Resignation and notice periods

Related Legislation:

Article 36 of the Employment and Industrial Relations Act, 2002, Chapter 452 of the Laws of Malta

1. What is the duration of notice of termination of employment?

The duration of notice of termination of employment is specified in Article 36 of the EIRA as follows:

(a) for more than one month but not more than six months ……………….. one week;
(b) for more than six months but not more than two years …………………. two weeks;
(c) for more than two years but not more than four years ………………… four weeks;
(d) for more than four years but not more than seven years ………………. eight weeks;
(e) for more than seven years, an additional 1 week for every subsequent year of service up to a maximum of twelve weeks;
(f) or such longer periods as may be agreed by the employer and employee in the case of technical, administrative, executive or managerial posts.

2. Can a contract of employment include longer notice periods specified by the legislation?

Longer notice periods only apply in the case of executive, administrative, technical or managerial posts and if there is mutual agreement between the employer and the employee.

3. What happens if the employee expresses the wish not to work the full notice period?

The EIRA in section 36 contemplates various scenarios.

1. If the employer gives notice then the employee will have the option either to work the notice or not to. If the employee does work the notice period then he/she will be entitled to full wages. If the employee does not work the notice period then the employee shall be entitled to half the notice period.
2. If on the other hand the employee gives notice of termination of employment, the employer shall have the option either to allow the employee to work the notice or not to work the notice period. In either case the employee is entitled to full wages for the notice period.
3. If the employee fails to give notice to the employer then the employee shall have to pay the employer a sum equivalent to half the wages of the notice period.
4. If the employer fails to give notice then the employer shall have to pay the employee full wages for the notice period.
5. No notice period is due if the employee is being dismissed.

4. Do part timers have notice periods?

The law does not distinguish between part time and whole time employees. The regulations apply to all, even if it is not the principal employment of the part time employee.

5. Do notice periods apply in cases of definite period contracts of employment?

In the case of definite period contracts, notice periods only apply during the probationary period. Once the employee has been successful in completion of the probationary period and either party wants to rescind the contract then that party would have to pay half the wage/salary of the unexpired period.

6. Is the probationary period included in the calculation of the notice period?

Yes, the probationary period has to be calculated as well since employment is calculated from first day of employment. During probation either party has to give one week’s notice of termination if one month’s service has been completed.

7. (a) What happens if the employer asks the employee not to work the notice period?

In such cases, the employer will still be obliged to pay full wages for the notice period.

(b) What happens if the employee refuses to work the notice period?

It depends who has terminated employment. If the employee has resigned then the employee has to pay to the employer half the wages. If on the other hand the employer has terminated employment then the employee shall be entitled to full wages.

8. Are employees entitled to sick leave during notice periods?

Since the employee is still in employment during the notice period, then the employee is entitled to sick leave.

9. Can pay be deducted if the employee does not turn up to work the notice period due? If not, what recourse does the employer have?

The EIRA is very clear in stating that no amount may be deducted from the wages. The employer has to seek civil redress if the employee fails to settle any amounts due to the company.

10. Does leave entitlement accrue during notice periods?

Yes, leave entitlement accrues till the last day of employment.

11. Does the employee have the right to take unavailed of leave instead of working part or all of the notice period?

The employer should draw the employee’s attention that unutilized leave should be availed of or else it will be forfeited. Leave should always be subject to authorization. The employer still has the right to withhold vacation leave. For example the person who has resigned may be required to give a hand over to a new employee during the notice period. In such cases the employee will be paid for the balance of unutilized leave.

12. How can a break in employment affect the notice period?

It depends on how long the break is. If the break is shorter than 6 months then the two periods will be deemed to be one continuous period.

13. From which date does the notice period begin to apply?

The notice period starts running from the very next day that notice is given.

14. Is a verbal notice legitimate?

Yes but it is advisable to have it put down in writing. In cases where notice has been given verbally by the employee, it pays to produce a written reply to make it official.

15. Can an employee withdraw a notice of resignation?

The employer is not obliged to accept withdrawal of resignation if it has already been accepted.

16. Is an employee entitled to fringe benefits during the notice periods?

Yes.

17. Is an employee entitled to pro rata annual bonuses once notice is given?

The employee is entitled to the pro rata statutory bonuses. With respect to company bonuses, it will depend on the nature of the bonus. For example, if it is specified that the bonus is based on the results achieved on the completion of a calendar/financial year, then the bonus may be forfeited.

On the other hand if the bonus is based on ongoing performance and paid periodically during the year, then the employee will be entitled to the pro rata. This applies also in the case of commission based on sales unless the commission is based on cash collected.

18. Is vacation leave a pro rata entitlement? Can an employer deduct payment for over utilised leave if employee resigns during the year? (see vacation leave)

Vacation leave entitlement is pro rata provided that the employee works on average at least twenty (20) hours per week and it is the principal employment (meaning that national insurance contributions are paid in that employment).

Example an employee working a 40 hour week is entitled to 4 weeks and 4 days (24 days) vacation leave an employee working 20 hours per week is entitled to 12 days and so on and so forth.

Vacation leave always has to be authorised. If it is authorised then no compensation can be requested unless it is made clear that over utilisation is an advance.

The Malta Employers’ Association strongly disputes this point with the Authorities and advises its Members that the best way to safeguard their interests is to authorise any over utilisation of vacation leave on an unpaid basis.

19. If an employee is promoted to a new post and given a new contract of employment, does the notice period commence from the initial date of employment or from when the recent contract came into effect? (see contracts of employment Q.15)

The notice period commences from the first day of employment and not the first day of the new post.