Employment In Malta In 2026: When The Relationship Matters More Than The Label

By 2026, Maltese employment law has reached a defining moment. The legal framework itself has not radically changed, yet the way it is applied has become sharper, and significantly less tolerant of ambiguity. Nowhere is this more evident than in disputes concerning employment status, written conditions of work, and working-time boundaries in a digitally connected workplace.

The Employment Relationship: More than a Contract

Maltese law has long recognised that an employment relationship is characterised not by labels, but by substance. The Employment and Industrial Relations Act (Chapter 452) anchors employment protection in the existence of work carried out personally, for remuneration, and under the direction and control of another person. While this formulation appears straightforward, its application in 2026 has become increasingly nuanced.

Disputes today frequently centre on classification. The distinction between employee and self-employed contractor remains one of the most contested areas before the Industrial Tribunal, particularly in sectors such as logistics, digital services, care, hospitality, and professional services. In these cases, Maltese adjudicating bodies continue to adopt a functional assessment, examining how the relationship operates in practice rather than how it is described in contract.

Control remains central. Who determines working hours? Who allocates tasks? Who bears commercial risk? Who provides the tools and infrastructure? Alongside control, economic dependence, integration into the organisation, and exclusivity continue to carry substantial weight.

Recent Industrial Tribunal decisions have confirmed that the absence of formal documentation does not prevent an employment relationship from existing. Where work is performed, remuneration is paid, and direction is exercised, tribunals are increasingly willing to find that employment subsists. For 2026, this carries a clear warning: long-standing "contractor" arrangements that mirror ordinary employment roles present escalating legal risk.

A recent Industrial Tribunal decision that illustrates this evidential approach is Absolute Services Ltd v Ma. Genia Montecioso (Decision 3058, 10 March 2025). The case concerned the termination of a fixed-term contract. During the proceedings, evidence showed that the claimant had begun performing work for the company and was paid for that work before all formal documentation and registration processes were completed.

The Tribunal examined the factual sequence of events, including when work commenced, how duties were carried out, and the existence of remuneration, rather than treating the timing of formal paperwork as decisive. Although the dispute itself did not turn on employment status, the decision reflects a consistent principle in Maltese employment law: where work is performed for pay under an employer's direction, administrative formality alone does not determine the existence or scope of the employment relationship.

A Way Forward for 2026: Structure, Clarity, and Anticipation

Employment compliance in 2026 requires more than reacting to disputes. It demands anticipation.

• Classification audits are essential. Employers should critically assess contractor and freelance arrangements against statutory indicators, ensuring that form reflects reality and that genuine independence exists where claimed.
• Modernised written terms are no longer optional. Contracts and handbooks should address hybrid work, working-time boundaries, overtime mechanisms, data use, confidentiality, and availability expectations in practical, operational language.
• Employers should move toward "disconnect by design." Even before explicit legislation is enacted, internal policies that respect rest periods, define escalation protocols, and train managers accordingly will significantly reduce exposure.

How BDO Malta can support Employers in 2026

BDO Malta's Legal Advisory team is uniquely positioned to support employers navigating these evolving risks. Through integrated legal and advisory expertise, BDO assists organisations in:

• Reviewing employment status and contractual models to ensure alignment with Maltese law and tribunal practice
• Drafting and updating employment contracts, policies, and handbooks that reflect modern working realities
• Advising on working-time compliance, remote-work structures, and availability expectations
• Supporting employers in managing disputes, investigations, and Industrial Tribunal proceedings with a focus on prevention rather than reaction

Employers who invest in clarity, consistency, and foresight will not only reduce legal risk, but build more sustainable working relationships.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.