Act No. LVIII of 2020 enacted by Parliament and ratified by the President of Malta was a much-needed clarification in relation to fixed term contracts and unfair dismissals under the main Malta Employment Law legislation, the Employment and Industrial Relations Act.
The Act has been amended to broaden the scope of ‘unfair dismissal’ which now includes reference to termination by the employer of workers employed under a fixed term contract. The amendments also differentiate between expiration of a fixed term contract of employment and a termination of such employment in the sense that an expiration of such fixed term contract shall not fall under the rules of unfair dismissal under Malta Employment Law.
A further differentiation between dismissal and termination of an employee under a fixed term contract was made. Under the new amendments, an employer who terminates the contract of an employee before expiration of the time specifically under the fixed term contract shall pay to the employee a sum equal to one-half of the full wages that would have accrued had the employee remained in employment for the remainder of time under the contract. Thus, the wording has been changed from ‘dismisses” to “terminates” for clarity purposes.
Indeed, in cases of dismissal, then, it has been further clarified that now, under Malta Employment Law:
- An employer may dismiss the employee on a contract of service for an indefinite time and the employee on a contract of service for an indefinite time may abandon the service of the employer without giving notice and without any liability to make payment if there is good and sufficient cause for dismissal or abandonment; and
- An employee may abandon a fixed term contract of service prior to its expiry and an employer may terminate a fixed term contract prior to its expiry without any liability to make payment if there is good and sufficient cause for such dismissal or abandonment.
Finally, the Act has further granted jurisdiction to the Industrial Tribunal to hear and decide on Malta Employment Law cases relating to monies which may become due to an employee or an employer following the termination of a fixed term contract before the time specifically mentioned in the contract.
