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Employment law changes - Ian Spiteri Bailey

The law now clearly stipulates that once annual vacation leave is agreed to, it cannot be cancelled unilaterally.

The law now clearly stipulates that once annual vacation leave is agreed to, it cannot be cancelled unilaterally.

On the eve of the feast of Santa Marija, when shutdowns were at their best, employees were on leave and employers were getting their due share of relaxation, four new legal notices on employment matters were published.

This short article is intended to give a basic knowledge of the new regulations on “annual leave” and “payslips”, while raising some points of constructive criticism for discussion.

LN 271 of 2018 (which repealed LN 38 of 1989 – Weekly Day of Rest and Annual Vacation leave Standard Order) lays down the minimum requirements to the current 200 hours of annual leave entitlement of every employee. Hence, any collective agreement or private employment agreement can stipulate different annual leave rules so long as such agreements are more favourable to the employee.

As of next year, the maximum number of leave days for shutdown purposes shall be of 12 days annually, spread over summer, Christmas, bridge holidays, etc. To this effect, HR personnel need to properly schedule such shutdowns/forced leave in advance and furthermore, should notify the employees by not later than end January of that particular year.

The remaining days of vacation leave of any employee shall be availed of by the employee in agreement with the employer. It is thus advisable that proper leave policies and procedures are in place. Such policies should cater for time frames for leave application submissions and for the approval or otherwise of such applications, identifying the responsible person who is to dis/approve leave, the forms to be filled in, the actual agreement template, etc.

The law now clearly stipulates that once annual vacation leave is agreed to, it cannot be cancelled unilaterally. It can be cancelled only by agreement between both parties.

Some exceptions should have been made by the legislator to cater for urgent unexpected situations which an employer may face and which may require the employer to ask the employee to reconsider the leave entitlement approved. After all, it is acknowledged that the employee has urgent leave entitlements under various other pieces of legislation.

An employee availing herself of maternity leave shall be entitled to annual leave, and hence, such leave will accrue in favour of the employee. Any balance of unavailed-of annual leave at the end of the year in which the maternity leave was availed of, will be carried on to the following calendar year. An employee on maternity leave is now also entitled to an additional day of leave for every public holiday or national holiday not falling on a weekly day of rest.

The legal notice further stipulates that an employee who is on sick leave or injury leave and who is unable to avail himself of vacation leave, shall not lose on his annual vacation leave, and any balance of any such vacation leave at the end of a calendar year shall be automatically transferred onto the following calendar year.

It is interesting to note also that the law now clearly states that, when an employer and employee agree on a vacation leave plan for the employee, that plan is carried on to the following year or is availed of upon the employee’s return if such employee, in the meantime, would have had to avail of any sick leave, injury leave or maternity leave.

The employee will be entitled, upon termination of employment, for compensation of all unavailed-of vacation leave accruing during a period of maternity leave, sick leave or injury leave.

Our legislator has always avoided entering the merits of the cause of sick leave. This issue plays a very relevant role within the context of this regulation, and it should have been given some thought.

Contravening these regulations is a criminal offence with a fine of €465, and the courts are now obliged to order the employer to give any leave entitlements to the employee or the equivalent in monetary compensation where the employment would have been terminated. Leave is money. Will these acquired rights by the employees translate into more costs for our employers?

The least that the employer would possibly have expected is that the curb on abuse of leave entitlements, of whatever nature, is accelerated and made more efficient. It would also have been the opportune occasion for the legislator to make it easier for an employer to terminate employment on disciplinary grounds when and if there is proven abuse of any leave entitlement.

Many practical issues and difficulties can already be predicted. Why, one would ask, would the legislator fail to see them?

The legislator could also have taken the opportunity to facilitate the recovery of overpaid days of leave, work, bonuses or other employee entitlements which create unjustified enrichment in favour of the employee. Rather than keeping the status quo, with the employer having to seek legal redress against his employee, it would have been opportune to, within a proper framework, legislate to facilitate the recovery of such unjustified overpayments.

Which brings us to the “payslip regulations” – since recovery by the employer of any dues by the employee may now well be very well accounted for in the payslip as per the new regulations.

The legal notice establishes, under pain of criminal responsibility and sanction, what the payslip is to include and the clear unequivocal obligation of the employer to give a payslip to the employee with every salary paid.

The name of the employer, name of the employee, address of the employer and the designation of the employee, the total wages paid and the breakdown of such total, the period in respect of which such payment is made, were all pretty much found in properly issued payslips till today.

The law now wants that every payslip includes also the number of normal hours worked, including Sundays and public holidays when these are part of a working schedule, a breakdown of the number of overtime hours or special rate hours worked, the number of annual leave hours availed of and the remaining balance and the number of sick leave availed of during the calendar year, the basic wage received (distinguished from any allowances, bonuses, etc), but also a breakdown of such bonuses and allowances or commissions and all deductions made, including but not limited to tax and NI.

The legal notice states that “any person” (who else if not the employer?) will be subject to a fine of between €500 and €1,165 if found guilty of contravening these regulations. Furthermore, the onus of proof is shifted on the employer who, in case of criminal charges issued against him, has to prove beyond reasonable doubt that he is not liable at law for “payslip contraventions”. Much against the norms of “presumed innocent until proven guilty” and “the prosecution is to prove its case beyond reasonable doubt”.

Whereas all measures should be taken to curb abuse of employers over their employees and vice-versa, however, shifting this responsibility/onus on the employer can be seen as being one step too far, creating an imbalance rather than a level playing field.

To my knowledge, at the time of writing, employers’ associations have not yet voiced any concerns or opinions.

The scope of this article was intended to be informative but some issues are inevitable. Many practical questions arise. Many practical issues and difficulties can already be predicted. Why, one would ask, would the legislator fail to see them?

What discussions, if any, between the social partners have been held remains unknown to me. If there was lack of discussion and agreement, then there certainly are issues which need to be addressed quickly.

If these regulations are the result of discussions and agreements, then time will tell as to whether these regulations have struck a practical balance between the rights of the employees and the obligations of the employers.

What is certain is that as things stand, employers have some added work to perform before the next shut down, be it Christmas or the next Santa Marija feast.

Ian Spiteri Bailey is an employment and industrial relations lawyer and a workplace mediator.

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