The Employment Contract

15 March 2021

BDO Malta - The Employment Contract

 

Maltese employment law is essentially based on the contractual agreement entered into by an employer and employee. Although the employer and employee are given some degree of discretion on the conditions included in the employment contract, the Employment and Industrial Relations Act (hereinafter the “Act”) strictly regulates certain conditions of employment which are to be necessarily included in the employment contract.

 

Maltese law does not specify that an employment contract must be entered into, and therefore, an employment contract does not necessarily have to be one in writing, as the absence of such will necessitate that the Act and its subsidiary legislation apply. Nevertheless, it is standard practice to enter into a written agreement, as this ensures that both employee and employer are aware of their duties and responsibilities which arise from the employment relationship.

 

If the employer and the employee do wish to enter into an employment contract, then they must do so in conformity with the minimum standards of conditions set in the Act. At the minimum, a contract of employment must contain details regarding the date of commencement, the probation period (which is usually six months but may be increased to one year when the wage of the employee is double the minimum wage or higher), the wage and overtime wages, an indication of when wages are to be paid to the employee, normal hours of work, leave entitlement, duties of the employee, notice periods which are required for termination of the contract and any other applicable conditions of employment.

 

Typical contracts are usually either for an indefinite term or a fixed term and are either on a full-time or part-time basis. For each type of contract, different rules apply – mainly in relation to the mode and the consequences of termination.

 

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The law also provides for the possibility of entering into collective agreements, which are entered into by an employer and a trade union who negotiate working conditions and other relevant aspects on behalf of the employees. Employees that do not form part of the trade union may also avail themselves of the benefits set out in the collective agreement by choosing to have their relationship with their employer governed by the collective agreement.

Although the Act and subsidiary legislation set minimum standards, contracts of employment can be a very important asset for employees and employers alike. The contract may include clauses regarding data protection and confidentiality for clients and information obtained in the workplace. Furthermore, the employment contract may be used in order to protect the intellectual property of the employer and ensure that any IP created by the employee in the course of employment is owned by the employer. These elements may vary according to the needs to the employer and the employee and the demands of the workplace.