Contract of Employment

According to Maltese legislation, the contractual agreement between employer and employee establishes the framework within which the relationship between the two parties is regulated, as long as the statutory conditions of employment are respected.

This provides for a flexible scenario where the parties are free to agree on most employment conditions, even though the basic elements are regulated by law.

This is also the case where collective agreements are concerned. Such an agreement is negotiated between and applied on the basis of a consensus reached by the employer and the respective trade union representing its members.

Contracts of employment may be entered into for a fixed term of for an indefinite term. A fixed term can be renewed up to a maximum period of four years, after which the employee shall start being considered to be under a contract of indefinite duration.

The probation period is usually of six months unless the parties agree to a shorter term. During the probation period, employment can be terminated by either party. No reason need be given, provided that at least 1-week’ notice of termination is given by the terminating party to the other party.

Dismissal

Dismissal Maltese law establishes three circumstances where an employer may terminate a contract of employment.

These include:

  1. The employer having a good and sufficient cause. It should be noted that this term has no statutory definition and is subject to interpretation by the industrial tribunal for each case of unfair dismissal brought before it, and is determined on a case by case basis;
  2. Redundancy, or
  3. The employee reaching retirement age.

An employer, intending to terminate the employment of an employee on the grounds of redundancy, is required to terminate the employment of that person who was engaged last in the class of employment affected by such redundancy. 

The employee, however, is free to terminate the employment of an indefinite term without appointing any specific reason.

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