The Court of Appeal, presided over by Mr Justice Raymond C. Pace, on June 26, 2012, in the case “Charlene Vella vs Banif Bank (Malta) plc”, held, among other things, that a staff member’s contract of employment was terminated during her period of probation and the bank as employer had the right to terminate her employment during her probation without giving reasons. It was immaterial whether she reached the performance levels expected by the bank.

The facts in this case were as follows:

It was not necessary to consider whether the bank had a valid reason for the dismissal

This case was referred to the Industrial Tribunal by Charlene Vella.

Ms Vella stated that she was employed by Banif Bank under an indefinite contract dated February 5, 2009, in scale 2 grade.

She said that on November 10, 2009, she received a phone call from another employee to meet her after work and, as the two were allegedly friends, she agreed. This employee told her that the bank wanted to sack her with immediate effect.

Ms Vella still reported for work the next day but she was summarily dismissed and was shown the door by the branch manager.

When she asked for the reason for her dismissal, the bank retorted that she was still on probation. In fact, on the termination form of her employment, the company inserted as the reason for her dismissal: “employment terminated while on probation”.

Ms Vella, however, claimed that her six-month probation period ended on November 4, 2009, and not on November 11, 2009.

She said that the bank terminated her contract of employment after her six-month probation had already expired and for this reason she contended that her dismissal was not justified in terms of Act 2003 on Employment and Industrial Relations, chapter 22.

The bank, in reply, said that Ms Vella was employed with effect from May 11, 2009, and that she was dismissed on November 10, 2009, before the lapse of her probation period of six months.

In this case, the tribunal had to consider whether she was dismissed during the period of probation.

It resulted that Ms Vella was employed under an indefinite contract of employment dated May 5, 2009. However, under clause 2.2 of her contract, it was stated that “the date of commencement of employment shall be May 11, 2009”.

The contract further stated that “the first six months of this agreement shall be the period of probation, during which period either party may terminate the provisions of this agreement for any cause and without any responsibility”.

Ms Vella was later informed that she had not reached the expected level of performance.

The tribunal, in its decision of June 16, 2012, found that the bank had terminated her employment during the period of probation. However, as during the proceedings before the tribunal, it was stated that she had underperformed, the tribunal said that Ms Vella had the right to defend herself against this accusation.

The tribunal deferred the case to continue hearing evidence on this point.

Aggrieved by the decision of the tribunal, the bank entered an appeal. It submitted that, once it was stated that the employee was dismissed during her period of probation, in accordance with article 36 (2) of chapter 452, there was nothing further for the tribunal to consider.

The argument put forward was that an employer had the right to terminate an employee’s employment without reason and, once the tribunal said that her contract was terminated during the period of probation, there was no need to consider whether the bank had a valid reason for the dismissal. Further, even if reasons were advanced, this was done without prejudice to the rights of the bank.

Ms Vella, on the other hand, disputed that she was dismissed during her probation. She reiterated her claim that her probation commenced on May 5, 2009.

She argued that the effective date was the date of contract and that the bank had to show a valid reason to justify her dismissal, once her contract was terminated outside the period of her probation.

On June 26, 2012, the Court of Appeal gave judgment by accepting the bank’s appeal. The following reasons were given for the court’s decision.

It resulted that her contract commenced on May 11, 2009, and therefore the period of probation also commenced on May 11, 2009. Once she was dismissed on November 10, 2009, this was within the period of probation and no reason needed to be given for her dismissal, pointed out the court.

Reference was made to: “Christine Bonnici vs BDO Attard Buttigieg Psaila & Co. et” (Industrial Tribunal), dated April 8, 2011.

Ms Vella’s contract of employment was terminated during her period of probation and the bank as the employer had the right to end her employment during probation without giving reasons, in terms of article 36(2) of chapter 452.

The court said that it was not necessary for the tribunal to defer the case for continuation. It was not necessary to consider whether the bank had a valid reason for the dismissal.

The bank was not obliged to give reasons for its decision and it was immaterial whether Ms Vella attained the expected level of performance.

In fact, once the tribunal declared that Ms Vella was dismissed during her period of probation, it did not have to consider whether its decision was founded on the basis of valid reasons.

Reference was also made to: “Joseph Cutajar vs Actavis Ltd” (AIC), dated October 3, 2007.

For these reasons the court accepted the bank’s appeal. The tribunal did not have to consider anything further.

The case should not be continued as the bank had terminated Ms Vella’s employment according to law.

Dr Grech Orr is a partner at Ganado & Associates.

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