Introduction

In August 2018 four new legal notices were published in the Government Gazette. However, these were short lived, as just a few days later, ministry representatives reportedly declared that the legal notices would be suspended (for further details see "New (now suspended) legal notices").

While it is uncertain whether the Annual Leave National Standard Order (Legal Notice 271/2018) will be enacted, it is worthwhile to analyse the proposed changes, as these would alter current employment law should they come into force.

Proposed changes

The legal notice proposes a number of changes to several pieces of legislation, including:

  • the Organisation of Working Time Regulations;
  • the Protection of Maternity (Employment) Regulations; and
  • the Weekly Day of Rest and Annual Vacation Leave National Standard Order.

Annual leave In particular, Legal Notice 271/2018 states that annual leave cannot be cancelled unilaterally. Rather, it can be cancelled only if both the employer and employee agree, thus safeguarding both parties in situations where one has already made work-related or holiday arrangements.

Shutdowns and temporary closures Legal Notice 271/2018 proposes to introduce new rules relating to shutdowns and temporary closures. Article 3 of the notice states that no more than the equivalent in hours of 12 working days of annual leave entitlement may be used during company shutdowns or to bridge holidays in order to close the business or premises. This prevents employees from being forced to use all of their annual leave in a manner which suits only the needs of the employer and the business. It also obliges employers to give their employees adequate warning when determining shutdown periods for the new calendar year. According to the notice, any form of shutdown, temporary closure or bridging of holidays must be communicated to all employees by the end of January of each calendar year.

Maternity leave Article 5 of the legal notice states that annual leave should continue to accrue during maternity leave. There seems to have been some confusion within various industries regarding this right. Some employers argue that this right was already granted through the Protection of Maternity (Employment) Regulations,(1) which state that employees on maternity leave are entitled to all benefits which other employees in the same class of employment may accrue.

Annual leave accrual Legal Notice 271/2018 proposes that annual leave accrual be specifically regulated by Maltese legislation. However, some argue that this is unnecessary in light of European Court of Justice (ECJ) rulings in this regard. In particular, in Maria Gomez v CIC SA(2) the ECJ tackled an incident where a period of annual leave which had been set out in a collective agreement coincided directly with the plaintiff's maternity leave. The court stated that:

  • if an employee is on maternity leave, they must be able to take their annual leave upon their return; and
  • where maternity leave coincides with annual leave, the requirements of the directive relating to paid annual leave will not have been met.

Article 5(2) of Legal Notice 271/2018 sets out an interesting precedent, whereby employees on maternity leave would be entitled to the equivalent in hours of an additional day of annual leave for every public or national holiday which fell on a work day.

Sick leave Maltese legislation has arguably already addressed employees' right to accrue annual leave during sick leave by following ECJ case law; however, this was reiterated within Legal Notice 271/2018 nonetheless. In particular, in Schultz-Hoff v DRB(3) and Stringer v Her Majesty's Revenue and Customs,(4) the ECJ confirmed that workers who do not benefit from their paid leave due to illness must receive an appropriate allowance of accrued leave.

Interestingly, the new legal notice proposes to introduce a proviso which states that, notwithstanding any other law, if an employee does not use their allotted annual leave by the end of the calendar year, it would automatically be transferred to the next calendar year. The law does not provide for a maximum number of days; as such this could, in theory, amount to an employee having an exorbitant amount of annual leave the following year.

Sick and injury leave Article 6 of the legal notice proposes to introduce a similar concept to the above for sick and injury leave. In short, the legal notice states that while an employee is on sick or injury leave, they would still accrue annual leave. Again, a proviso is included which states that if an employee cannot take their leave due to sickness or injury, this would be carried over to the next calendar year. The following article emphasises that annual leave would be accrued irrespective of whether the sick or injury leave is fully paid.

Pre-arranged leave The new concept of pre-arranged leave is introduced in Articles 8 and 9 of the legal notice, which state that such leave would not be lost if it coincides with a period of maternity, sick or injury leave. In such cases, annual leave would be considered not to have been taken. If the employee cannot take their leave within the applicable calendar year, it would be carried over to the following calendar year. To avoid any doubt, Article 9 clearly states that any annual leave which is accrued during maternity, sick or injury leave and not taken would still form part of the annual leave balance to be calculated on termination.

Comment

The legislature has clearly attempted to solidify employee rights – specifically, their right to annual leave. This legal notice would not only put employers in a better position to handle annual leave requests and the possibility of employees changing their minds, but also impose new obligations on employers to remove any previous grey areas.

Although maternity, sick and injury leave are directly addressed in the legal notice, adoption leave was notably excluded. This is questionable due to the fact that adoption leave is similar to maternity leave in length, tackled in the same way by employers and is also governed by the Maternity and Adoption Leave Trust. Arguably, unlike maternity, injury and sick leave, it may be possible to plan adoption leave ahead of time; thus, employees may not be confined to strict periods of leave. It is still uncertain whether this point will addressed at a later stage.

It will be interesting to see whether this legal notice will be reintroduced in its entirety and, if not, to learn why the legislature has omitted certain provisions.

For further information on this topic please contact Michael Paul Agius at Fenech & Fenech Advocates by telephone (+356 2124 1232) or email (michael.agius@fenlex.com). The Fenech & Fenech website can be accessed at www.fenechlaw.com.

Endnotes

(1) Protection of Maternity (Employment) Regulations (SL 452.91).

(2) C-342/01, Maria Paz Merino Gomez v Continental Industries del Caucho SA.

(3) C-350/06, Schultz-Hoff v Deutsche Rentenversicherung Bund.

(4) C-520/06, Stringer and others v Her Majesty's Revenue and Customs.

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