Employment 2021 Comparisons

Last Updated September 07, 2021

Contributed By S&A Lawyers LLP

Law and Practice

Authors



S&A Lawyers LLP is a market-leading law firm specialising in corporate and commercial law, providing legal services to key government agencies, international financial institutions, and large local and multinational corporations. The firm provides a broad range of services on matters pertaining to employment law in the Maldives, including general advice on employment agreements and policies, dismissals, employment benefits and incentives, disciplinary and discrimination matters, and regulatory compliance. The firm mostly represents employers from the tourism industry in the Maldives – the industry consisting of the greatest number of employees. The firm has represented its clients in all aspects of employment law and many cases have been recognised as landmark cases in the legal landscape of employment law.

Employment Law Changes in the Past 12 months

The main change in employment law that has been enacted over the past 12 months has been the amendment to the Employment Act of the Maldives on 22 September 2020 This was the first substantial amendment to the Employment Act of the Maldives in over ten years. The subsequent regulations introduced under the amendment to the Employment Act were published on 9 May 2021. Together these have brought substantive changes to employment legislation in the Maldives, which are summarised below.

Codification of redundancy law

While redundancy has been recognised by Maldivian courts as a justified ground for dismissal since 2011, it was not codified into legislation until the amendments in 2020. This amendment to the Employment Act identified the following.

  • An employer may lawfully terminate an employee in any of the following redundancy situations.
    1. A service or business of the employer is discontinued – an employee directly involved in a service or business that is discontinued may be terminated for reasons of redundancy. Similarly, if an employee is indirectly involved in a discontinued service or business of the employer, the employee may be made redundant if 50% or more of the work carried out by the employee is directly related to the discontinued service or business. A service or business would not be deemed discontinued if the employer resumes the service or business within a minimum period of 12 months from the time of termination.
    2. Restructuring of the employer’s operations – in order for a position to be made redundant due to an organisational restructuring, that position or function carried out by the position shall not be reintroduced for a minimum period of 12 months.
    3. A position is removed from the organisation due to the worsening of the employer’s financial situation – the regulations define the worsening of a financial situation to mean if the employer is facing reduced revenue for a period of no less than six months or where an employer predicts that it would face a revenue reduction for a period of no less than six months in the future. The Public Health Emergency Act introduced an additional requirement to demonstrate that in COVID-19-related redundancies, the employer should demonstrate that the reduction in revenue was to such an extent that the employer was unable to compensate the employees at the same level that it had done prior to the COVID-19 pandemic.
  • The amendment to the Employment Act also introduced a statutory obligation to act in good faith to ensure that redundancy does not target any individual or group of employees.
  • The amendment to the Employment Act also introduced minimum notice periods or payment in lieu of notice that should be provided by the employer prior to terminating an employee on the ground of redundancy. The notice period is dependent upon the duration of employment service.

Medical leave

An employee is entitled to paid medical leave of up to 30 days annually. The employee is allowed to take medical leave for two consecutive days without the requirement to present a medical certificate up to 15 of these entitled paid medical leave days. However, beyond the 15 days, the employer reserves the right to require the employee to present a medical certificate from a registered practitioner prior to granting the paid medical leave.

Service charge

The new amendment made it compulsory for all tourism-related businesses to charge a service charge of not less than 10%. Service charges are to be collected and distributed equally amongst all employees.

Minimum wage

The newly introduced clause on a minimum wage states that the government is allowed to determine the minimum wage for all employees working in the Maldives. A Minimum Wage Advisory Board was established to research and advise the government on the minimum wage based on different industries in the Maldives. The minimum wage for Maldivian employees is to be introduced before the end of 2021. The minimum wage for expatriates working in the Maldives is to be introduced before September 2022.

Exempted employees

Prior to the amendment to the Employment Act, certain groups of employees – including senior management, imams, sea and air vessel crews, persons working on emergency situations and on-call duty – are exempt from the entire chapter on rights under the Employment Act. The new amendment to the Employment Act revised the exemption clause limiting the groups of employees to only be exempt from the provisions relating to working hours and overtime payment. The most significant implication of this amendment is that the exempted employees are now able to claim the rights under the Employment Act, particularly the right not to be terminated without cause and the right to file a complaint with the Employment Tribunal.

Record of working hours

The new amendment introduced a statutory obligation to maintain working hour records of all employees and have this information available to the Labour Relations Authority upon request.

Key Employment Cases during the Past 12 Months

The Supreme Court of the Maldives has decided a record number of employment-related cases over the past 12 months. In doing so, the court has set new precedents, reconsidered the interpretation and application of the law, and brought, to an extent, much-needed clarity and consistency. The most significant decisions are as follows.

Factors affecting reinstatement

Reinstatement is the most commonly awarded remedy for unjustified dismissal.

MACL v Jabir Abdul Rahman is the leading authority on reinstatement. In this case the Supreme Court noted that reinstatement is an equitable remedy (similar to specific performance), and gave an indicative list of circumstances that may prevent reinstatement, and list of factors where an order for reinstatement is justifiable.

Circumstances that may inhibit reinstatement are:

  • loss of trust and confidence between the employer and the employee to the extent that such cannot be restored;
  • excessive delay/lapse of time (guidance on this has been provided in the cases discussed below);
  • the size of the employer’s organisation is too small for reinstatement to be feasible; and
  • reinstatement is impractical due to (i) a worsening of the employer’s financial status, or (ii) a significant change in the employer’s business.

The circumstances in which reinstatement is justifiable are:

  • where there is no previous record of similar misconduct, and where a warning (as a disciplinary action) is more appropriate;
  • where it is impossible to find employment elsewhere due to a special characteristic of the employee; and
  • where failure to reinstate implies acceptance of an unjustified action of the employer.

The Supreme Court has further elaborated that reinstatement is not an appropriate remedy:

  • if the employee has access to proprietary and confidential information;
  • if the employee has significant power and authority over the affairs of the employer;
  • where the business of the employer depends on the trust and confidence placed in the employee; and
  • if there are reasonable doubts about trust and confidence.

Following the decision in MACL v Jabir Abdul Rahman Abdulla, the Supreme Court decided reinstatement is not a suitable remedy in the case of Abdulla Jamiu v State, in which 11 years elapsed between the date of dismissal and the final verdict.

In contrast, in Abdul Muizzu Musthafa v State, the Supreme Court of the Maldives decided that termination was unfair and ordered reinstatement to the same job despite the fact that seven and a half years had passed between the date of termination and the final decision on appeal.

Compensatory award

The most common remedy for unfair dismissal is reinstatement. The tribunal’s award for reinstatement is in addition to an award of back pay from the date of dismissal to the date of reinstatement (or, in some instances, from the date of dismissal to the date the tribunal order is made). The award is usually limited to contractual pay and benefits.

In Hussain Nazeef v Civil Service Commission, the Supreme Court decided, breaking new ground, that the employee may claim additional compensation where the actions of the employer caused loss of reputation (stigma), and as a result they were unable to find other employment.

Following Hussain Nazeef v Civil Service Commission, there have been several cases in which the Supreme Court has made a finding that a separate claim for compensatory award may be filed by the parties.

Unjust enrichment and the factors to consider in determining compensation

In Abdul Muizzu Musthafa v State, the Supreme Court decided to reinstate the employee, but refused to limit the amount of compensation to 12 months’ salary and allowance as submitted by the respondent (the State). The court took the view that it may not limit the compensation to a defined duration, or set a cap on the compensation on the basis that the Act has not set such a limit on the amount of compensation.

In this case, the Chief Justice considered the position of law in other democratic countries in deciding the limitation of compensation. The court recognised the importance of statutory intervention in this area of law, making particular reference to the position in English law and Australian law. The factors considered in determining compensation by the justice in this case were to uphold the principles of natural justice while ensuring there is no unjust enrichment.

In this case, the Supreme Court found that the employee is entitled to compensation, and he may file a new case in the appropriate court, and gave the following factors to consider in determining compensation:

  • nature of the job;
  • length of employment;
  • salary and allowance;
  • the extent of the employer’s unjustifiable conduct;
  • employability of the employee, considering age;
  • contributory factors of the employee leading to termination;
  • any action to mitigate loss (such as reasonable efforts to find another job/other work);
  • in cases where the primary remedy of reinstatement is awarded, if any award of financial compensation/back pay leads to unjust enrichment; and/or
  • where financial compensation is awarded considering the above, whether to award back pay, or to award additional compensation if the termination was due to exercising a right.

It is yet to be seen how the court will apply these factors in awarding compensation.

Duty to mitigate loss

In Maldives Airports Company Limited v Ashfag Waheed, the court decided that it is not mandatory to award back pay for the entire duration from the date of dismissal to the date of reinstatement. The court further noted that the general contractual duty to mitigate loss is applicable to an employee who has been unfairly dismissed. Accordingly, in determining "the amount that the tribunal/court considers just and equitable in the circumstances", the court must consider employment/work after dismissal, if any, and the time it usually takes to find alternative employment, and to avoid unjust enrichment.

Discrimination on grounds of nationality

In Nafiu Abdul Rahman & Others v Trans Maldivian Airways (TMA), the Supreme Court decided that payment of a living allowance to expatriate pilots does not amount to discrimination.

In this case, Nafiu Abdul Rahman and other Maldivian pilots who worked at TMA claimed, among other matters, that they are equally qualified, have comparable experience, and did the same job as pilots of TMA, which was not denied. They claimed that the payment of a "living allowance" to expatriate pilots only amounts to discrimination, contrary to the Maldives Constitution and the Employment Act.

The applicable laws are as follows.

  • The Constitution provides that "everyone is entitled to just and safe conditions of work, fair wages, equal remuneration for work of equal value, and equal opportunity for promotion" (Article 37).
  • The Employment Act provides that ”it is prohibited to discriminate amongst persons carrying out equal work either in the granting of employment, determination of remuneration, increase in remuneration, provision of training, determination of conditions and manner of employment, dismissal from employment or resolution of other employment related matters, based on race, colour, social standing, religion, political beliefs or affiliation with any political party, sex, marital status, family obligations, and in so far as it does not contravene the provisions herein age or disability”.
  • The Expatriate Employment Regulation 2009 requires that the employer must provide food and accommodation to expatriate employees.
  • The Constitution provides that "Regulations derive their authority from laws passed by the People’s Majlis pursuant to which they are enacted, and are enforceable pursuant to such lawful authority. Any regulations requiring compliance by citizens must only be enacted pursuant to authority granted by a law enacted by the People’s Majlis" (Article. 271).

In dismissing the appellant’s case, the Supreme Court found that the payment of an accommodation allowance to expatriate pilots was in order to meet the regulatory requirements, rather than based on the "race" or nationality of the Maldivian pilots.

It has to be noted that “salary” or remuneration is defined in the Employment Act as “... payments made to the employee by the employer as wages, other benefits, allowances and other financial benefits relating to the employment, either in cash or other valuable consideration”.

As a consequence of this decision, it is now lawful for employers to pay additional allowances to expatriate employees for their food and accommodation, and thereby effectively pay a higher "salary" to expatriates with same qualification and experience, doing same work as a Maldivian employee. This decision has far-reaching consequences in a country where the expatriate working population is significant as a percentage of the total workforce.        

The Parliament enacted special legislation under the Public Health Emergency Act 2020 (the “PHE Act”) to address the wide range of social and economic matters resulting from the COVID-19 pandemic. While the PHE Act was enacted on 22 September 2020, the provision requires the Act to be applied retroactively from the date on which the State of Public Health Emergency was declared in the Maldives in March 2020.

Chapter 2 of the PHE Act 2020 addressed the rules relating to the administration of special leave and any amendment or termination of an employment contract as a result of the economic hardship caused by COVID-19. These are discussed in more detail below.

Special Paid Leave

All employees are entitled to special paid leave, without the requirement to present a medical certificate under specific circumstances where the employee is required to quarantine or where the employee is unable to travel (within the Maldives) due to any action or steps taken by the government of the Maldives. These could include circumstances where an employee is required to self-isolate or quarantine where:

  • an employee travels from an international destination or from a certain identified island within the Maldives;
  • an employee presents symptoms related to COVID-19;
  • an employee tests positive for COVID-19;
  • an employee is the primary care-giver of a family member who has tested positive and is therefore required to care for the family member; or
  • an employee is unable to travel to work due to the travel restrictions imposed by the authorities; for example, the island is placed on monitoring conditions whereby the inhabitants are not allowed to enter or leave the island.

While an employee is not required to present a medical certificate, the law requires an employee to present the written instructions from the relevant government authority prior to claiming special leave.

Amendment to Employment Agreements and Redundancy

The PHE Act allows an employer to amend or terminate an employment agreement where an employer is unable to remunerate its employees at the same level as it had done previously due to a reduction in the employer’s revenue as a result of COVID-19. The PHE Act states that any amendment to the employment agreement – in particular, any amendment to an employee's compensation or leave entitlement – is only effective upon the written consent of the employee.

If any employee is being made redundant due to a worsening of the employer’s financial situation as a result of COVID-19, the employer should uphold procedural fairness prior to making the position redundant. The PHE Act requires the employer to take the following actions.

  • Notify the employees of the requirement to carry out redundancies amongst the selected groups of employees.
  • Inform the employees of selection criteria and the procedures that will be applied in selecting employees who will be made redundant.
  • If an employee is selected to be made redundant, that employee is to be given clarification as to the reason why the employee has been selected and is being made redundant. The employee is to be provided notification or payment in lieu of notice in accordance with the Employment Act.
  • If an employee is made redundant, all moneys due – including allowances, holiday pay and overtime pay – are to be paid to the employee at the time of terminating the employment.

Limitation Period

The PHE Act extended the time period in which a complaint is allowed to be filed with the Employment Tribunal relating to any of the provisions of the PHE Act. An action can be brought against an employer within 90 days of such action or within 30 days of the end of the public health emergency status, whichever is later. It should be noted that the public health emergency status continues at the time of writing this article.

In addition to the legislative changes, the Maldivian government, in an attempt to reduce the pandemic's impact on businesses and employees, introduced an Economic Recovery Plan of MVR2.5 billion. The government introduced working capital loans for tourist resorts, other businesses and freelancers through the Bank of Maldives and the SME Development Finance Corporation, where priority is to be given to resorts and businesses with a higher Maldivian ownership ratio and those that have not dismissed local employees or forced employees to go on unpaid leave.

The deferment of loan repayments and interest payments for a period of six months by the Bank of Maldives and the SME Development Finance Corporation, pursuant to this plan, also indirectly assists employers in keeping up with salary payments to their employees.

The government also introduced a special allowance to employees who were made redundant or placed on unpaid leave. This was the first time the Maldives had introduced an unemployment benefit in the Maldives. The government had initially given the benefit to unemployed individuals for a period of three months from April 2020. Individuals who claimed the benefit and those who lost their employment due to COVID-19 were allowed to register on the Job Centre Portal introduced by the Maldivian government. The period of three months was further extended at the government’s discretion.

No distinction is made between blue-collar and white-collar employees.

The legislation governing employment in the Maldives is the Employment Act 2/2008, which was enacted in 2008. This legislation applies to all employees in the Maldives regardless of gender, nationality or industry. The only group of individuals that are exempt from the Employment Act are the Maldives Police Service and Maldives National Defence Form employees, which has its own employment legislation to govern the employer and employee relationship. There are specific regulations relating to the employment of expatriates in the Maldives, which mostly govern the administrative aspects of expatriate employment in the Maldives; for example, administration of work permits, issuance of work visas and collecting fees relating to work permits.

There are three types of employment agreements:

  • agreements of a definite term;
  • agreements of an indefinite term; and
  • agreements specific to certain types of work.

Definite agreements are for a period not exceeding two years and automatically terminate upon expiry. If, however, the term of the definite agreement can be renewed or extended beyond two years, the agreement will be deemed an indefinite agreement. Agreements that exceed two years are permanent or indefinite agreements.

There is a statutory requirement to enter into an employment agreement and for it to be in writing. The employee must be provided a signed copy of the agreement and it shall include:

  • details of the employee;
  • the employment status;
  • date of commencement of employment;
  • salary and benefits;
  • guideline for calculation of salary;
  • payday;
  • leave entitlements;
  • disciplinary procedures; and
  • grounds for dismissal from employment.

Employees should also be provided a written job description stating the duties and scope of employment.

The terms of employment are commonly provided by the employer; however, minimum statutory rights are established to ensure the fundamental rights of employees are upheld irrespective of whether such rights are included in the employment agreement.

The working hours of an employee cannot exceed 48 hours a week (excluding overtime). The employee shall not be required to work more than six consecutive days a week without having 24 consecutive hours of rest. However, an employee working at a tourist resort, on a tourist vessel, or in an uninhabited island designated for industrial projects may be allowed to work more than six consecutive days a week subject to accumulation of such employee’s rest days. Such employees may also be allowed to work an additional two hours each day but must be paid at the rate of overtime pay in accordance with the Employment Act.

Although there are no statutory maximum working hours per day, an employee is entitled to the following breaks each working day:

  • a 15-minute break for prayer during each prayer time or a 15-minute break for four consecutive hours of work performed by an employee; and
  • a 30-minute break for a meal after five consecutive hours of work.

It is possible for an employer to contract these breaks to be excluded from the maximum working hours under the Employment Act.

Overtime is governed by the Employment Act in the Maldives. If an employee works in excess of 48 hours per week, the employer is generally required to pay 1.25 times an employee’s hourly wage as overtime. The employer shall pay 1.5 times the employee’s hourly wage if the overtime falls on a public holiday. It is also a statutory requirement that employees shall not be required to work overtime unless agreed in the employment agreement.

An employee required to work normal hours on a public holiday shall be paid at least an amount equivalent to half of the minimum wages earned on a normal day of work in addition to any overtime entitlement.

The Employment Act specifies certain groups of individuals to be exempt from the Employment Act sections relating to working hours, overtime payment and public holiday pay. These groups include the following:

  • persons working in emergency situations;
  • crew of seagoing vessels or aircraft;
  • persons in senior management posts;
  • imams and other employees at mosques; and
  • persons on on-call duty during the hours of duty.

Flexible arrangements and part-time contracts are not specifically regulated in the Maldives. However, if the employer and employee were to negotiate any terms that are more favourable than the minimum guaranteed terms, these terms would be upheld under the principles of freedom of contract.

The Employment Act allows the relevant government minister to set the minimum wage applicable to the employees. The relevant government minister is to establish a Minimum Wage Advisory Board that would advise the minister based on the following employment sectors:

  • fisheries and agriculture;
  • tourism;
  • construction;
  • transportation;
  • health;
  • education;
  • small and medium-sized enterprises;
  • information, communication and technology; and
  • maritime.

The Employment Act requires the minimum wage to be set for all Maldivian employees by no later than 31 December 2021 and for expatriate employees in the Maldives no later than 22 September 2022.

In the Maldives, there is no requirement to make a 13th-month salary payment.

The only statutory additional compensation guaranteed for all local employees is the Ramadan bonus of MVR3,000, which is to be paid by employers before the beginning of Ramadan. The payment of this bonus to foreign Muslim employees is at the discretion of the employer.

Employment law does not prohibit the employer and employee from agreeing to terms that are more favourable than the minimum rights under the Employment Act. As such, any bonus entitlements are generally dependent on the term of the employment agreement, in which there may be guaranteed bonuses and discretionary bonuses.

Annual Leave

An employee is entitled to 30 days of paid annual leave upon completion of one year of employment. Annual leave shall be taken no later than within 12 months from the expiry of the year in which the leave was acquired as it cannot be accumulated. Additionally, annual leave shall not include sick leave, public holidays, maternity leave, or notice period prior to termination of employment. Any annual leave entitlement for which the employee has not been paid by the employer shall be paid to the employee prior to the termination of employment.

Medical Leave

Employees are entitled to 30 days of medical leave during each year of employment. Employees who are unwell for two consecutive days or less are entitled to take medical leave without the need to provide a medical certificate for 15 out of the 30 days of medical leave. The employer may require the employee to present a medical certificate from a registered practitioner prior to approving any additional medical leave upon utilising the 15 days' medical leave without a medical certificate.

Maternity Leave

All female employees are entitled to 60 days’ maternity leave based on a medical certificate specifying the estimated date of giving birth issued by a licensed medical practitioner. All government employees are entitled to six months' paid maternity leave. Employees on maternity leave will be entitled to full salary and benefits, and the leave period cannot be deemed a discontinuance of work that affects the employee’s rights and benefits. An additional leave of 28 days must be granted to an employee who submits a licensed medical practitioner’s certificate confirming the employee’s inability to return to work due to ill health. The employer has the discretion to pay during this additional 28-day leave period.

Paternity Leave

A male employee is entitled to three days of paid leave on the occasion of the birth of his child.

Break to Attend to a Child

An employee is entitled to two daily breaks of 30 minutes each to attend to the needs of a child once the employee returns to work after the completion of maternity leave. This leave is applicable until the child turns one.

Leave for Parents

Once the maternity leave period expires, the mother or father of a newborn child may take unpaid leave for a maximum of one year.

Family Responsibility Leave

Employees are entitled to ten days of paid leave annually to attend to important family obligations.

Circumcision Leave

An employee is entitled to five days of paid leave on the occasion of the circumcision of a child.

Confidentiality

Employment officials have a statutory obligation to maintain the confidentiality of information obtained in the course of carrying out their duties, relating to business secrets, productivity and the like of commercial ventures during the currency of their employment and after dismissal. Clauses may be included in the employment agreement to prevent the disclosure of confidential information during and after employment but, as a general note, there is no statutory provision relating to confidentiality requirements of the employer and employee.

Employee Liability

Employee liability is subject to the term of employment agreement agreed between the parties.

Any clause in an employment agreement that purports to restrain or prohibit the conduct of an employee’s trade or profession is enforceable as long as the restraint is reasonable. It is, however, noted that what constitutes a reasonable period for such restraint has not been defined.

Non-solicitation clauses may be included in the employment agreement by an employer but it is unclear to what extent such a clause would be enforceable in the Maldives as it is untested.

The Maldives has not enacted any specific data protection legislation in respect of employment matters. As per the Employment Act, employment agencies shall not request or keep on record any information of a personal nature relating to a prospective employee except information that is essential to ensure that the person has the competence to discharge the employment sought. Such information shall be disclosed by the agency only to employers that have expressed interest in employing a person with certain abilities.

All foreign employees in the Maldives are required to hold a work permit prior to commencing work in the Maldives. The Expatriate Employment Regulation enacted under the Employment Act regulates the employment of expatriates in the Maldives. The Expatriate Employment Regulation sets out the administrative rules required to employ a foreigner in the Maldives, including the rules relating to the issuance of an employment quota and an application for work permit approvals. The Expatriate Employment Regulation identifies certain areas of employment where expatriates are not allowed to be employed in the Maldives, including the following:

  • taxi drivers and other drivers working on hired services;
  • co-pilots or first officers on Maldivian airlines;
  • captains on sea vessels;
  • fishermen on board the fishing vessels;
  • photographers and videographers;
  • artists involved in the entertainment industry; and
  • cashiers working at restaurants and cafes.

The employer and the person providing accommodation to the foreign worker must register with the Expat Online System. Subsequently, a Maldivian representative can be appointed by the employer and registered as a representative in the Expat Online System. The employer must then issue a letter of appointment to the foreign worker in order to obtain the employment approval. The employer will also need to obtain a quota, for which MVR2,000 is charged for every quota issued. Once a quota is granted, the employment approval will be granted, and this is required prior to arrival of the foreign worker in the Maldives. Upon arrival, the employee would be issued an annual work permit, which is renewable at the end of each year. The employer would be required to pay a monthly work permit fee.

There is no legal recognition of unions, though the Employment Act does not prohibit the formation of unions in the Maldives.

There are no recognised employee representative bodies in the Maldives.

There are non-government organisations registered as associations that represent the interests of selected groups of employees; for example, the Tourism Employees Association of Maldives and the Maldives Association of Human Resources Professionals.

Collective bargaining agreements are untested in the Maldives.

An employer must show reasonable cause to justify an employee’s termination. Motivation is not ordinarily required but may become relevant if an employee claims that an employer has discriminated against them or acted in bad faith.

Regardless of the grounds for dismissal, the employer must establish substantive and procedural fairness. This is the case for termination with and without notice, including where an employee’s actions constitute gross misconduct.

Collective redundancies are not subject to distinct rules. The Employment Act requires the employer to demonstrate that the redundancies are due to a situation of redundancy and that the procedural fairness required to establish justified dismissal should be upheld. The Employment Regulation enacted under the Employment Act provides further guidelines as to the steps that should be upheld prior to terminating an employee on grounds of redundancy, including the following.

  • An actual situation of redundancy under which an employer may terminate an employee includes the following circumstances:
    1. a service or business of the employer is discontinued;
    2. restructuring of the employer’s operations; or
    3. a position is removed from the organisation due to a worsening of the employer’s financial situation.
  • The Employment Act requires the employer to uphold good faith to ensure that the redundancy is not targeted at any individual or group of employees.

The employer is required to provide the employee with notice prior to the termination of employment, excluding in a situation where an employee action amounts to fraud or gross misconduct. The notice period for termination for cause other than redundancy is as stated below:

  • employment for more than six months or greater than a year – two weeks;
  • employment for more than a year but less than five years – one month’s notice; and
  • employment for more than five years – two months’ notice.

The notice required to be given in the circumstances where an employee is made redundant is different from the notice required for termination for reasons relating to the conduct or capacity of the employer. Prior to redundancy, the employer is required to provide the following notices depending on the duration of service:

  • employment for less than a year – one month's notice;
  • employment for more than a year but less than four years – two months’ notice; and
  • employment for more than four years – three months’ notice.

Employers must give notice in writing. Employers may also make a payment in lieu of notice, which must amount to the employee’s wages and other benefits that they would have received during a notice period. External authorisation is not required.

Dismissal without notice is defined as meaning termination of an employment agreement without notice as otherwise required by law or the agreement. This includes giving a shorter period of notice than would otherwise be required.

An employer may summarily dismiss an employee where their work is deemed unacceptable, and the employee’s continued employment is deemed, on reasonable grounds, to be unworkable. Specifically, an employer must show:

  • that an employee has committed fraud; or
  • that their continued employment would, more likely than not, be detrimental to the employer or the employer’s business.

No particular formalities must be observed, but employers must act with procedural and substantive fairness.

Termination agreements are enforceable to the extent that they do not infringe the minimum statutory rights of the employee.

The legality of termination agreements has not been tested in the courts.

There is no specific protection against dismissal for particular categories of employee.

The concept of wrongful dismissal is not recognised as a distinct concept under Maldivian law, but instances of wrongful dismissal are covered under the umbrella term of "unjustified dismissal".

In a claim for unjustified dismissal, the employee must establish that they were an employee and have been dismissed. The onus is now on the employer to establish the grounds for dismissal, and that those reasons are fair and justifiable.

An employee has a statutory right not to be unfairly dismissed. As per the applicable law of the Maldives, the employer must demonstrate procedural fairness and substantive fairness. The acceptable reasons for justifiable terminations are circumstances relating to capacity and/or conduct of the employee, or economic and organisational reasons of the employer’s business.

Employees must submit any claims for wrongful dismissal to the Employment Tribunal within three months of the date of their dismissal. Claims can be made on the ground that the employee was dismissed without cause regardless of whether notice was given.

A claim cannot be brought by an employee dismissed during probation.

Consequences of Unjustified Dismissal

The statutory remedies for unjustified dismissal are reinstatement, re-engagement and/or compensation.

Compensation will be determined on the basis of what is "reasonable and just" detriment suffered by the employee, and the employee’s own contributions.

Employers must not discriminate among employees on grounds of race, colour, social standing, religion, political beliefs or affiliation with any political party, sex, marital status, family obligations, age or disability. The prohibition on discrimination amongst employees carrying out equal work in the granting of employment, determination of remuneration, increase in remuneration, provision of training, determination of conditions and manner of employment, dismissal from employment or the resolution of other employment-related matters is provided in the Employment Act.

The burden of proof is on the employer to show that there is no discrimination, or that any discrimination is based on a justifiable inherent requirement of the specific job.

However, claims may not be brought for preferential hiring of Maldivians over those of different nationalities.

Claims for Anti-discrimination

Employees may file a claim in the Employment Tribunal on the grounds that the rights conferred to them under the basic principles in the Employment Act have been affected.

Damages and Relief

The Tribunal has the power to issue orders such as:

  • performing an act or ceasing the performance of an act;
  • reinstating an employee;
  • restoring a benefit or advantage; and
  • paying compensation.

The Employment Tribunal (established by the Employment Act in 2008) and, to some extent, the Labour Relations Authority are specialised forums for the resolution of employment matters.

It is possible to bring class action claims. An employer or the employee may be self-represented, or represented by a representative, or by an attorney.

Arbitration is not possible for the resolution of an employment dispute.

As per the Employment Tribunal Regulation 2015, the costs (including attorney’s fees) associated with a case (for the claimant and respondent) are not awarded regardless of the outcome. However, a party may be able to claim legal fees and costs (incurred reasonably) at the appellate court level if the employment agreement expressly provides for it.

S&A Lawyers LLP

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20026, Malé
Republic of Maldives

+96 077 70 948

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Law and Practice in Maldives

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S&A Lawyers LLP is a market-leading law firm specialising in corporate and commercial law, providing legal services to key government agencies, international financial institutions, and large local and multinational corporations. The firm provides a broad range of services on matters pertaining to employment law in the Maldives, including general advice on employment agreements and policies, dismissals, employment benefits and incentives, disciplinary and discrimination matters, and regulatory compliance. The firm mostly represents employers from the tourism industry in the Maldives – the industry consisting of the greatest number of employees. The firm has represented its clients in all aspects of employment law and many cases have been recognised as landmark cases in the legal landscape of employment law.