Unfair Dismissal

When would the dismissal of an employee be considered as unfair?

The Employment and Industrial Relations Act (Chapter 452 of the laws of Malta) defines the term “unfair dismissal” as meaning:

1. the dismissal of an employee on an indefinite employment contract (other than probationary employment), which is not made solely on the grounds of redundancy or for a good and sufficient cause;
2. the dismissal of an employee who carries out any act in contemplation or furtherance of a trade dispute and pursuant to a directive issued by a trade union, and which act does not breach a collective agreement, or a binding settlement, decision or agreement, or a decision or award of the Industrial Tribunal;
3. a dismissal which, though made on grounds of redundancy or for a good and sufficient cause, is discriminatory, and includes any failure by the employer to re-employ such person as required by applicable law; or
4. the termination by the employer of a fixed term employment contract prior to its expiration, save where such termination occurs for a good and sufficient cause.

The fairness or otherwise of the dismissal of an employee will also depend on the nature of the procedure followed by the employer to take such a drastic decision. As such, apart from identifying a lawful and just reason for the dismissal of an employee, the employer should ensure that its dismissal procedures are fully transparent, fair and proportionate to the circumstances of each particular case.

What precautions may the employer adopt to avoid allegations of unfair dismissal?

Apart from having carefully drafted employment contracts, the employer should never underestimate the importance of having clear internal policies and procedures relating to various aspects of its relationship with its employees, including the types of scenarios in which employees may be disciplined and eventually dismissed as well as the procedure to be followed by the employer should it decide to dismiss any employees.

Having such documented policies and procedures in place not only increases transparency with its employees, but also minimises the risk of the employer being deemed as having unjustly dismissed an employee.

It is also important for the employer to ensure that all steps that may be involved in any process that may lead to the dismissal of an employee – starting off with any disciplinary warnings and including any other communications, meetings, decisions and notifications – are documented in writing and with sufficient detail and clarity to ensure full transparency of the dismissal process.

Keeping in mind that prevention is better than cure, it is crucial for the employer to seek legal advice should it have any doubt as to the fairness of a proposed dismissal. In the same spirit, legal advice should also be sought by the employer when devising an internal policy framework that seeks to set out policies and procedures relating to the dismissal of employees.

When can an employer face an allegation of constructive dismissal?

The Employment and Industrial Relations Act does not expressly refer to the notion constructive dismissal. Nevertheless, constructive dismissal has been recognised by the Industrial Tribunal and the Maltese courts as a concept which is relevant to the Maltese employment legislative framework.

Simply put, constructive dismissal of an employee may be deemed to arise when the employee’s resignation or the abandonment of his employment is forced or induced by the employer, whose conduct or behaviour causes the employee to terminate or abandon his employment. In the absence of legislative definitions or criteria, the Industrial Tribunal and the Maltese courts typically defer to English legal authors and judgments to establish the parameters of what conduct would be considered as giving rise to constructive dismissal.