Maltese Employment Contracts
Foreign companies hiring employees in Malta must operate within a strict framework of legislation that relies on both federal laws, European Union (EU) directives and collective agreements that provide safeguards and entitlements for the workforce. These include:
- Wage Regulation Orders (WROs) that outline conditions applying to individual sectors
- The Employment and Industrial Relations Act (also known as the Labor Code)
- The Employment Commissions Law
- The Employment and Training Services Law
- The Public Services Management Code
These considerations come into play during the first stages of hiring and onboarding – including drawing up a contract with your new employee. Once Bradford Jacobs’ Professional Employer Organization (PEO) recruitment networks have located the best talent for your company, we step in to advise on this crucial element of recruitment.
Employment Contracts in Malta
Within one month of starting work, employees working with a company for more than one month and at least eight hours a week must receive from the employer either a written contract, or a written statement of the fundamental working conditions. The basic information should include such as: remuneration and overtime, working hours, place of work, role, and paid vacations.
The main types of employment contract are:
- Indefinite, Open-ended Employment Contracts: The most common type of contract. If no other arrangement has been agreed, the contract is deemed to be indefinite. Either party can terminate the contract, but must abide by contracted terms of notice, severance agreements and any collective agreements.
- Fixed-term Employment Contracts: These can be renewed up to a maximum of four years, after which the contract is considered to be indefinite. If the employee is kept on after the fixed-term contract they will move to an indefinite contract unless the employer issues a new fixed-term, contact within 12 days of expiry of the previous agreement. If either party terminates before time, they must pay the other a sum equal to half the wages the employee would have earned for the remainder of the agreement.
- Probation Periods in Employment Contracts: It is implicit that the first six months of contracts for new employees constitutes a trial period. Probation can be terminated by either party with one week’s notice if trial period has exceeded one month. One year’s probation applies to managerial or executive posts where salary is twice the minimum wage unless the contract agrees to a shorter period.
Other types of contracted employment in Malta:
- Part-time permanent work: Entitles worker to pro rata benefits such as holidays and sick leave
- Commission-based employment: Pay based on reaching targets
- Apprenticeships and Traineeships: Usually fixed term for three to five years