The most notable legislative sources include the Constitution of Malta, the Employment and Industrial Relations Act (EIRA), the Employment Commission Act, the Employment and Training Services Act and EU Regulations and Directives.
Regulations made under the EIRA include Wage Regulation Orders which represent administrative regulations which regulate certain conditions of employment for specific sectors. At present, there are 31 different WROs in force.
There are several key areas to be aware of within the Maltese employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.
Maltese Labour Law is essentially based on the contractual agreement between employer and employee, provided that the statutory conditions of employment are respected. Thus, whereas certain conditions of employment are strictly regulated as a matter of law, other conditions are left entirely up to the parties to agree upon, as long as these are also considered to be objectively reasonable.
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, namely:
Contracts of employment may be signed for a fixed term or for an indefinite term. A fixed term contract can be successively renewed up to a maximum period of 4 years after which the employee is considered to be under a contract of indefinite duration.
The exception occurs when the employer has justifiable reasons for retaining the employee on a fixed term contract. An employee whose fixed term contract has expired and is retained in employment will also be considered to be under an indefinite contract if the employer does not produce a new contract of service within 12 days following the expiry of the previous contract.
|Medical Leave ?||
The amount of sick leave varies substantially according to the relevant Wage Regulation Order that regulates the specific sector of industry. Where the type of activity of work is not regulated by any W.R.O., the sick leave entitlement of an employee amounts to two working weeks per year (calculated in hours). In occasions of sickness, a medical certificate has to be presented to the employer.
If the absence from work is not covered by a medical certificate, other arrangements (like applying for leave) have to be sought. The employer is only required to issue wages for the amount of sick leave entitlement provided by law. If an employee remains sick after having exhausted all the sick leave entitlement, s/he will only continue to receive the Sickness benefit from the Social Security to which s/he may be entitled.
|Termination of Employment ?||
Dismissal and the rights and obligations of the respective parties are matters which are subject to very strict regulation.
The Employer may only terminate a contract of employment on the basis of:
The employee, on the other hand, is free to terminate employment of employment of an indefinite term without assigning any reason.
Where the employer or employee are terminating a contract of employment of an indefinite term, the advance notice to be given by the terminating party to the other party is calculated according to the period for which the employee has been in the employment of the same employer continuously.
Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Malta. For companies, which intend to employ their staff directly through their incorporated Maltese entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Malta.
As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Malta.
The Shield GEO solution is an attractive alternative where
– the company is looking to employ staff quickly
– the company doesn’t have an appropriately incorporated entity in Malta
– the company wants to work within a defined budget
– the company wants to limit its initial commitment in Malta
– the company needs help with tax, employment, immigration and payroll compliance in Malta
Shield GEO can contract directly with the company to employ and payroll their staff in Malta. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits. Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.
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