The European Commission has warned Malta a second time that it needs to amend its employment legislation on fixed-term contracts to come in line with EU laws.

The island has been given a few months to regularise its position or face a court case at the European Court of Justice (ECJ), a Commission spokesman said.

The issue revolves around EU employment laws that make it illegal for any employer to keep workers on a temporary contract for an indefinite period.

According to Maltese law, workers engaged on a fixed-term contract renewed for a period exceeding four years are entitled to an indefinite contract. However, this is only applicable to private sector employees and specifically excludes public sector workers.

Following the Commission's intervention and the start of infringement procedures, a correction was made in March 2007 which also covered the public sector. However, certain categories were left out and this is what the Commission is complaining about.

The Maltese statute book still excludes public sector workers who have not been recruited through open competition and the EU wants this to change too.

The Commission said it was still waiting for Malta to respond to its demands.

"If this is not done in the coming weeks, the next step according to our rules is to pass on to the third stage of our legal procedures meaning that the Commission may decide to proceed with the issue in court."

A senior government official said Malta was dealing with the latest compliant by the Commission and measures would soon be taken to rectify matters.