What constitutes a Collective Redundancy?

The term Collective Redundancy implies the termination of employment by the employer on grounds of redundancy. In simpler terms – the termination of employment due to lack of work engaged by the employer.

Moreover, for there to be a Collective Redundancy, the number of employees being made redundant shall be:

• 10 or more in establishments employing 20 to 99 employees,
• 10% or more in establishments employing 100 to 299 employees and,
• 30 or more in establishments employing 300 or more.

The law implies that in case of a Collective Redundancy the rule to be followed is that of ‘last in first out’. Hence, irrespective of the level of performance of the employee, it is the last employee engaged by the employer who is to be made redundant in such instances. However, there is one exception – in case of an employee being related to the employer by consanguinity or affinity up to third degree, the employer may choose to hold on to said relative as an employee and dismiss the next in line.

The employer proposing to declare a Collective Redundancy has several obligations when doing so. These include the fact that the employer has the duty to notify in writing the Employees’ representative and the Director of the Department of Industrial and Employment Relations about such intention whilst giving the said representatives an opportunity to consult.

The abovementioned consultations between the employer and the employees’ representative/s should commence within 7 working days from the day of notification and are intended to cover ways and means of avoiding the collective redundancy or measures to be taken in order to reduce the number of employees affected by such action.

Within the aforementioned notification made by the employer, the latter shall provide the addressees with information relating to:

• The reasons for the redundancies,
• The number of employees intended to be made redundant,
• The number of employees normally employed,
• The criteria proposed for the selection of the employees to be made redundant,
• The details of any redundancy payments which are due and,
• The period over which redundancies are to be effected.

The notice of termination of employment shall start to run from the date of commencement of the consultations with the employees’ representatives. Nonetheless, in such cases, the employer has no right to terminate the employment of the prospective redundant employees before the lapse of 30 days from the aforementioned notification unless with the prior consent and approval by the Director responsible for Employment and
Industrial Relations. The latter may also extend the period by an additional 30 days if it may provide further opportunities to mitigate the negative effects of the action. The director has to notify the relevant employer of such extension.

Moreover, Maltese Law implies that any employee who is made redundant is to be re-employed if the post formerly occupied by him/her is again available within a period of 1-year from the date of termination of employment. The conditions of such re-employment shall not be less favourable than those to which s/he would have been entitled to, had the contract of employment never been terminated.

A re-employed employee as explained above shall be considered, for the purpose of the law, to have never left the position.

The employer shall make sure to execute and abide with the abovementioned duties and obligations - or else be liable to a fine of not less than €1,164.69 for every employee that is declared redundant.

About the Author

This article has been authored by Bjorn Camilleri, CSB Group Legal Trainee. For any additional information or support required please contact us on [email protected].