Transfer of Employees in Malta

The main laws governing employment in Malta are the Employment and Industrial Relations Act and the Transfer of Business Regulations. The latter is also known as the Protection of Employment Act as it provides for the rights of employees in case the company hiring them is sold or taken over by another enterprise. The Protection of Employment Law applies at EU level in order to facilitate cross-border transactions between companies and ensuring, at the same time, that the right to employment is not violated.

Foreign citizens working in Malta based on an employment permit must know that they are entitled to transfer the license issued by the Employment and Training Corporation whether switching jobs or in case the company they work for is taken over.

How does the transfer employees occur in Malta?

The Employment and Industrial Relations Act is divided into several parts which provide for:

• -          recognition of employment;
• -          recognition of employment conditions;
• -          protection of the remuneration an employee is entitled to;
• -          protection against discrimination;
• -          termination of the work contract.

Based on these provisions, a local or foreign company taking over a business in Malta must treat respect the workers’ rights to employment by transferring them in accordance with the stipulations of their labor contracts. After the transfer of the workers, their employment contracts will immediately enter into effect. The employer will also take over the rights, powers and obligations towards the workers.

Our lawyers in Malta can provide you with more information about the Employment Law.

Amendments to the Protection of Employment Act in Malta

At the end of 2014 and effective from 2015, the Transfer of Business Act has suffered a few modifications in relation to the transfer of employees in Malta. According to these new provisions, a company transferring workers to another one must pay any outstanding amount, whether it is a salary, bonus or an allowance, before the transfer takes place.  Also, the person representing the employees’ interests in a transfer must benefit from legal advice in a partial or total takeover.

For complete information about the steps of employment transfer process, please contact our Maltese law firm.