Employment Contracts in Malta

One of the most important components of starting a company in Malta is the employees. With one of the most talented workforces in the European Union, foreign investors who open businesses in Malta have plenty of national workers to choose from without spending money with hiring personnel from abroad. However, subsidiaries or branch offices of foreign companies can bring employees from the parent company’s country of origin to work in the Maltese companies. In this case, work permits must be obtained for those employees.

Hiring of any individual is based on an agreement between the employer and the worker - the employment contract. Our company formation consultants in Malta can explain the provisions of the Employment Law on work contracts.

Types of employment contracts in Malta

Local employers must provide their workers with proper conditions to carry out their activities. One of these conditions is the employment contract which must be concluded in writing. There are several types of employment agreements a Maltese company can sign with its employees depending on the position to be occupied. These are:

• -          temporary or fixed-term work contracts;
• -          permanent or indefinite work contracts.

There is also the service contract which is usually concluded by companies with individuals supplying an independent service, as it is the case of IT specialists working as sole proprietorships.

What should a Maltese work contract contain?

The Maltese company hiring an employee can include various clauses in the employment contract, however there are specific requirements the agreement must adhere to. Among these are:

• -          the contract must contain identification information on both the employer and the employee;
• -          the place of work must be states in the employment contract;
• -          the salary, including bonuses or additional overtime payment must be specified in the contract;
• -          the working hours must be clearly stated in the agreement;
• -          the holiday or vacation period the employee is entitled to.

It should be noted that the employer has the right to impose a trial period which is usually set at 6 months in Malta. The conditions for termination of employment must also be specified in a Maltese work contract.

In Maltese companies, it is usually the human resources department which handles the drafting and maintenance of work contracts and our local agents can recommend our partners who offer HR and payroll services. Please feel free to contact our company incorporation consultants in Malta if you want to open a company here.