Changing Conditions of Employment & Redundancies
1. Due to the impact COVID-19 has had on business can an employee’s conditions of employment be varied?
Article 42 of the Employment and Industrial Relations Act stipulates that in exceptional cases, the employer may provide for different conditions than those specified in the Act.
2. If the Director General of Industrial & Employment Relations grants authorisation for how long Is this valid?
Article 42 stipulates that the agreement is a temporary measure to avoid redundancies and needs to be reviewed every four weeks.
3. Does the employer need to inform employees or unions about any change in employment conditions?
Agreement has to reached with the employee or union representative.
4. Do employees have to agree with the changes?
Yes, unless the employees agree with the different conditions, the Director General will not grant authorisation.
5. What happens if employees do not agree with the changes?
In the eventuality that employees do not agree with the employers’ proposed changes to the conditions of employment, the employer would have to explore other options which could include making redundancies.
6. Can the employer enforce leave?
Yes, in accordance with Article 4A of the Annual Leave National Standard Order the employer can enforce leave.
7. How much leave can the employer enforce?
There is no limit on the number of days that can be forced however in this case an overutilization of leave does not give rise to a civil debt.
8. Is there a procedure that needs to be followed for the employer to force leave?
Article 4A specifies that the employer has to provide the employee with a written statement justifying why the employer is compelled to force leave before the leave starts. In the current crisis it is very evident why the employer needs to force leave.
9. Can an employer put employees on unpaid leave?
In accordance with Article 42 of the EIRA, the employer may only put employees on unpaid leave with their agreement.
10. Do benefits and entitlements continue accruing during unpaid leave?
During periods of unpaid leave no benefits and entitlements accrue.
11. (a) Does the employer pay his portion of N.I. during periods of unpaid leave?
National Insurance contributions are paid on earnings. Since during unpaid leave there are no earnings, then neither of the parties pays N.I.
(b) Is the wage supplement taxable and is NI deducted from it?
CFR has made it clear that the employer who is receiving the wage supplement to be passed on to the employee must include the wage supplement in the payroll and the employees’ portion of NI has to be deducted from it.
12.What if the establishment was closed down by government directive, does the company still need authorisation to put employees on unpaid leave?
In accordance with Article 42 of the EIRA, the employer may only put employees on unpaid leave with their agreement.
13.Can an employer make an employee redundant and replace the worker by someone with less favourable employment conditions than the previous employee?
No, the law is clear in saying that if the post is made available again within a period of one year, then there is the right of re-employment at conditions not less favourable than those previously enjoyed.
14. Is there any procedure that needs to be followed to make redundancies?
Malta has adopted the last in first out rule for redundancies in the same class of employment.
15. Does the Director General for Industrial and Employment Relations need to authorise redundancies?
If the redundancy is not a collective redundancy then no authorisation is required. In case of collective redundancy, the DG DIER has to be informed together with the employees’ information and consultation representatives. Any projected collective redundancies notified to the DIER shall only take effect on the lapse of thirty days after the said notification, provided that the DIER may, in exceptional circumstances, grant the employer a shorter period of notification:
“Collective redundancy” means the termination of the employment by an employer on grounds of redundancy, over a period of thirty days, of:
(a)ten or more employees in establishments normally employing more than twenty employees but less than one hundred employees;
(b)10% or more of the number of employees in establishments employing one hundred or more but less than three hundred employees; and
(c)thirty employees or more in establishments employing three hundred employees or more.
16. What is an employee who has been made redundant eligible for?
Unless in the employment contract, an employee handbook or a collective agreement the employer is obliged to grant the employee terminal benefits, the employee is only eligible for notice of termination of employment as per Article 36 of the EIRA.
17. Is the employer obliged to give notice to an employee who is being made redundant?
Yes, notice of termination of employment applies in the case of redundancies.
18. If an employee resigns does the employer still have to pay for notice?
If an employee resigns, then three scenarios are possible:
- If the employee resigns and it is the employee who does not want to work the notice then the employee has to pay the employer for half the notice not worked
- If it is the employer who does not want the employee to work the notice then the employer has to pay the employee the full notice
- The parties may mutually agree to waive the notice
19. Does the employer still have to pay for notice even if the company cannot afford it?
Yes.
