Redundancies under Maltese Law

When terminating on grounds of redundancy, an employer must always follow the last in, first out rule. Thus, the last person engaged within a class of employees affected by the redundancy should be the first to be made redundant.

A class of employees is defined by law as the work performed or expected to be performed independently of the title or name given to the post in situations where there is no collective agreement in place. This means that an employer must differentiate between the staff based on the tasks they perform in practice in order to categorise the employees into classes.

If in a few months, the situation improves to the extent that there are job openings within a company, an employee who has been terminated on grounds of redundancy is entitled to re-employment should the same post become available again within one year. When re-employed, employment conditions must be as favourable as they were prior to redundancy and the employee shall be deemed by law to have continued in his employment notwithstanding the termination.

What happens if several employees are made redundant over a short period of time?

The law defines a collective redundancy as being the termination of employment on grounds of redundancy, over a period of thirty days of:

• 10 or more employees in establishments normally employing more than 20 but less than 100 employees;
• 10% or more of the employees in establishments employing over 100 employees but less than 300 employees; and
• 30 employees or more in establishments employing 300 employees or more.

In these situations, there must be a representative to represent the employees in negotiations with the employer. The employees’ representative is defined by law to mean the recognized union representative provided that where there exists no recognised union, it shall mean the representative duly elected from non-unionised employees through a secret ballot organised by the employer.

In cases of a collective redundancy, the employer must thus:

1. Notify the employees’ representative of the proposed redundancies and allow such representative the opportunity to consult with the employer;
2. Ensure that the consultations begin within 7 working days from notification of proposed redundancies and focus on the ways to avoid the collective redundancies or the possibility of reducing the number of employees affected by the redundancies; and
3. Provide the employees’ representative and the Director responsible for Employment and Industrial Relations with a written statement providing all the details related to the redundancies.

The notice of termination of employment may begin to run from the date when the consultations between the employer and the employees’ representative are concluded and any projected collective redundancies may only take effect on the lapse of thirty days from the notification sent to the Director responsible for Employment and Industrial Relations. Such period of time may be reduced in exceptional circumstances or extended by a further thirty days where it appears to the Director that an extension may provide for further opportunity to resolve the reasons for the redundancies being made.

The above is not to be construed as legal advice and only sets out our general views which may change when assessing specific circumstances.

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