Termination of Employment


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TERMINATION OF EMPLOYMENT
​​Description
​The rights of employees upon termination of employment.​

Questions

Answers

If an employee feels that s/he was unjustly terminated from employment what are his/her rights?

An employee who alleges unfair dismissal can lodge a complaint to the Industrial Tribunal within four months from the termination of employment.

If a worker’s employment is terminated due to redundancy, can the employer engage another person to do the same work?

The employer is under a legal obligation to re-engage an employee previously terminated on the basis of redundancy if the post formerly occupied by him/her becomes available within a period of one year from the date of termination. If the employer breaches this legal obligation, the employee can initiate proceedings before the Industrial Tribunal within four months from the said breach.

What is an employee entitled to on termination of employment?

Without prejudice to what may be due in respect of notice, the employee is entitled to be paid on a proportional basis according to the period of employment, for all outstanding wages, overtime, leave, bonuses etc, due to him/her as at date of termination.

Notice Period
Description
Notice Period applicable in case of termination of employment.​

Questions

​Answers

​What is the duration of the notice period? ​The duration of the notice period depends on the employee’s continuous length of service in the same employment:

• More than one month and up to six months  - one week

• More than six months and up to two years  -   two weeks

• More than two years and up to four years  -   four weeks

 • More than four years and up to seven years  -  eight weeks

 • More than seven years and up to eight years  -  nine weeks

 • More than eight years and up to nine years  -  ten weeks

 • More than nine years and up to ten years  -   eleven weeks

 •More than ten years  -  twelve weeks

In the case of technical, administrative, executive or managerial posts longer periods may be agreed by the employer and employee. However, if the employment is terminated during its probationary period, only one week notice applies, given that the employee has been in employment for more than one month.

On receiving notice from the employer, can the employee cease to perform work?

If the employee chooses to cease performing work on receiving notice from the employer, the employer is obliged to pay the employee a sum equal to half the wages that would be payable in respect of the unexpired period of notice.

Can the employer terminate an employment on grounds of redundancy and not allow the employee to work his/her due notice?

If the employee is not given the chance to work the notice, the employer would be obliged to pay the employee a sum equal to full wages that would be payable in respect of the unexpired period of notice. 

When the employee gives notice, can s/he cease to perform work?

If after giving notice, the employee fails to work during the notice period, s/he will be obliged to pay his/her employer a sum equal to half the wages that would be payable in respect of the unexpired period of notice.

When the employee gives notice and the employer does not allow him/her to work the notice, is the employee entitled to any compensation?

If the employee chooses to continue performing work until the period of notice expires but the employer precludes him/her from so doing, the employer would be obliged to pay the employee a sum equal to the full wages that would be payable in respect of the unexpired period of notice. 

What happens if an employee abandons his/her employment without giving notice?

If the employee fails to give notice s/he shall be liable to pay to the employer a sum equal to half the wages that would be payable in respect of the period of notice that is not worked.

Are there situations when an employment can be terminated without giving notice?

An employment can be terminated without notice or obligation to compensate for notice when the length of service is not longer than one month, or when there is a good and sufficient cause (eg. disciplinary action, health reasons etc.)

Settlement of outstanding wages
Description
The Wage entitlements of employees when in-employment and also upon termination of their employment.

Questions

Answers

If an employee is terminated from employment, when should the final payments be settled?

All outstanding wages should be settled by the next pay date following the termination of employment.

If an employee is not paid in part or in full the wage, how can this issue be settled?

An employee who is not paid for his/her work or does not receive his/her wage on time must first bring this to the attention of his employer. If the employer persists in not issuing the payment due, the employee can report the matter to the Department of Industrial and Employment Relations for action from its end.

What documents are required to open a claim with the Department of Industrial and Employment Relations?

On forwarding a claim to the Department to recover any payments due by the employer, the employee is to provide any documents which are of relevace to his/her case, mainly:

  • copies of the engagement and termination forms (if applicable) issued by Jobsplus.
  • contract of employment/letter of appointment / statement by the employer.
  • payslips.
  • FS3.
  • proof of payment (bank transfers, cheque statements).
  • Working Hours.
  • vacation and sick leave records.
  • Full & final settlements of wages.
  • Email or any other form of correspondence with employer.
  • any other documents related to that particular period of employment.​

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Termination of Employment - Fixed Term Contract
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Description​ ​​ ​​ ​
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Entitlements and obligations of parties in a fixed-term contract upon termination of employment.​​ ​​ ​​ ​

Questions

Answers

What are the obligations at law when a fixed term contract is terminated before its due expiry date?

Where there is no justified reason to terminate an employment that is on definite basis, after the probationary period has passed, the party who breaches the contract is liable to pay the other party a sum equal to half the full wages that would have accrued had the contract of employment remained in force.

Should notice be given when terminating a fixed term (definite) contract of employment?

Notice is not applicable when the contract is for a definite time. However, if the contract is terminated during its probationary period, one week notice applies, given that the employee has been in employment for more than one month.

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Guarantee Fund​​ ​​
Description
​A fund intended to guarantee payment of unpaid wages, when an employer becomes insolvent.

Questions

Answers

What is the Guarantee Fund?

It is a fund intended to guarantee payment of unpaid wages (please refer to Question 5) due by an employer to those employees whose employment is terminated because of the employer’s proved insolvency. This Fund is administered by the Guarantee Fund Administration Board.

What is insolvency for the purposes of the Guarantee Fund?

For the purposes of the Guarantee Fund, an employer shall be deemed to be in a state of insolvency:

(i)    where a request has been made for the commencement of proceedings for bankruptcy of the employer under Part III of the Commercial Code and the Court has established that the employer’s undertaking or business has been definitely closed down, and that the available assets are insufficient to cover the payment of the claim, or

(ii)    where the Court has either appointed a provisional liquidator or administrator, or a liquidator after a winding up order in terms of the Companies Act.

(b)   The date wherein an employer shall be considered to be insolvent shall be the earlier of the date:

(i)   of adjudication of bankruptcy by the Court; or

(ii) when a liquidator is appointed in accordance with the Companies Act.

Who is entitled to present a claim to the Guarantee Fund?

All employees’ whose employers company is in a state of Insolvency except employees who are:

(a)     private domestic servants;

(b)     share-fishermen; and

an employee who, on his or her own or together with his or her parents, spouse, children or siblings, was the owner or part owner of the employer’s undertaking or business and had a considerable influence on its activities.

How can  an employee make  a claim to the Guarantee Fund?

An employee can make a valid claim for unpaid wages by sending the following document:

(i) a valid claim for unpaid wages to the Guarantee Fund Administration Board;

(ii) certified evidence that he/she has registered a valid claim for unpaid wages in the insolvency proceedings of the employer; and

(iii) certified evidence that he/she has registered a valid claim for unpaid wages with the Department for Industrial and Employment Relations 

to the Guarantee Fund Administration Board within two months from the onset of the insolvency of the employer to:

​ 

The Chairman

Guarantee Fund Administration Board

c/o 121, Melita Street

Valletta

What can the employee claim?

(a) Every individual employee may register a claim limited to the unpaid amounts due for:

(i) unpaid wages, which shall consist of the basic wage for the relevant unpaid period;

(ii) any unpaid overtime;

(iii) arrears for any leave entitlement for the current and preceding calendar year, and

(iv) any notice money due in accordance with the laws of Malta;

(b) The claim registered by every individual employee shall refer to unpaid amounts which were due for wages payable within six months preceding the date of the onset of insolvency of the employer or preceding the termination of employment.

(c)  Amounts paid by the Guarantee Fund shall in no case exceed a sum which is equivalent to thirteen weeks’ national minimum wage payable at the time of the termination of employment of such employee.

What is the procedure adopted following the employee’s claim?

The documentation given by the employee would be forwarded to the Administration Board along with the claim, so that the Administration Board, can reach a decision as to the validity of the claim being presented. The Administration Board may request any information from any person to enable it to perform its obligations, and it shall be the duty of any such person to cooperate fully with the Administration Board.

What are the duties of the employee who benefits from the Guarantee Fund?

The employee binds himself to reimburse the Fund with a sum equivalent to the amount paid out of the Fund by the Administration Board in respect of the claim made by the employee from any amounts retrieved from any court proceedings or from any settlement received from a liquidator, as the case may be.

What happens if an employee lodges a false claim?

Any person who is found guilty of registering a false claim for unpaid amounts or who is found guilty of acting in collusion with an employer or an employee in order to obtain payments from the Fund, shall be guilty of an offence and shall be liable on conviction to a fine (multa) which is equivalent to ten times the amount paid out of the Fund, together with any other punishment to which the offender shall be liable according to any other applicable law.

​CONTACT INFORMATION:

 Contact Name

Department for Industrial and Employment Relations 
121, Melita​​ Street,
Valletta - Malta 
VLT 1121
View map​
 Tele​phone​
(+356) 21224245/6​​

 Email