In Malta, there is also a general practice that allows employers and workers to accept a consolidated wage covering the payment of all hours of work, including overtime. The question remains whether this practice is permitted in light of the overtime regulation, which does not explicitly authorize the use of bound wages at face value. However, the practice remains common, particularly for senior managers and senior managers at Level C, whose salaries exceed twice the minimum wage. Such agreements must be carefully drawn up to ensure compliance with the rules on the provision of information to workers. Recently, there have been no below-inflation wage stoppages or wage increases under collective agreements with unions and/or works councils. The absence of such cases is due to the legal wage increases associated with the annual cost of living index. However, in cases where organizations are going through difficult times, a special request for a waiver may be made to the Ministry of Labour and Employment Relations (DIER) under the responsibility of each case. It is then up to the director of DIER, the employer and the union to agree on the adoption of such mechanisms. There is no comprehensive system for indexing wages, but the government sets minimum amounts – in absolute numbers and not in percentages – that should increase wages every year. These wage increases, known as “cost-of-living adjustment” and implemented by standard national orders, are linked to inflation calculated on the basis of the retail price index. Collective agreements should include the cost-of-living forecasts on which they are based, and if the increase in the agreement is less than the cost of living adjustment, the payment must be increased by an additional amount to compensate for the difference.
Maltese law also recognises and regulates collective agreements negotiated between workers` and employers` unions, which are considered conditions of employment for the workers to whom they apply. Several European directives – such as those on the secondment of workers, the transfer of companies and collective redundancies – are transposed into Maltese legislation in the form of subsidiary laws. On the other hand, several EU regulations have a direct effect under Maltese legislation and are relevant sources of labour law without the need to implement them. These include Regulation (EC) 593/2008 and Regulation (EC) No. 1215/2012 relating to law or jurisdiction, EU regulations 883/2004 and 987/2009 on the coordination of social security systems and the EU Data Protection Regulation 2016/679. It is essential that, under Maltese law, these less favourable conditions be considered null and void when an employment contract or collective agreement provides for conditions of employment, including conditions of termination of the contract, which are less favourable for the worker than the less favourable conditions set by law and that these less favourable conditions are considered ineffective, so that more favourable legal conditions may prevail.