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Amendments to the Employment Laws

August saw the amendment of various existing employment laws and the introduction of new provisions therein. The government issued a number of legal notices in order to amend some of the Malta employment regulations, namely those on Vacation Leave, Transfer of Business, Temporary Workers and has also added a new legal notice on Payslips.

  1. Annual Leave National Standard Order, 2018.

LN 271 of 2018 (which repealed LN 38 of 1989 – Weekly Day of Rest and Annual Vacation leave Standard Order) lays down the minimum requirements to the current 200 hours of annual leave entitlement of every employee. Hence, any collective agreement or private employment agreement can stipulate different annual leave rules so long as such agreements are more favourable to the employee.

Any leave entitlement is to be used on days as agreed between the employer and the employee. As from the 1st January 2019, the maximum number of leave days for shutdown purposes shall be of 12 days annually, spread over summer, Christmas, bridge holidays, etc. Any type of shutdown, including a temporary closure of the premises by the employer, has to be communicated to employees by end of January of each calendar year. Once leave has been agreed upon, it can only be cancelled by agreement between the employer and employee.

Those employees of maternity leave, annual leave shall continue to accrue in the employee's favour. Any balance of annual leave which has not been availed 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 year when maternity leave commenced. If a public or national holiday falls on a day of work or on a weekly day of rest not being Saturday or Sunday, the employee on maternity leave shall be entitled to the equivalent in hours of an additional day of annual leave.

It has been now clarified that for employees on sick leave or injury leave, annual leave shall also continue to accrue in their favour. Any balance of annual leave un-availed 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 year when the sickness or injury leave commenced.

The legal notice further stipulates that any pre-arranged leave that coincides with a period of maternity, sickness or injury leave is to be considered as not having been availed of and shall be availed of upon the employee's return to work or shall be carried to the subsequent year if such leave could not be availed of during the same year when the maternity, sickness or injury leave commenced.

The employee will be entitled, upon termination of employment, for compensation of all un-availed of vacation leave accruing during a period of maternity leave, sick leave or injury leave.

Contravening these regulations is a criminal offence with a fine of €465, and the courts are now obliged to order the employer to give any leave entitlements to the employee or the equivalent in monetary compensation where the employment would have been terminated. 

  1. Temporary Agency Workers (Amendment) Regulations

The main amendment brought in terms of Legal Notice 272 of 2018 is in the definition of what constitutes an agency worker. The amendments are aimed at eliminating the distinction previously made seconded and placed employees. They clarify that the “equal pay for equal work” principle applies to all seconded and placed employees working at someone else’s work place (not only under their control). This means that all employees who are placed or seconded to other entities have to be paid at least as much as the employees of the entity with whom they are placed if such employees carry out the same or similar work.

  1. Transfer of Business (Protection of Employment) Regulations

The Transfer of Business (Protection of Employment) Regulations were also amended by means of Legal Notice 273 of 2018 and these regulations are aimed at tackling cross border transfers by stating that the regulations will only apply when the transferor (or seller/outsourcer) is in Malta. More importantly a new proviso has been included to make it clear that during consultation proceedings, the conditions of employment of the employees affected by the transfer shall remain unchanged.

  1. Itemised Payslip Regulations, 2018.

The Legal Notice 274 of 2018 brought into force new provisions regulating to payslips. The Regulations establish, under pain of criminal responsibility and sanction, that the employer must provide employees with an itemised payslip either before or on the date when the wages are due, which payslips need to contain all the information as prescribed by the Regulations. If two payslips relating to the same period are presented to the Director for the Employment and Industrial Relations Department or before a court of law, the payslip which prevails shall be that which is more favourable to the employee. Contravention of these Regulations can result in a fine ranging from €500 to €1,165.

The Regulation establishes that the payslip is to contain the following:

1.     Number of hours worked

2.     Overtime and extra hours worked

3.     Hours of sick leave taken

4.     Basic wages received

5.     Breakdown of bonuses, allowances or commissions

6.     Any lawful deductions made for tax, NI etc.