Learn about the legal processes for employee termination and severance in Malta
In Malta, the Employment Relations Act (Chapter 452 of the Laws of Malta) stipulates the legal requirements for notice periods during employment termination.
The notice period is determined by an employee's continuous service with the employer. The minimum notice period based on service duration is as follows:
It's important to note that the established notice period cannot be extended by contract.
During the probationary period, the employer and employee can terminate the employment without providing a reason and without a notice period, as long as the employment lasted less than one month. However, if the employee has been with the company for more than a month during the probation period, a one-week notice period applies before termination.
There are situations where termination of employment can occur without following the notice period:
In Malta, the entitlements to severance pay are limited and are tied to specific circumstances.
In general, Maltese employers are not legally obligated to provide severance pay beyond covering wages during the stipulated notice period.
Severance pay may be granted in the following scenarios:
If an employer terminates a fixed-term contract before its natural expiry, the employer is required to pay the employee half the standard wages that would have been earned for the remaining contract duration.
Employees who are made redundant due to employer insolvency can claim from the Wage Guarantee Fund. These payments include wage arrears, outstanding vacation leave compensation, and other entitlements under employment law. However, payments from the Fund are capped at 13 weeks of the national minimum wage at the time of employment termination.
In some instances, employers might offer enhanced severance as part of the termination process or to facilitate settlement agreements. However, this is not a legal requirement.
The process of terminating an employee in Malta varies depending on the reason for termination and whether the employment contract is for a definite (fixed-term) or indefinite period.
In the case of indefinite employment contracts, both employers and employees have the right to terminate the contract at will, but they must adhere to certain guidelines:
For fixed-term contracts:
In situations of unfair dismissal:
There are also additional requirements for termination:
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