Luana Farrugia M. Adv.
Due to the severity of Covid-19, some companies have resorted to collective redundancies in order to save their businesses. Two kinds of redundancy are contemplated in Maltese law, one of them being collective redundancies.
Collective redundancies are regulated in more detail by Legal Notice 428 of 2002 http://www.justiceservices.gov.mt/DownloadDocument.aspx?app=lom&itemid;=11214, entitled ‘Collective Redundancies (Protection of employment) Regulations’.
Collective redundancies may take one of three forms:
- Termination of employment of 10 or more employees over a period of 30 days in establishments normally employing more than 20 employees but less than 100 employees.
- Termination affecting 10% or more of the workforce in establishments employing 100 or more but less than 300 employees, and;
- Termination of employment of 300 employees or more in establishments employing 300 or more employees. In this particular case, the termination for any reason beyond the control of an individual employee, even if not for reasons of redundancy, shall nevertheless be assimilated to redundancies, so long as there are at least 5 redundancies in all.
Before resorting to collective redundancies, an employer is in duty bound to consult with the employees’ representative after notifying of the contemplated termination.
The consultations between the representatives and the employer must begin within 7 days from notification of the intended collective redundancies and the employer is also bound to provide the representatives during this time with a statement disclosing all relevant information, including the reasons for redundancies, the number of employees intended to be made redundant, and the total number of employees normally employed. Moreover, the statement is also to include the proposed criteria for the selection of employees rendered redundant, the details regarding any redundancy payments and the period over which redundancies are to be affected. Further to this, the law outlines that the consultatiton and discussion must be focused on the avoidance of the proposed redundancies, or reducing the number of employees affected. These written statements must be forwarded to the Director of the Department for Employment and Industrial Relations (DIER).
It the employer is controlled by another undertaking, it is likewise bound by these obligations too. Failure to observe these requirements amounts to a criminal offence punishable by a fine of not less than €1,164.69 for every employee that is made redundant. The law therefore considers collective redundancies a serious matter, and seeks to protect employees from undue dismissal.
The information provided does not constitute legal advice.
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