In Malta, employment law provides a variety of contractual frameworks to cater to the needs of both employers and employees. The most common types of employment agreements are as follows:

Full-Time vs. Part-Time Employment Contracts

These contracts can be further divided into:

• Indefinite Contracts (Permanent): These are the most common type of employment contract, offering employment with no predetermined end date. They continue until either party decides to terminate the contract, provided they give the appropriate notice as outlined in the agreement.

• Fixed-Term Contracts (Temporary): These contracts specify a definite start and end date for the employment. Maltese law limits these contracts to a maximum duration of four years. After this period, they automatically convert into indefinite contracts if not renewed. If an employee continues working after the fixed term has ended, and the employer does not provide a new fixed-term agreement within 12 days, the contract automatically becomes an indefinite one.

Temporary Agency Work Contracts

This type of contract involves three parties:

• Temporary Agency Worker (Employee): This individual is employed by a staffing agency.
• Staffing Agency (Employer): This entity manages the employment relationship and assigns the worker to client companies.
• Client Company: This company benefits from the services of the worker but does not directly employ them.

Employment agreements in Malta are governed by Maltese employment law, which provides a framework for fair working conditions. However, many specifics are left to be agreed upon in the employment contract. A well-drafted contract protects both employers and employees by outlining expectations and responsibilities.

Core Employment Details

The agreement should clearly identify the employer and employee by name and title. It should specify the date the employment begins and indicate whether the contract is definite (fixed-term) or indefinite (open-ended). The primary work location should be stated, with details on remote work arrangements if applicable.

Job Description and Responsibilities

The employee's position and core duties should be outlined. The specific tasks and expectations associated with the role should be described.

Compensation and Benefits

The base salary should be specified, including currency and payment frequency. The terms of overtime pay, if applicable, should be detailed. Any additional benefits offered, such as health insurance, vacation leave, sick leave, and bonuses, should be listed.

Working Hours and Leave

The standard working hours per week and any shift work arrangements should be specified. The employee's entitlement to annual leave, sick leave, and other forms of leave, following statutory minimums, should be detailed.

Termination of Employment

The required notice period for termination by either party, adhering to legal minimums, should be outlined. Consider including clauses addressing termination due to redundancy, misconduct, or performance issues.

Additional Considerations

Sensitive employer information and intellectual property rights should be safeguarded through confidentiality and non-compete clauses, ensuring compliance with Maltese law. Data privacy obligations should be addressed, especially if the employee handles personal information, aligning with the General Data Protection Regulation (GDPR).

This is not an exhaustive list, and the specific clauses included will depend on the nature of the employment and the needs of both parties. It's advisable to consult with a legal professional to ensure your employment agreement complies with Maltese labor laws and best practices.

The probationary period is a significant initial phase of employment in Malta. It allows both employers and employees to assess suitability for the role.

Probationary Period: Definition and Purpose

A probationary period is an established period at the commencement of employment during which the employee is assessed by the employer for his suitability for the job and the employee decides whether he/she wants to continue his/her employment in that particular job. It offers a trial period for both parties to determine if the working relationship functions effectively.

Duration of Probation

The legal framework in Malta establishes guidelines for probationary periods:

• Standard Duration: The Employment and Industrial Relations Act (EIRA) dictates a default probation period of six months for indefinite contracts.
• Exceptions: For specific positions, a longer probation of up to one year can be applied. This applies to employees in "technical, executive, administrative or managerial posts and whose wages are at least double the minimum wage established in that year". However, the contract or a collective agreement can specify a shorter probation period for these roles.
• Fixed-Term Contracts: The probationary period for fixed-term contracts should be proportionate to the overall contract duration. The Department of Industrial and Employment Relations (DIER) offers this guideline: "two months per six months contract duration" for contracts between six and fifteen months, with a six-month maximum for contracts exceeding fifteen months, and one-third of the duration for contracts less than six months.

Termination During Probation

A key feature of the probationary period is the flexibility for either party to terminate the employment without needing a specific reason, provided proper notice is given. The required notice period is one week if the employment has exceeded one month.

Key Points to Remember

• Probationary periods allow for mutual assessment of fit between employer and employee.
• The standard probation period in Malta is six months for indefinite contracts.
• Longer probations of up to one year are possible for specific high-paying positions.
• Probation periods for fixed-term contracts are linked to the overall contract duration.
• During probation, either party can terminate with a one-week notice (if employment exceeded one month).

Protecting sensitive business information and fostering fair competition are important considerations in Maltese employment contracts. Confidentiality and non-compete clauses are the key elements that come into play in this context.

Confidentiality Clauses

Confidentiality clauses aim to safeguard an employer's confidential information, such as trade secrets, client lists, and proprietary data. While not explicitly regulated by Maltese law, these clauses are commonly included in employment contracts.

Key Considerations for Confidentiality Clauses

• Specificity: The clause should clearly define what constitutes confidential information.
• Reasonable Scope: The scope of restricted information should be reasonable and limited to legitimate business interests.
• Duration: The limitation period for confidentiality obligations should be reasonable and not extend indefinitely after employment ends.

Non-Compete Clauses

Non-compete clauses restrict an employee's ability to work for a competitor or engage in similar activities after leaving the company. Maltese law recognizes non-compete clauses, but their enforceability hinges on reasonableness.

Factors Determining Enforceability

As established in the court case Cutrico Services Limited vs Joseph Penza (2022), a non-compete clause will likely be upheld if it meets the following criteria:

• Legitimate Interest: The clause protects a legitimate business interest of the employer, such as trade secrets or customer relationships.
• Reasonable Geographic Scope: The restricted geographic area is reasonable and not overly broad.
• Reasonable Time Period: The duration of the restriction is proportionate to the legitimate interest being protected, typically a few months.
• Seniority and Role: The clause is more likely to be enforceable for senior employees with access to critical information.

Confidentiality and non-compete clauses can be valuable tools for employers, but they should be drafted carefully to comply with Maltese law and ensure fairness to employees.