every whole-time employee shall be entitled to the national holidays and to all public holidays with full pay (save for the national and public holidays which fall on a weekend).

Maternity Leave – A pregnant employee may apply for maternity leave for an uninterrupted period of fourteen weeks and this uninterrupted period may increase to eighteen weeks upon request by the employee. An employee on maternity leave shall be entitled to the first fourteen weeks of maternity leave with full wages but if the employee chooses to avail herself of any additional maternity leave beyond the fourteen weeks, the employer shall not be obliged to pay any wages for those weeks of maternity leave which go beyond the aforementioned fourteen weeks, without prejudice to any relevant benefit in respect of any period of maternity leave which goes beyond fourteen weeks in terms of the Social Security Act to which the employee may be entitled if she chooses to avail herself of maternity leave beyond the paid fourteen weeks

Sick Leave – The amount of sick leave varies according to the relevant sector of industry.  The applicable amount of sick leave entitlement is provided in the relevant Wage Regulation Order that regulates the specific sector or where the sector is not covered by a Wage Regulation Order, employees are entitled to sick leave, of two working weeks as sick leave in every calendar year without loss of wages (calculated in hours).

Urgent Family Leave – 15 hours per annum with full pay-deductible from vacation leave entitlement may be availed of.

Special Leave – Every employee is entitled to the following minimum periods of special leave, in addition to the vacation leave allowances:

  • 1 working day of bereavement leave;
  • 1 working day of birth leave;
  • 2 working days marriage leave;
  • up to 1 year of injury leave;
  • jury service leave for as long as necessary.

The abovementioned periods of ‘Special Leave’ may be different depending on whether the industry in question is regulated by a Wage Regulation Order.

To what extent are terms and conditions of employment agreed through collective bargaining? Does bargaining usually take place at company or industry level?

The EIRA provides for collective agreements to be negotiated between “an employer, or one or more organisations of employers, and one or more organisations of employees regarding conditions of employment in accordance with the provisions of any law in force in Malta”. In practice collective agreements are normally negotiated between a single employer and one or possibly two unions.

Collective bargaining in Malta takes place at company level at least in the private sector. Only the public sector normally negotiates common conditions across a range of workplaces. With no agreements at industry level in the private sector, the number of employees covered by collective bargaining is broadly in line with the number of employees who form part of a union.

Collective agreements bind the employer party to the agreement and the members of the trade union negotiating on the employees’ behalf. Individuals not belonging to the trade union in question may also agree to be governed by the terms of the collective agreement.

Collective agreements would include provisions relating to the normal rates of pay, overtime rates, hours of work, place of work and leave entitlement.

It is noteworthy that in Malta, pay increases are adjusted in accordance with the cost-of-living index and are implemented through national standard orders. Collective agreements would generally include the cost-of-living forecasts on which pay increases are based, and if the increase in the agreement is less than the cost-of-living adjustment, the pay must be increased by an additional amount to make up the difference.

The employment of workers who are not covered by collective agreements are covered by minimum conditions of employment set out in the Wage Regulation Orders.

Employee Representation and Industrial Relations


Maternity and Family Leave Rights

Business Sales

Termination of Employment

Protecting Business Interests Following Termination

Court Practice and Procedure