Contracts of Employment

Related Legislation:

Part V Article 33 – 42 of the Employment and Industrial Relations Act, 2002, Chapter 452 of the Laws of Malta
L.N. 431 of 2002, Information to Employees Regulations, 2002

1. Are contracts of employment obligatory for all employees?

Contracts of employment are not obligatory. Nevertheless Article 4 of LN 431 of 2002 states that in those cases where no contract of employment has been signed between the employer and the employee, and, or in those cases where a written contract does not cover all or some of the information required to be notified to the employee by these Regulations, the employer shall be bound to give or send to the employee a letter of engagement or a signed statement. The statement should include the basic conditions of employment stipulated in the Legal Notice, and should be given to the employee by not later than eight working days from the commencement of employment.

2. Can a contract of employment include confidentiality clauses with penalties?

According to LN 431 of 2002, it would be advisable to inform the Director of Employment and Industrial Relations of such penalty.

3. Can conditions of employment change once there is a contract of employment?

The conditions of employment can be changed by mutual agreement or due to statutory requirement.

4. What is the minimum/obligatory information that has to be included in a contract of employment?

There are minimum requirements established by the Legal Notice including the name, registration number and registered place of business of the employer and the identity card number, sex and address of the employee and the place of work as well as

1. the date of commencement of employment
2. the period of probation
3. normal rates of wages payable
4. the overtime rates of wages payable
5. the normal hours of work
6. the periodicity of wage payments
7. in the case of a fixed term contract of employment, the expected or agreed duration of the contract period
8. the paid holidays, and the vacation, sick and other leave to which the employee is entitle
9. the conditions under which fines may be imposed by the employer
10. the title, grade, nature or category of the work for which the employee is employed
11. the notice periods to be observed by the employer and the employee should it be the case
12. the collective agreement, if any, governing the employee’s conditions of work and
13. any other relevant or applicable condition of employment

Provided that if any of the above information is regulated by any law, regulation, national standard order, sectoral regulation order or collective agreement, the information may, where appropriate, be given in the form of a reference to the laws, regulations, orders or collective agreements governing that same agreement.

5. Does a collective agreement supercede a contract of employment?

Insofar as the conditions of employment are agreed to by both parties, within the ambit of the law and are more favourable to the employee, the collective agreement supercedes a contract of employment.

6. Can a non-unionised employee with a contract of employment refuse to accept the conditions of a collective agreement?

If the employee happens to fall in a category governed by the collective agreement then it applies to that employee irrespective of whether the employee is unionised or not.

7. Is there a procedure to change conditions of a contract of employment?

Article 42 of the EIRA stipulates that where conditions are less favourable than those stipulated in the Act, then this must be put down in writing and the Director of Employment and Industrial Relations must be informed.

8. Should a job description be a part of a contract of employment?

The employer is not obliged to do so but it is advisable to include it so that the employee knows exactly what is expected of him/her and so as to avoid any misunderstandings. The job description should be drafted in such a way so as to afford the employer flexibility in assigning duties.

9. Should bonus schemes be a part of a contract of employment?

The bonus scheme may or may not be included in the contract of employment. In any case it should have a time frame.

10. Can a contract of employment include conditions that are different than the legal minimum?

This is permissible only if the conditions are more favourable to the employee. Otherwise the employee can contest their validity.

However, Article 42 of the EIRA does allow for inferior conditions but only ‘in exceptional cases… a temporary measure to avoid redundancies’. In such cases there must be approval by the Director of Employment and Industrial Relations and such approval is reviewed every four weeks.

11. Is a contract of employment made with a company employee acting on behalf of a company, binding?

If the employee has the juridical requirements and is authorized by the company, it is binding even if the authorized person is no longer in the company’s employment.

12. Can hours of work (e.g. shifts) stipulated in a contract of employment be changed unilaterally?

If the company reserves the right to change the working hours and the exigencies of the company warrants a change, then they can be changed after due notice is given. Care must be given to include a wording in the contract of employment to allow for changes in hours of work to avoid problems.

13. In cases of promotion, does a new contract of employment have to be issued?

It is advisable so as to include the new conditions of employment especially the job description to avoid any misunderstandings.

14. If a new contract is issued, does it necessarily imply that there is, in fact, a fresh employment?

Provided that there is no six month break between one contract of employment and another, then it is deemed to be a continuation of employment. If there is a break of any duration, ETC termination and engagement forms have to be filled in. But for purposes of employment continuity it will still be regarded as continuous employment if the break is less than six months.

Therefore a new contract issued for purposes, say, of promotion or reassignment of duties, does not necessarily imply fresh employment. In such cases no notice period is due, neither is the probationary period applicable if probation had been completed successfully in the previous position. In fact employers can impose a trial period but not a probationary period in the new post if there is a continuation of employment.

15. Does a properly filled ETC engagement form substitute a contract of employment?

The purpose of the ETC form is to inform the authorities of labour movements and not to act as a contract of employment. The ETC does not satisfy the requirements laid in L.N. 431 of 2002.