Luana Farrugia M. Adv

The Covid-19 pandemic has severely impacted businesses, companies and workplaces, virtually wiping out certain industries and leading to individual redundancies. The Industrial Tribunal has held that, as a general rule, redundancies should only be acceptable in certain situations, and in a particular decision, listed four criteria which would justify this course of action:

1. Redundancy must be due to a lack of work, which results in lower financial income;
2. There must be a general or specific change in work which requires different skills and competencies;
3. There must be a change in the nature of the work resulting from restructuring which is necessary for the improvement of the company’s functions, and;
4. A restructuring plan clearly shows the real necessity of reducing the number of employees.

Of considerable importance is the notion laid down by the Tribunal that if the reason for redundancy is the abolition of the post, it must be adequately proved that the role in question has to be abolished. It cannot be shown that the responsibilities and duties borne by that role were absorbed by and distributed to other roles.

Individual redundancies are subject to the following rules:

1. RIGHT OF FIRST REFUSAL

The Employment and Industrial Relations Act (“the Act”) explains that a contract of service for an indefinite time may be terminated on grounds of redundancy by giving notice and the employee would then be entitled to being offered the same job if the same post becomes available within one year of the redundancy.

2. SAME CONDITIONS TO APPLY IN CASE OF RE-EMPLOYMENT

Should the employee be re-employed within 12 months following redundancy, the working conditions cannot be less favourable than those in force during the period of employment  and the re-employment shall be considered to be a continuation of the original employment..

3. LAST IN, FIRST OUT

The vitally crucial principle of redundancy, ‘last in, first out’ is established in our law. This essentially means that an employer is not allowed to pick which employee is to be declared redundant but must terminate the employment that person who was engaged last in the class of employment affected by redundancy.

The rule means that the employee to be declared redundant is not necessarily the last employee to be employed, if the position occupied is not going to be abolished. The terminated employee must be the last one recruited in a particular class or category as defined in a collective agreement, or, if no collective agreement exists, by reference to the work performed by the various employees. Therefore, if two employees have different titles or names to their post, but realistically perform the same work, the employee rendered redundant would be that one who was last employed.

This rule is subject to one exception  – where an employee is related  to the employer by consanguinity or affinity up to the third degree, the employer may, instead of terminating the employment of that person who would have been the last one employed, terminate that of the person next in turn. However, this exception does not apply if the employer is a limited liability company or a statutory body.

The information provided does not constitute legal advice.

Should you require specific advice, please do not hesitate to contact us on covid19@vallettalegal.com