In Malta, the Employment Relations Act (Chapter 452 of the Laws of Malta) stipulates the legal requirements for notice periods during employment termination.

Notice Period Calculation

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:

• Less than one month: No notice required
• More than one month and up to six months: One week's notice
• More than six months and up to two years: Two weeks' notice
• More than two years and up to four years: Four weeks' notice
• More than four years and up to seven years: Eight weeks' notice

It's important to note that the established notice period cannot be extended by contract.

Notice Period During Probation

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.

Exceptions to Notice Periods

There are situations where termination of employment can occur without following the notice period:

• Serious Disciplinary Grounds: If the employer has a valid and sufficient reason for dismissal due to serious employee misconduct, they can terminate employment immediately without notice.
• Fixed-Term Contracts: Notice periods typically don't apply to fixed-term contracts that naturally reach their end date. However, a one-week notice may apply during the probation period of a fixed-term contract if the employee's service exceeds one month.

In Malta, the entitlements to severance pay are limited and are tied to specific circumstances.

Limited Severance Pay

In general, Maltese employers are not legally obligated to provide severance pay beyond covering wages during the stipulated notice period.

Circumstances for Entitlement

Severance pay may be granted in the following scenarios:

Termination of Fixed-Term Contracts

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.

Redundancy Due to Insolvency

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.

Non-Standard Severance

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.

Indefinite Contracts

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:

• If an employee is terminated due to a valid and sufficient reason, such as serious misconduct, the notice period may be waived. Employers must have clear documentation justifying the immediate termination.
• If an employer doesn't want the employee to work the notice period, they can choose to pay a sum equal to the wages the employee would have earned during that period.

Fixed-Term Contracts

For fixed-term contracts:

• These contracts end upon the agreed date, and generally don't require a notice period.
• If a fixed-term contract is terminated before expiry, the employer must pay the employee half the standard wages for the remaining contract period.

Unfair Dismissal

In situations of unfair dismissal:

• Employees who believe they were unjustly terminated can file a complaint with the Industrial Tribunal within four months of termination.
• The Tribunal can order reinstatement, compensation, or other remedies if it determines the termination was unfair.

Additional Termination Requirements

There are also additional requirements for termination:

• While not a strict legal requirement, it's best practice for both employers and employees to issue formal termination letters outlining the reason, effective date, and any outstanding payments.
• On termination, employers must pay all outstanding wages, overtime, vacation leave, bonuses, and other entitlements due to the employee.