Dismissal of workers

Will it become easier for employers to dismiss workers if we join the EU?

No. It should not. The dismissal of workers is an issue that is already very much regulated in each individual country at national level. Each country has regulated this matter in response to changing patterns in internal industrial relations, the strength of trade unions and so on.

This has been the case even before the EU entered the field of social policy. For this reason, the need was never felt for the EU to "harmonise" rules on dismissal of workers. This applies in particular to the issue of unfair or unlawful dismissal where there is no EU law on the matter.

This means that it is up to each country to continue to regulate the issue of unlawful dismissal.

The issue of dismissal has been in the news recently because of events in Italy which led to a general strike called in protest against the Italian government`s moves to change the law that provides for the reinstatement of workers who have been unfairly dismissed. This is known as the "Article 18" of the Italian Workers` Statute of 1970. Under this law, an employer who is found to have dismissed a worker in an unlawful manner, is obliged to reinstate the worker.

This matter is regulated by Italian law, not by EU law. And any attempt by the Italian government to change this situation is not linked to any EU law, but simply to domestic considerations. Some people have wrongly linked what is happening in Italy to the EU.

On the issue of dismissal, Maltese law protects workers from unlawful dismissal. The new proposals to change our employment and industrial relations laws do not change the principle that workers cannot be dismissed without a good and sufficient cause. If anything, the new proposals seeks to add new grounds that cannot be used as a sufficient reason to sack workers.

Having said that, there are some EU laws that are relevant in this area. These do not apply to unlawful dismissal as such, but to the rights of workers who are faced with dismissal. For closely linked to dismissal there is the issue of the rights of workers who have been dismissed. This includes cases where workers have been lawfully dismissed because of redundancy or the bankruptcy of their employer.

One EU law relates to the change of ownership of companies, also known as transfer of undertakings, or mergers. This issue is becoming increasingly relevant for us in Malta in view of the ongoing process of restructuring.

Here, EU law states that workers cannot be dismissed simply as a result of a change of ownership of the business. This does not mean that workers may not be dismissed as a result of decisions for economic, technical or organisational reasons taken by the new owners. So the protection is not absolute.

In such cases, workers have the right to keep the rights they had before the company was acquired by new owners. On their part, employers, old and new, are obliged to inform and consult the representatives of the workers that are affected by the transfer.

Another EU law relates to workers` rights in cases of collective redundancies, basically in cases where redundancies involve 10 workers or more. EU law does not question the prerogative of a company to restructure itself or to set workers redundant. What it does is address the social consequences of decisions that may lead to job losses.

In particular, it requires workers to be adequately informed and consulted through their representatives and that the authorities are also notified before the dismissals. Consultations should be made with a view to reducing the impact of the consequences that may be caused and possibly even to reduce the number of workers affected.

In order to allow for adequate consultation, the law also imposes a delaying mechanism of, at least 30 days, before which the redundancy cannot take effect. For indeed, if there is something that is worse than losing one`s job, it is losing your job without knowing what has hit you. We have experienced this kind of situation in our country only recently.

Another EU law relates to the rights of workers in cases where they lose their job because of the insolvency or bankruptcy of the employer. The most important point here is that there must be a so-called guarantee-fund that is set up on a national basis to help pay for the outstanding wages of the workers who have lost their job without getting paid their outstanding wages.

This is the first time that such a fund will be established in Malta. So far, workers only had a privilege on part of their dues, but no guarantee that they will get them.

Again, we have had recent cases of workers ending up in this situation, only to find that they had no protection of the law.

Maltese law is currently in the process of being changed, not least to take on board these EU rules on workers` rights which did not previously exist in our law. This is being done as part of the long-awaited changes to our laws on employment and industrial relations. This process should be completed by this year, in time for the January 2003 deadline that our country has put to prepare itself for membership.

Malta-EU Information Centre: Tel: 25909192; Fax: 227580; E-mail address: euinfo.mic@magnet.mt; Website: www.mic.org.mt

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