Proposed Amendments To Maltese Employment Legislation (currently suspended)

Posted on: 31 Oct 2018

Category: Articles, News

On the 10th of August 2018, four new Legal Notices designed to amend and introduce new employment laws in Malta were published in the Government Gazette.

Annual Leave National Standard Order, L.N. 271 of 2018

The principal scope of this Standard Order was to introduce new minimum requirements relating to the entitlement of paid annual leave, focussing inter alia, on annual leave entitlement during maternity, sickness and injury leave, whilst at the same time laying out restrictions on compulsory leave for shutdown and/ or bridge holidays.

These minimum requirements are applicable without prejudice to any provisions in collective agreements or other agreements entered into between employers and employees which are more favourable to employees.

Annual leave

As a matter of principle, the Standard Order provides that entitled paid annual leave be availed of on days agreed upon between the employer and employee.

As of the 1st of January 2019, unless otherwise agreed to in a collective agreement, employers will be restricted to utilize only up to the equivalent in hours of twelve (12) working days from the annual leave entitlement for the purposes of any type of shutdown, temporary closure of the premises for bridge holidays or any other compulsory leave. Furthermore, the Standing Order requires employers to communicate any type of shutdown or other compulsory leave to all their employees by the end of January of each calendar year.

Once leave from the annual leave entitlement of the employee has been agreed to by the employer and the employee, such leave cannot be cancelled unilaterally but can only be cancelled if both the employer and the employee are in agreement.

Leave during maternity, sickness and injury leave

Apart from laying out minimum requirements related to annual leave, the Standard Order crystallises principles which were established through landmark judgments, particularly those handed down by the EJC on maternity and sick leave vis-à-vis entitled annual leave.

The newly proposed Orders now provide that annual leave shall continue to accrue in favour of employees during the period of maternity leave and that any balance of annual leave unavailed of by the end of the calendar year shall be automatically transferred to the next calendar year when it has not been possible for the employee to avail herself of such leave during the same year when the maternity leave commenced, irrespective of the duration of the maternity leave entitlement. Furthermore, employees shall be entitled to the equivalent in hours of an additional day of annual leave for each public or national holiday falling on a day of work or on a weekly day or rest, not being a Saturday or a Sunday, which falls within the period of maternity leave of such employees.

Similarly, the Standing Order provides that annual leave shall continue to accrue in favour of employees during the period of sickness or injury leave and that any balance of annual leave unavailed of by the end of the calendar year shall be automatically transferred to the next calendar year when it has not been possible for the employee to avail himself of such leave during the same year when the sickness or injury leave commenced, irrespective of whether the sick or injury leave is fully paid, partially paid or unpaid.

Furthermore, any period of pre-arranged leave coinciding with a period of maternity, sickness or injury leave shall be considered as not having been availed of by the employee, and shall instead be availed of after the employee’s return to work or else be carried on to the subsequent year if such leave could not be availed of during the same year when the maternity, sickness or injury leave commenced.

Termination of employment

Pursuant to the above, the Standing Order further clarifies that where the employment relationship is terminated for whatever reason, the remaining balance of annual leave, including that annual leave which had accrued during a period of maternity leave, sickness or injury but which had not been availed of must be paid to the employee.

Temporary Agency Workers (Amendment) Regulations, L.N. 272 of 2018

The amendments made to this Regulation seek to address a prejudice which currently exists against temporary agency workers insofar as pay is concerned. In this respect, the Regulation will only allow disparity in the remuneration of temporary agency workers for the first four (4) weeks of their assignment, whatever its duration; thereby protecting the principle of equal pay for equal work between all workers, whether employed directly or otherwise.

Transfer of Business (Protection of Employment) (Amendment) Regulations, L.N. 273 of 2018

The amendments made to this Regulation are intended to further emphasise that the provisions of Article 38 of the Employment and Industrial Relations Act (“EIRA”), inter alia, those dealing with the implications of the transfer of business on the employees and those requiring transferees  to adhere to the terms and conditions agreed in any collective agreement between the employees and the transferor until the date of its termination or expiry, apply only in cases where the undertaking or business to be transferred is situated in Malta.

In addition, the amendments now clearly provide that the conditions of employment of the employees affected by the transfer of undertakings shall remain unchanged during any kind of negotiations leading to such a transfer.

Itemised Payslip Regulations, L.N. 274 of 2018

This new Regulation seeks to harmonize the information contained on the payslips handed to employees, before or on the date when the wages become due. In terms of this Regulation, payslips must now contain at least the following information:

  • the name of the employer and the employee;
  • the address of the employer;
  • the employee’s designation;
  • the total wages paid and the breakdown thereof and the period in respect of which the contents relate to;
  • the number of normal hours worked, including those worked on Sunday or on a public holiday when this is part of the scheduled normal hours;
  • the number of hours entitled at overtime or special rate broken down into those in excess of normal daily or weekly hours, hours worked on a Sunday or on a public holiday;
  • the number of hours of annual leave availed of and any remaining balance;
  • the number of hours of sick leave availed of during a calendar year;
  • the basic wages received;
  • a breakdown of any bonuses, allowances or commissions received; and
  • any deductions effected, including national insurance contributions, tax and others.

Following concerns raised by various unions and stakeholders, demanding that the Government suspends all of the four Legal Notices until they were properly discussed at the Employment Relations Board level, the Minister for Equality in a statement said that the Government was suspending the abovementioned four Legal Notices to allow for further discussions with the social partners.

Whatever the outcome of these discussions, employers should be aware that, whether through the already published Legal Notices or through others which will follow, the Government intends to implement changes to the current Maltese employment law which will inevitably affect them and their current employment procedures.

To find out more, please contact Mr. Patrick Gatt