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Termination of Employment for Good and Sufficient Cause

 

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In the case of Joseph Saliba vs Imperial Hotel (Goldvest Company Limited), the facts of the case revolved around Mr Saliba who was employed in various positions within the Hotel Imperial in Sliema until such hotel was acquired by Goldvest Company. Mr Saliba remained employed at the Hotel serving as the General Manager however issues arose between the Managing Director of Goldvest Company and Mr Saliba, and his employment was terminated suddenly due to alleged mismanagement, insubordination and refusal to follow instructions.

The Industrial Tribunal had initially given a decision stating that termination was not justified and set damages at €24,386. The company appealed from this decision, on the grounds that the Tribunal has not provided sufficient reasons on which it had based its decision and that it had not examined the issue from the perspective of the various incidents which had arisen during the employment and the warnings issued subsequently to the incidents. The Court of Appeal noted that as per Article 78(3) of the Employment and Industrial Relations Act the Tribunal could reach its conclusions on any matter in such a manner as it deems appropriate and was thus entitled to evaluate the elements collectively. In this case, however, the Court of Appeal decided that the Tribunal was under an obligation to at least clarify what reasons had resulted in the decision taken. Thus, the Court of Appeal annulled the sentence and sent the case back to the Industrial Tribunal.

The Tribunal analysed the facts of the case once again, and decided that the termination was not justified given that no serious warning had been issued prior to termination however it also stated that since the Managing Director has lost faith in such a senior employment position, the company had a right to terminate the employment as long as compensation as given for such termination. The Tribunal also noted that the previous liquidation of damages was too high and amended the sum to €9,000.

This decision was in turn appealed by Mr Saliba on the grounds that the Tribunal reached the wrong legal conclusions when it stated that the company had a right to terminate employment because it lost faith in its employee.

The Court of Appeal upheld Mr Saliba’s appeal and confirmed that the decision taken by the Industrial Tribunal was legally mistaken and in breach of the Employment and Industrial Relations Act, which states that dismissal may only be made for good and sufficient cause. The Court of Appeal explained how the Tribunal was mistaken to initially decide that the termination was unjust, and subsequently justifyed the company’s termination due to its loss of faith in the employee as long as compensation was paid to the employee. The Court of Appeal liquidised the damages at €15,000.

This interpretation follows a principle established in Maltese employment law where an employer may not terminate an indefinite employment relationship with the employee unless there is a good and sufficient cause for such termination. Various case law decided over the years, have established what circumstances the Industrial Tribunal deems to constitute a good and sufficient cause for termination.

For further information about how GVZH Advocates can help you with your employment law query, kindly contact us on employment@gvzh.com.mt.

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