Malta: Legal Update (Employment) - Amendments To The Employment And Industrial Relations Act – July 2016

The long awaited amendments to the Employment and Industrial Relations Act (Chapter 452, of the Laws of Malta) have finally been enacted in the form of Act No XXXIIII of 2016 - The Employment and Industrial Relations (Amendment) Act 2016, having obtained the assent of the President on the 28th June 2016.

The amendments to the Act are intended to address the cloud of uncertainty which has hovered over the Industrial Tribunal since June 2015 when the Constitutional Court held that the composition of the Tribunal and certain practices adopted by the Tribunal were in breach of the right to a fair hearing. Whether such cloud has been eliminated in its entirety remains dispute, but in any case, every cloud has a silver lining, so they say.

By way of general background, the right to a fair hearing is entrenched in the Laws of Malta by means of the Constitution and the European Convention Act (Chapter 319) which transposes the European Convention on Human Rights.

Summarily, the decision of the Constitutional Court (which eventually was upheld by the Court of Appeal) found that the Act did not guarantee a fair hearing, in that (i) the appointment of chairpersons for a period of three years did not guarantee security of tenure of chairpersons; (ii) the appointment and removal of Chairpersons was left in the wide discretion of the Minister, (iii) the Tribunal relied on third-party advice in connection with disputes without the knowledge of the parties to the dispute, and (iv) the Act instructed chairpersons to rely on Government social policies when determining cases, which reliance did not permit a fair hearing in cases involving the Government.

The judgement thus called for amendments to the law, further to which all pending and new cases filed before the Tribunal (which has the jurisdiction to decide matters of unfair dismissal and trade disputes, amongst others) have been suspended pending the necessary amendments to the Act.

Act No XXXIIII of 2016 introduces a number of amendments, the most prevalent of which include that the chairpersons and members of the Tribunal shall be appointed by the Prime Minister for periods of five years, instead of three years and may be reappointed for another period of five years subject to approval by the Employment Relations Board. Current chairpersons shall be deemed appointed for a five year period. In cases requiring a Tribunal composed of three members, the member representing the government shall no longer be appointed ad hoc by the Minister but shall be chosen by the chairperson appointed for the case from a list of members appointed by the Minister.

The new Act also introduces restrictions for persons to act as chairpersons together with a procedure with which chairpersons and members of the Tribunal may be removed by the Prime Minister and Minister respectively, such removal to be based on reasoned decisions and subject to appeal.

In addition, the new Act emphasises that nothing shall exempt persons forming part of the Tribunal from the duty to act with independence and impartiality according to law. Such persons are not to be subject to the direction or control of any other person or authority in the performance of their judicial duties on the Tribunal. Chairpersons and members of the Tribunal may not, during their term, exercise their profession or assist parties before the Tribunal and, prior to hearing any case, are to declare any interest that they may have in the procedures, further to which the Tribunal Secretary may assign the case to other persons. This latter rule remains without prejudice to the existing right of employees to request the challenge of a chairperson or member of the Tribunal in terms of law.

Furthermore, as regards the general powers of the Tribunal, the new Act clarifies that where the Tribunal summons experts, any expert opinion must not only be given on oath but must also now be heard in evidence, examined in a Tribunal hearing with the parties enjoying the right to ask questions in relation to such opinion. This seemingly restricts Chairperson from seeking third-party expert advice without the parties' knowledge – or does it?

Finally, as regards Government policies, the Tribunal is no longer obliged to take into account social policies of the Government but may, in giving any award, decision or advice, give consideration to the social and economic policies and to the principles of social justice prevailing at the time of its pronouncement if it considers that these are relevant to the determination of the case before it.

In conclusion, it appears at face value that the legislator has acted towards ensuring an improved 'fair hearing' when it comes to the composition of the Tribunal, the appointment of members and chairpersons of the Tribunal and certain powers of the Tribunal.

Whether this meets the desired standards which were put into question by the Constitutional Court in 2015 is still something to be determined in practice.

It is known that all stakeholders in the field of employment law are currently analysing the practical implications that this Act shall have.

Are five years sufficient to guarantee security of tenure? Is the appointment of new chairpersons at the discretion of the Prime Minister 'after consultation' with MCESD sufficient? Is it sufficient to state that Chairpersons may give consideration to social and economic policies?

This analysis does not end here. Fenech & Fenech Advocates continues to evaluate the implications arising from these amendments at the same time as being engaged in a separate, highly controversial, case which may require the Constitutional Court to determine whether all past judgements of the Tribunal should be declared null in view of the prior finding that the right to a fair hearing was not guaranteed by the EIRA.

In the meantime, further to the amendments, all pending Tribunal cases are expected to be called back in session any time soon, perhaps after the summer recess. Indeed, this may be a silver lining.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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