TRANSFER OF BUSINESS (PROTECTION OF EMPLOYMENT) REGULATIONS

SUBSIDIARY LEGISLATION 452.85

TRANSFER OF BUSINESS (PROTECTION OF

EMPLOYMENT) REGULATIONS

1st January, 2003

LEGAL NOTICE 433 of 2002, as amended by Legal Notices 427 of 2007,

195 of 2010, 129 and 443 of 2011, 363 and 467 of 2012, 483 of 2014, and

285 of 2017.

The title of these regulations is the Transfer of Business

(Protection of Employment) Regulations.

(1)

For the purposes of these regulations -

"Act" means the Employment and Industrial Relations Act;

"service provision change" means a situation in which

(i)

activities cease to be carried out by a person,

hereinafter referred to as a "client", on his own behalf

and are carried out instead by another person on the

client’s behalf, hereinafter referred to as a

"contractor";

(ii

activities cease to be carried out by a contractor on a

client’s behalf, whether or not those activities had

previously been carried out by the client on his own

behalf, and are carried out instead by another

subsequent contractor on the client’s behalf; or

(iii) activities cease to be carried out by a contractor or a

subsequent contractor on a client’s behalf, whether or not

those activities had previously been carried out by the

client on his own behalf, and are carried out instead by

the client on his own behalf;

"transfer" means a transfer of an undertaking which retains its

identity as an organised group of resources having the objective of

pursuing an economic activity and shall include a service provision

change in accordance with these regulations;

"transferee" shall mean any natural or legal person who, by

reason of a transfer, which includes a service provision change,

becomes the employer in respect of the undertaking or part of the

undertaking so transferred;

"transferor" means any natural or legal person who, by reason of

a transfer of the undertaking or part of the undertaking, which

includes a service provision change, ceases to be the employer in

respect of the undertaking or part of the undertaking so transferred.

(2) Subject to the provisions of subregulation (1), terms and

expressions used in these regulations shall, unless the context

otherwise requires, have the meaning assigned to them in the Act.

(1)

Article 38 of the Act and these regulations shall apply

(a) to any transfer of an undertaking, business, or part of

an undertaking or business to another employer as a

result of a legal transfer or merger

Provided that there is a transfer within the meaning of

this regulation whenever there is a transfer of an

economic entity which retains its identity, with the

objective of pursuing an economic activity;

(b) to a service provision change;

(c) to any undertaking engaged in economic activities

whether or not that activity is central or ancillary and

whether or not it is operating for gain;

(d) where and in so far as the undertaking, business or part

of the undertaking or business to be transferred is

situated in Malta;

(e) to a transfer of a seagoing ship that is part of a transfer

of an undertaking, business or part of an undertaking

or business within the meaning of this regulation

Provided that the transferee is situated, or the

transferred undertaking, business, or part of an

undertaking or business remains within Malta

Provided further that article 38 of the Act and these

regulations shall not apply where the object of the

transfer consists exclusively of one or more seagoing

ships.

(2) Article 38 of the Act and these regulations shall not apply to

an administrative reorganisation of public administrative authorities,

o r th e t r a n s f e r o f ad m in i s tr a t iv e f u n c ti o n s b e tw ee n p u b li c

administrative authorities.

(3) A transfer of an undertaking or part of an undertaking in

terms of these regulations

(a) may be effected by more than one transaction; and

(b) may take place whether or not any property, movable

or immovable, is transferred to the transferee by the

transferor.

(1) After a transfer, the contract of employment of each

person employed by the transferor shall have effect as if originally

made between the person so employed and the transferee.

(2) On the completion of a transfer, all the transferor’s rights,

powers, obligations and liabilities under or in connection with any

contract of employment referred to in sub-regulation (1) shall be

transferred to the transferee

Provided that the transferor shall be civilly liable to reimburse

the transferee for the payment o f th e pro rata an nual leave

entitlement not availed of during employment with the transferor in

respect of the period during which the transferor was the employer,

whilst the transferor shall have the civil right to be reimbursed by the

transferee in respect of any annual leave which had been granted to the

employee by the transferor prior to the date of transfer which was in

excess of the pro rata entitlement of annual leave till the date of transfer

Provided further that in the case where employees who

were employed in the business or part of the business to be

transferred have been made redundant prior to a transfer of

business which would have otherwise resulted in the transfer of

their em plo ymen t with the transfer ee, the transferee has an

obligation to re-employ, with the same conditions of employment,

such employees if their previous posts become available within one

year from the notice of redundancy according to and in terms of

article 36 of the Act and the transferor shall provide all the

necessary information in order for the transferee to be able to abide

by this requirement.

The transferor shall effect payment and settle any dues

owed to the employees affected by the transfer in relation to the

employment relationship with the transferor in respect of any

wages, pro rata bonuses and weekly allowances due up to the end

of the relationship with the transferor, by the next pay date falling

immediately after the transfer of the undertaking or part of the

undertaking which would have been the next pay date had the

employees concerned been still in an employment relationship with

the transferor.

Article 38(2) of the Act shall only apply to those

undertakings or to those parts of undertakings that are being

transferred and that employ more than twenty employees, including

all full-time and part-time employees

Provided that notwithstanding anything stated in the Act

and in th ese reg ulations, an d irrespective of th e size of the

workforce, the transferor shall provide information about the

conditions of employment of every employee to the transferee,

which information shall always include a copy of the contract of

employment or written statement in terms of the Information to

Employees Regulations, and the information provided by the

transferor to the transferee in respect of a particular employee shall

also be given to that employee and shall be provided by the

transferor to the transferee within five working days from the date

of identification of the transferee or by the date of the transfer of

business, whichever is the earlier.

(1) For the purpose of these regulations, article 38(1) and

(3) of the Act shall apply in relation to employees’ rights to old

age, invalidity or survivors’ benefits under supplementary company

pension schemes outside the provisions of the Social Security Act.

(2) The transfer of the undertaking, business or part of the

undertaking or business shall not in itself constitute sufficient

grounds for dismissal of employees by the transferor or the

transferee

Provided that this provision shall not stand in the way of

d i s m i s s a l s t h a t m ay ta k e p l ac e f o r e c o n o m i c , t e c h n i c a l o r

organisational reasons entailing changes in the workforce.

(3)

Whenever a transfer which involves a substantial change in

working conditions to the detriment of the employee results in the

termination of the contract of employment, the employer shall be

regarded as having been responsible for such a termination.

(4) If the undertaking, business or part of an undertaking or

business preserves its autonomy, the status and function of the

employees’ representatives of the employees affected by the

transfer shall be preserved on the same terms and subject to the

same conditions as existed before the date of the transfer.

(5) If the term of office of the representatives of the employees

affected by the transfer expires as a result of the transfer, the

representatives shall continue to be considered and recognised as

such and enjoy the protection provided by the Act until such a time

as a new representative is in place.

(1) Without prejudice to what is stated in the proviso to

regulation 4, for the purposes of article 38(2) of the Act, the

transferor and the transferee shall be bound to give the information

therein specified by means of a written statement containing all the

information specified in article 38(2) of the Act.

(2) The written statement mentioned in the preceding

subregulation is to be delivered to the employees’ representatives

at least fifteen working days before the transfer is carried out or

before the employees are directly affected by the transfer as regards

their conditions of work and employment, whichever is the earlier.

(3) The obligations laid down in article 38(2) of the Act and in

the preceding subarticles shall apply irrespective of whether the

decision resulting in the transfer is taken by the employer or an

undertaking controlling the employer.

(4) In considering alleged breaches of the information and

consultation requirements laid down in these regulations, the

argument that such a breach occurred because the information was

not provided by an undertaking controlling the employer shall not

be accepted as an excuse.

Without prejudice to what is stated in the proviso to

regulation 4, the transferor and the transferee shall also be bound to

forward to the Director responsible for employment and industrial

relations, a copy of the written statement mentioned in regulation 6

o n t h e s a m e d a y t h a t th e s e ar e n o t i f i ed t o t h e e m p l o y ee s ’

representatives.

In those cases where the transfer includes measures

a ff e c t i n g t h e c o n d i t io n s o f e m p lo y m e n t o f t h e t r a n s f e r r e d

employees, consultations between the transferor, the transferee and

the employees’ representatives shall begin within seven working

days from the day on which the employees’ representatives have

been notified of the intended transfer and such consultations shall

cover the impact of the transfer on the employees’ conditions of

employment.

Any person contravening the provisions of these

regulations shall be guilty of an offence and shall, on conviction, be

liable to a fine of not less than one thousand and one hundred and

sixty-four euro and sixty-nine cents (1,164.69) for every employee

that is affected by the transfer.