ARTICLE
10 September 2024

When Employers Cross The Line: Unpacking Dishonest Dismissals

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GVZH Advocates

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GVZH Advocates is a modern, sophisticated legal practice composed of top-tier professionals and rooted in decades of experience in the Maltese legal landscape. Built on the values of acumen, integrity and clarity, the firm is dedicated to providing the highest levels of customer satisfaction, making sure that legal solutions are soundly structured, rigorously tested, and meticulously implemented.
Dishonest dismissal in Maltese law involves terminating an employee without valid, substantial reasons or proper procedures. Employers must ensure dismissals are fair, transparent, and proportional to misconduct. The Industrial Tribunal handles unfair dismissal cases, requiring evidence and just cause for termination.
Malta Employment and HR

What is Dishonest Dismissal?

The termination of an employment relationship in Maltese employment law is namely based on the identification of a lawful and just reason for the dismissal by the employer. It is important that over and above identifying a lawful and just reason for the dismissal of an employee, the employer should always ensure that the dismissal procedures are transparent, fair and proportionate to the particular circumstances of the case at hand.

The law specifically dictates in article 2(1) of the Employment and Industrial Relations Act (Chapter 452 of the laws of Malta) that the employer may only terminate a contract of employment, whether it be for a fixed term or indefinite term, on the grounds of:

  • A good and sufficient cause;
  • The term of a fixed contract;
  • Redundancy; or
  • The employee reaching retirement age.

When an employer terminates an employment contract on the basis of good and sufficient cause as required by law, it is important that the employer substantiates such claims especially in situation where the employee in question has no prior disciplinary warnings, whether verbal or written, leading up to the dismissal.

Similarly to UK law, Maltese law places the burden of proof on the employer to establish whether the dismissal was based on justified and substantial grounds or otherwise. If the employer fails to meet this onus, the Industrial Tribunal is likely to decide in favour of the employee. Subsequently, the employee must prove that there indeed existed unfairness in their dismissal, which is extremely subjective in nature, decided on a case-by-case basis. The Industrial Tribunal in various decisions has held that one must provide sufficient proof when claiming a good and sufficient cause for dismissal, showing that the cause genuinely existed and led to the unfair dismissal.

The Maltese Tribunal and Courts hold that the grounds for immediate dismissal must be serious and recurring, and when there is severe misconduct, a dismissal may be justified even if it happens just once. Both the Tribunal and the Courts have concluded that the reasons to dismiss an employee must be so severe that it brings irreparable damage to the relationship between the employee and the employer, therefore the misconduct must either be gross or there have been repeated minor misconducts.

Examples of minor misconduct include:

  1. Persistent lateness;
  2. Unauthorised absence from work;
  3. Minor breaches of company policies;
  4. Insubordination;
  5. Negligence in performing duties.

In comparison, examples of gross misconduct, conducted by the employee, include:

  1. Theft or fraud;
  2. Physical violence or threats;
  3. Severe insubordination;
  4. Damage to company property;
  5. Serious breaches of health and safety regulations;
  6. Harassment and discrimination.

Employers must follow a fair process when dealing with minor misconduct or gross misconduct allegations. Therefore, they must conduct a thorough, impartial investigation into the alleged misconduct, whether minor or gross, and allow the employee to explain their version of the case. The employer must then decide on the appropriate disciplinary action which could range from a warning to a dismissal.

Conduct Dismissal: English Landmark Judgment

The Judgment British Home Stores Ltd v. Burchell was decided by the UK Court of Appeal in 1978, after a decision of the Industrial Tribunal made by Mr. Justice Arnold. This judgment established a vital test to determine the fairness of an employer's decision to dismiss an employee, setting a precedent for the way in which cases are decided on these grounds.

The case was regarding Mrs. Burchell, an employee, who worked as a shop assistant for BHS in 1975. The Company had some concerns about her performance as a shop assistant and therefore, they decided to launch an investigation to look into the matter further. When the case was brought before the Court of Appeal, the main question which arose was whether BHS had acted reasonably in dismissing Mrs. Burchell and whether there was a valid reason to do so. Through this, the Court established a test to determine the fairness of a dismissal.

This three-tiered test came to be known as "The Burchell Test", established by Lord Denning. It dictates that for a dismissal to be fair, an employer must have acknowledged and carried out all of the following elements:

  1. Genuine Misconduct: The employer must genuinely believe that the employee is guilty of the alleged misconduct or poor performance and therefore, the element of good faith must exist;
  2. Reasonableness: This belief must be based on reasonable grounds and thus, the employer should always carry out a reasonable investigation to gather the appropriate evidence to substantiate their belief;
  3. Proportionality: The decision to dismiss the employee must be proportionate to the alleged misconduct or poor performance. This is commonly referred to as the test of reasonable response.

Every Company is free to determine its own terms and procedures for the carrying out of a reasonable investigation at the workplace. In practice, it is commonly seen that a reasonable investigation is handled in such a way that valuable evidence is gathered from both parties, ensuring there is an actual and significant problem to answer to and solve, as well as ensuring fair and equal treatment. This allows the employer to ascertain the next step. Furthermore, the person or Board commonly in charge of the investigation should not be personally involved in the case to prevent any biased treatment from arising. Such a person must always act fairly and objectively.

Examining Major and Minor Misconduct in Practice

In Roseanne Zerafa Le-Gros v. Jing Sun, decided in 2022 by Chairperson Anna Mallia, the Tribunal referred to the five (5) principles which emanate from UK and international jurisprudence, that must be present when considering the allegations;

  1. The allegation of absence or bad behavior which must be specific;
  2. The employer must have a timely response to allow the employee to receive the charges against him and build a defense;
  3. There must be correspondence between the contested fact and that brought forward as a basis for the accusation and the disciplinary action regarding it;
  4. The principle of proportionality between the charge and the sanction imposed;
  5. Each case must be decided subjectively according to its circumstances and results from the evidence to determine whether the employee is guilty of misconduct or not, and if it does, whether the conduct should give rise to dismissal.

Furthermore, in the judgment, Josephine Galea v. Malta Public Transport Services (Operations), decided in 2022 and presided by Chairperson Marouska Debono, the Industrial Tribunal debated whether the employee's conduct would be considered misconduct or gross misconduct as the plaintiff did not present the required emergency notes for the taking of her emergency leave. On the 2nd of October 2018, the respondent Company issued a 'Charge Letter for Gross Misconduct Offense' due to the failure to provide an emergency note for two (2) specific days, which negligence constituted an offense according to the Malta Public Transport Policies and Procedures or Collective Agreement. The Disciplinary Board found her guilty, and she was dismissed. The claimant appealed through her representative from the Union Ħaddiema Magħqudin (UHM), but the appeal was not upheld. She maintained that her dismissal was unjust and without valid reason, arguing that the company's decision was drastic and disproportionate. However, the Tribunal concluded that the reason for the dismissal was justified, since the charge was indeed one of Gross Misconduct, especially since it was not the first time the employee had committed this or other offenses, which occurred over two consecutive dates and because of the fact that various warnings were previously issued against her.

Thirdly, the case Joseph Gatt vs Steward Malta Personnel Ltd / Steward Malta Management Ltd decided in 2022 by Chairperson Edmond Tabone presiding over the Industrial Tribunal, examines a situation of a fair dismissal. The applicant was employed as a Chauffeur/Transport Assistant with the defendant Company. He alleged that Transport Malta was not assisting him in obtaining the necessary D and D1 driving licenses, which were required for his role and these had been recently issued to other drivers in his line of work. Consequently, the applicant was instructed not to report to work until he acquired these licenses. However, it emerged that he falsely claimed to possess a Category B license, which he attempted to obtain secretly. Additionally, he attributed blame on Transport Malta for his lack of obtaining the D and D1 licenses, when he himself remained driving without a license. Thus, the applicant's repeated dishonesty severely impacted the Company's relationship with Transport Malta and the Union involved, and as a result, his dismissal was deemed justified, and no compensation was awarded to him.

Cases of Alleged Unfair or Discriminatory Dismissals

In Malta, a "good and sufficient cause" for dismissal is not strictly defined in the law. Amongst those not considered to be good and sufficient causes for dismissal are the following:

  1. Being a member of a trade union;
  2. Losing the employer's confidence;
  3. Contracting marriage;
  4. Pregnancy or maternity leave;
  5. Disclosing information to a public regulating body with regards to alleged illegal or corrupt activities being committed by his employer;
  6. The business the employee is working in has transferred ownership, and the termination was not required for any economic, technical or organisational reasons necessitating workplace changes.

Further causes which are not deemed to be a good and sufficient cause as provided by the Work-Life Balance for Parents and Carers Regulations (S.L 452.125 of the laws of Malta) include;

  1. Taking of Paternity leave;
  2. Taking of Parental leave;
  3. Taking of Carers' leave;
  4. Time off work based on force majeure;
  5. Requesting flexible working arrangements for parents and carers of children under the age of 8.

Exhibiting and using such grounds for a dismissal of an employee are normally considered as being discriminatory.1 In these cases, the competence of the Industrial Tribunal extends to employees engaged both in indefinite contracts and definite contracts. Any alleged unfair dismissal cases are to be decided exclusively by the Industrial Tribunal, according to article 75(1)(a) of the EIRA.2

Moreover, article 81 of the EIRA provides for the powers of the Tribunal in such cases. An employee who alleges unfair dismissal may lodge a complaint to the Industrial Tribunal within four (4) months from the dismissal. The Tribunal must find that the grounds of the complaint are well-founded, and the complainant must specifically request to be reinstated or re-engaged in the referral or in the statement of his case. Only then would the Tribunal be able to consider whether it would be practicable and fair to re-instate the complainant. Consequently, the Tribunal will make an order to that effect. It will state the terms it considers reasonable for the complainant to be reinstated or re-engaged.

Precautions the Employer may Adopt

To avoid cases of unfair or dishonest dismissals, there are several precautions that the Company employing the employee may opt for. An employer should never underestimate the significance of clear internal policies and procedures which relate to an array of aspects of its relationship with the employee. This includes the manners in which employees could be disciplined, carrying out of fair disciplinary hearings, dismissing employees based on procedures which are based on documented performance reviews and categorizing cases depending on minor misconduct or major misconduct processes.

Having such measures in place, and effectively being enforced, allows for greater transparency with its employees and it minimizes the risk of the employer unjustly dismissing an employee. Additionally, an employer should err on the side of caution and seek legal advice when in doubt about the fairness of a potential dismissal.

Thus, dismissal of an employee should be considered on a case-by-case basis. The rights of the employee should always be protected, especially in cases of dishonest dismissals.

Footnotes

1 S.L. 452.125 of the laws of Malta introduced in August 2022, Article 14;

2 ACT No. LVIII of 2020 of 11th December 2020.

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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