Are constructive dismissal cases on the rise in Malta?

Malta may be seeing a quiet but notable shift in employment dynamics: a growing number of employees appear more willing to resign and seek compensation for what they perceive as unfair treatment at work.

While it’s still too early to call it a trend, Andrew Borg Cardona – a lawyer specialising in commercial and labour law – tells MaltaCEOs.mt that there’s an emerging rise in constructive dismissal claims, a legal route employees may take when they feel forced to resign due to an employer’s behaviour.

“It’s only an impression,” he notes, “but I’m seeing an increase in constructive dismissal cases, probably brought about by an increased perception in the part of employees that if they are not treated properly, they have the right to resign and sue for compensation.”

Consider this example of constructive dismissal: an employee is repeatedly promised a promotion that never materialises. Over several months, her responsibilities grow significantly – she’s asked to lead projects and manage teams – yet her job title and salary remained unchanged. Despite raising her concerns multiple times, she receives no formal recognition or resolution, leading her to her resignation. She eventually files a claim for constructive dismissal.

While clear data on constructive dismissal is limited, since few Industrial Tribunal decisions tackle the issue directly and each case must be reviewed individually, there are signs that more employees are willing to challenge what they perceive as unfair treatment at work, according to Dr Borg Cardona.

“Generally, employers would counteract by arguing that the treatment of which the ex-employee was complaining was legal and reasonable,” he noted.

As Dr Borg Cardona points out, companies would do well to ensure their internal policies are transparent, fair and well-documented, especially through consistent and enforceable policies that apply equally to all staff.

Employer vs employee

Turning to misconceptions about employment law, Dr Borg Cardona says the most persistent one, in his view, is the belief that it unfairly favours one side, either employers or employees.

“Employers think that the law is biased in favour of employees, while employees think the other way applies,” he explains.

He continues: “In truth, employment law is aimed somewhat more towards protecting employees, which is fair enough since they are in a more vulnerable position.”

However, this does not mean that employers are left powerless. The Industrial Tribunal and the courts play a crucial role as the ultimate arbiters in interpreting the law, he explains.

Bonuses: what the law requires

A frequent question from both employers and employees is whether bonuses are obligatory.

The answer is yes – Maltese law mandates two types of statutory payments: the Annual Bonus, paid in two instalments in June and December, and the Weekly Allowance, paid in March and September.

However, he explains that other types of bonuses, such as performance-based or contractual incentives, are not legally required unless they are stipulated in an employment contract or company policy.

Regulation of remote work

The rise of remote work has brought new questions to the forefront. While there are existing Telework Regulations in place, the lawyer expresses that Malta’s legal framework for remote work still involves navigating multiple legal sources.

“Most arrangements come into effect by means of an ad hoc agreement, which if properly written addresses most issues,” he says.

However, it would be appropriate if there is a degree of codification and harmonisation brought into effect, as there are a number of obligations that are found in different areas of the law, he concludes.