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In April of last year, mandatory supplements were introduced for those earning the minimum wage, (and for those who earn slightly more than the minimum wage but less than the new minimum wage with the €3 supplement), by means of amendments to the National Minimum Wage National Standard Order (S.L. 452.71). The supplements are to be paid weekly upon completion of the first year of employment and another supplement is to be paid upon completion of the second year of employment.

What is interesting to note is proviso (5) to regulation 4 of the Standard Order which effectively limits the right of the employer not to renew a fixed-term employment contract upon expiration. The proviso states that employees who are entitled to the mandatory supplements and who are engaged on a definite contract of employment cannot be substituted by another employee upon the expiration of their contract for up to one year from the date of expiration, unless the employer informs the employee that there is a good and sufficient cause to substitute the employee and gives such reasons in writing. Another interesting provision is that if employees entitled to the mandatory supplement are offered a new employment contract within the period of 6 months from the expiry of the first contract, the two periods are to be considered as one continuous period (in line with the method of calculation of ‘continuous employment’ in terms of the Contracts of Service for a Fixed Term Regulations). The aim of these provisions is to ensure that the employer does not avoid paying the mandatory supplements by employing workers on one-year fixed term contracts which are then not renewed and replacing them with new employees.

This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr. Christine Calleja.