Employment Contracts

The Maltese workforce is commonly divided into two main categories: employed individuals and self-employed individuals.

The Employment and Industrial Relations Act (EIRA), Chapter 452 of the Laws of Malta, defines an employee as

“any person who has entered into or works under a contract of service, or any person who has undertaken personally to execute any work or service for, and under the immediate direction and control of another person, including an outworker but excluding work or service performed in a professional capacity or as a contractor for another person when such work or service is not regulated by a specific contract of service”.

Any person engaged under an employment contract is therefore an employee.

In turn, employees may be classified into three categories:

• full-time workers,
• full-time workers on reduced hours
• part-time workers (including casual workers).

Under Maltese law, an employee is generally a ‘full-timer’ if such person works an average of 40 hours a week. Part-timers are employees who work less than full-timers and who are entitled to pro rata benefits, calculations and payments. Part-timers must not be treated less favourably than full-time workers simply because they are part-timers.

The employment relationship in Malta assumes the existence of an agreement, whether such agreement is written or verbal.

The terms of a contract of employment will vary depending on the type of employment relationship which exists, whether for an indefinite period, a definite (fixed-term) period or the completion of a project.

Each type of contract must satisfy certain conditions and is subject to varying rules mainly in relation to termination of such employment and the consequences of same.

Specific legal rules also exist to regulate the conditions and limitations of the use of definite (fixed-term) contracts (and their possible automatic conversion into indefinite-term contracts), and the use of part-time employment.

While employment contracts in Malta will generally be governed by the Laws of Malta, it is also possible, at times for such contracts to be governed by a foreign law. However, attention needs to be made to overriding rule of law and public policy, and advice must be sought on a case by case basis.

Maltese law defines a zero-hour contract as

“a contract of employment or other work arrangement under which a worker is required to be available for work or services and  when needed  by  the employer, and where the employer promises payment on the basis of hours so worked  without guaranteeing a minimum number of hours to the worker”.

Zero-hour contracts are prohibited under Maltese law except:

• where the nature of the activity concerned requires the availability of replacement workers on short notice; and as long as the zero-hour contract is not the whole-time employment of the worker; or
• where the worker is a full-time student. (However, if a person is a full-time student, and also a full-time worker, the status of a full-time worker shall prevail).

The burden of proving that any one of the above exceptions exists and, that therefore zero-hour contracts may be entered into by an employer, rests on the employer.

Whilst an employer is not legally bound to provide an employee with a fully-fledged employment contract, in terms of the Transparent and Predictable Working Conditions Regulations employers must necessarily provide employees, in writing, with certain information either within seven calendar days from the first working day of the employee or within a month depending on the information being provided.

The following information must be provided to the employee by the employer:

• Details on the name, registration number and registered place of business of the employer and, valid ID, gender and address of the employee and the place of work (if there is no fixed place of work, the employer must state that the employee will be employed at various places, and include the registered place of business; if there is no registered place of business, the domicile of the employer is to be stated);
• Title/Grade/Nature/Category of work that the employee is employed in;
• Brief description of employee’s work or specification;
• Date of commencement of contract;
• End date or expected duration (for fixed term contracts);
• Identity of user undertakings when known (for temporary agency workers);
• Duration and conditions of probation;
• Training entitlement provided by employer (if any);
• Amount of all paid leave to which the employee is entitled including, but not limited to: vacation, sick, injury, parental, paternal, maternity, carer’s, marriage, bereavement, quarantine, jury service and urgent family leave;
• Procedure observed by employer and employee for termination of employment – including notice periods, length and method for termination;
• Remuneration – basic amount of pay, any other component elements indicated separately, frequency and method of payment of wages, conditions of fines and quantum of fines which may be imposed by employer if applicable;
• If work pattern is mostly or entirely predictable – the length of the standard working day or week, arrangements for overtime and its renumeration and shift work, if applicable;
• If work pattern is unpredictable – the employer must inform the employee (i) that the work schedule is variable and of the number of guaranteed paid hours and the remuneration for work performed in addition to those guaranteed hours, (ii) of the reference hours and days that the employee may be required to work, (iii) of the minimum notice period that employee is entitled to before start of work assignment and any deadline for the cancellation of the work assignment, if applicable;
• Existence of collective agreements affecting the employee’s conditions of work, if any;
• The identity of social security institutions that are receiving the social contributions attached to the contract of employment and any protection provided by employer regarding this;
• Any other relevant condition of employment.

Further rules also apply in the case of outworkers.