Employment Agencies Regulations, 2023
The new Employment Agencies Regulations were published on the 23rd November 2023 through Legal Notice 270 of 2023. These Regulations will come into force on the 1st April 2024 and shall effectively repeal the previous Employment Agencies Regulations (Subsidiary Legislation 594.18) on the same day as published through Legal Notice 271 of 2023.
These new regulations target employment agencies that act as recruitment agencies for employment in Malta or outside Malta, temporary work agencies and outsourcing agencies. These regulations set conditions for such operations and oblige such agencies to hold a valid licence issued by the Director General of Employment and Industrial Relations (DIER) or any officer within the Department acting on behalf of the Director.
Recruitment by an employer for his undertaking, recruitment by agencies on behalf of any employer whose identity is specified in an advertisement, by Jobsplus while carrying out the functions of an employment agency and outsourcing agencies offering professional, technical and surveying services are exempt from the application of these regulations.
The employment agencies captured under these regulations shall apply for a licence as of the 1st of January 2024. However, there is a transitory period for current employment agencies with a valid licence to continue their operations until such licence expires.
Application for licence to operate as an employment agency has to be submitted to the DIER and should include the details of the applicant, the VAT registration number, Income Tax registration number and a good standing certificate in respect of companies, address of the place where the activity is being carried out and detailed information of such activities. A recent tax compliance certificate shall also accompany such application. The fee for a first-time applicant is €3,000, while a fee of €1,500 is applicable for renewal.
A licence to operate as an employment agency shall be issued by the DIER for one year. Such licence can be renewed for further periods of one year or for a more extended period that cannot exceed two years.
For such a licence to be issued, a competent person who shall be responsible for the management of the employment agency needs to be identified. Such a person has to be either a Maltese/EU citizen or a person entitled to equal treatment to Maltese citizens and be resident in Malta. Furthermore, the competent person needs to be qualified and/or experienced in managing human resources as provided by the regulations.
Before the commencement date of the licence, the relevant agency shall provide a bank guarantee in favour of the Administration Board that will be set up under these regulations for the amount of €20,000 for agencies with less than 20 employees. For agencies with more than 20 employees, the amount is set for €20,000, a sum equivalent to 2% of the total annualised wages of all employees, up to a maximum of €300,000. Such sum would be released within three months of termination or non-renewal of the licence provided that all obligations under the licence and these regulations are met.
Refusal or Revocation of Licence
The DIER may refuse an application or renewal. It may also revoke or vary the conditions of a licence whereby the applicant breaches any of the provisions. This is done through a public statement, including the disclosure of the name of the person sanctioned, the particular breach of the regulations and the punishment or measure imposed. This may include the forfeiture of the bank guarantee in favour of the Administration Board and deposited into the Agencies Guarantee Fund.
The DIER will notify the Identity Malta Agency of such facts, which will not accept applications from the sanctioned employment agency and the Malta Police Force. Furthermore, the DIER would also notify the Director of Contracts for such sanctioned person to be blacklisted and thus prohibited from being given a public contract.
Any person in breach of these regulations shall be guilty of an offence and, on conviction, liable to a fine ranging from €5,000 to €7,000. Suppose such an offence consists of operating such employment agency without a licence on conviction. In that case, the fine liable is €25,000 up to €30,000.
written by Charlene Baldacchino Gauci and Alan Bonnici
For more information you can contact one of our Team Members at Mifsud & Mifsud Advocates.