Self-employed individuals do not have the same rights as employees under Gibraltar law. They are also responsible for their own tax and social insurance payments.
A job offer may be for an indefinite period or for a fixed term. Fixed-term contracts are governed by the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2003, which aim to prevent fixed-term employees being treated less favourably than similar permanent employees and limits the use of successive fixed-term contracts.
In order to engage an employee, an employer must be registered as such under the Business Trades and Professions Registration Act 1989 and must also register with the Income Tax Office.
In addition, a Notification of Vacancy form must be completed and all vacancies must be registered with the Department of Employment before seeking to engage a person as a worker.
A Notice of Terms of Engagement must also be completed and submitted to the Department of Employment for all workers. This Notice must set out certain terms of the employee's employment, including wages and notice periods. A copy must be given to the employee. Any changes to the employment relationship must be notified to the Department of Employment on a prescribed form.
The Working Time Act (WTA) provides specific rules governing the working hours, breaks and holidays of workers. A person under a contract of employment or who provides work or services to another person under a contract that is not a contract for professional services is considered a worker for the purposes of the WTA.
There is a 48-hour limit on average weekly working time, including overtime. The average number of hours worked must be calculated with reference to a 17-week period. There are some special case exemptions allowing a 26-week reference period, and the possibility of a reference period being a full year where a collective or workforce agreement provides for this.
It is possible for individuals to opt out of the 48-hour limit, but such agreements are terminable on not more than three months' notice and increase the employer's record-keeping burden.
The 48-hour limitation does not apply to those whose working time cannot be measured or predetermined.
The first category above is open to wide interpretation, with some employers arguing that it covers all professional and managerial staff.
The normal working hours of a night worker must not exceed an average of eight in each 24-hour period. In the case of a night worker whose activities involve special hazards or heavy, physical or mental strain, there is an absolute limit of eight hours. Night-time means the period between 11pm and 6am. The precise period can be determined in a relevant agreement and in the absence of such an agreement, it will be 11pm to 6am.
Part-time workers have the same rights/entitlements as a full-time worker, unless there is an objective justification for the difference in treatment. Part-time workers accrue rights over time in the same way as full-time workers. The duration of the annual holiday of part-time employees shall be calculated pro rata based on an employee who works a five-day working week.
If employees are expected to work regular overtime, it is good employment practice to state this clearly in the employee's contract of employment, together with:
Overtime rates are a matter for agreement between the employer and employee or on an industry-wide basis. There are certain minimum statutory levels and overtime pay varies from business to business.
Typical rates for overtime are:
Under the Conditions of Employment (standard minimum wage) (amendment) Order 2019, the statutory minimum wage has increased from £6.75 to £7.00 from 1 August 2019. From 1 August 2020 it will increase by 3.7% to £7.25 and from 1 August 2021 it will increase by 3.4% to £7.50.
All employees in any undertaking or any branch or department of an undertaking are entitled to a minimum hourly, weekly and monthly remuneration. This does not include:
It is not unusual to reward employees through bonuses in some sectors, such as financial services. Although many bonus schemes are described as discretionary, they are likely to be subject to implied duties and should be operated in a way that does not discriminate or breach the Equal Opportunities Act 2006.
The Employment (annual and public holidays) Order 1969 (EAPHO) provides specific rules on the duration of an employee’s annual holidays and payment of the same.
According to Section 4 of the EAPHO, an employer shall, between January 1st and December 31st each year, allow a holiday (hereinafter referred to as an “annual holiday”) to every employee who was employed by him for four weeks or more during the twelve months immediately preceding January 1st in that year (such twelve-month period is hereinafter referred to as the “qualifying period”). The duration of an employees’ annual holiday shall be related to the period of his/her employment with the employer during the qualifying period, the employees continuous service and the amount of working days a week the employee is conditioned to. The duration of an employee’s annual holidays should be calculated in accordance with the tables in Schedule 2 of the EAPHO. The duration of the annual holiday of part-time employees shall be calculated pro rata based on an employee who has a five-day working week.
The minimum paid annual holiday entitlement is 15 days for employees working at least five days a week, increasing to 25 days once the employee has eight years of service. There is no statutory unpaid holiday entitlement.
An annual holiday shall be allowed on consecutive days. Any rest day or public holiday that intervenes in a period of annual holiday shall not count as a day of annual holiday.
An employer shall give to an employee reasonable notice of the commencing date or dates and duration of his annual holiday periods and such notice may be given individually to an employee or by the posting of a notice in the place where the employee is employed.
An employee qualified to be allowed an annual holiday shall be paid by his or her employer in respect thereof, on the last pay day preceding the commencement of such annual holiday, or of each period thereof as the case may be, one day’s holiday pay in respect of each day thereof.
Where an employee ceases to be employed by an employer, the employer shall, on termination of the employment, pay to the employee one day’s holiday pay in respect of each day of accrued annual holiday to which the employee would have been entitled, less any days of annual holiday already allowed. However, holiday pay shall not be payable to an employee where the employee is dismissed on the grounds either of dishonesty or of misconduct and is so informed by his employer at the time of dismissal or where the employee leaves his employment without having given his employer notice of termination of employment in accordance with Section 54(2) of the Employment Act. Where any employee dies while in the employment of an employer, the amount of any accrued holiday pay to which he would have been entitled had he given notice to terminate the employment to his employer, expiring on the date of his death, shall be due and paid to the legal personal representative of the employee by the employer.
Nonetheless, the provisions of the EAPHO discussed above do not prevent the allowance by any employer of any annual or public holiday condition or the payment of holiday remuneration more favourable than those prescribed.
Paid Sick Leave
The provisions relating to an employee’s minimum sick pay entitlement are contained in the Employment (sick pay) Order 1974 (ESPO).
According to Section 3(1) of the ESPO, an employer shall, within any period of twelve months, allow an employee sick leave on full pay for a total of not less than two weeks, and thereafter on half pay for a total of not less than four weeks within the same period of twelve months, subject to the following conditions:
The employer shall be entitled to deduct from any sick pay payable to the employee the amount of any benefit to which the employee may be entitled under the Social Security (Employment Injuries Insurance) Act in respect of the same period.
In calculating sick pay entitlement, no regard shall be had to overtime normally worked by the employee.
Family and Other Medical Leaves
An employee’s right to parental leave is contained in the Employment (maternity and parental leave, and health and safety) Regulations 1996 (EMPLR), which sets out the basic rules. However, employers and their workers are free to agree the details. If there is no agreement on the details, a default scheme provided in Schedule 1 of the EMPLR applies.
An employee who has been continuously employed for a period of at least one year and has, or expects to have, responsibility for a child is entitled to be absent from work for four months on unpaid parental leave for the purpose of caring for that child.
An employee may not take more than four weeks’ unpaid parental leave in any one year from the date of the child’s birth, or adoption. A week’s leave means seven days’ absence from work, including weekends.
Ordinarily the entitlement to unpaid parental leave must be exercised before the child's 5th birthday.
Under the default scheme, the minimum period of parental leave is one week and leave must be taken in multiples of one week unless the employer agrees otherwise.
An employee who wishes to take parental leave must generally give the employer, where the period of leave is two weeks or less, at least four weeks’ notice before the date on which the period is to begin. Where the period of leave is more than two weeks, notice is to be given at least twice as many weeks before the date on which the period is to begin, treating any fraction of a week as a whole week.
The employer can postpone the leave if it considers that the operation of the employer’s business would be substantially prejudiced if the employee took leave during the period identified in his notice.
Time Off Work for Urgent Family Reasons
An employee may take up to five working days in each year as special unpaid leave for urgent family reasons such as sickness or accident affecting a member of the employee’s immediate family that makes the immediate presence of the employee indispensable.
The employee’s “immediate family” means the employee’s:
An employee who takes special unpaid leave as described shall provide the employer with such proofs as the employer may reasonably require of the necessity for the leave.
The entitlement to maternity leave is governed by the EMPLR.
An employee’s maternity leave period commences on the date on which she notifies her employer and the director of the date on which she intends her period of absence from work, in exercise of her right to maternity leave, to commence or if earlier, the first day on which she is absent from work wholly or partly because of pregnancy or childbirth after the beginning of the sixth week before the expected week of childbirth.
An employee shall not have the right to maternity leave unless she notifies her employer and the director of the date (which cannot be before the beginning of the 11th week before the expected week of childbirth) (“the notified leave date”) on which she intends her period of absence from work in exercise of her right to maternity leave to commence:
An employee shall not have the right to maternity leave unless, if requested to do so by her employer and the director, she produces for his inspection a certificate from a registered medical practitioner or a registered midwife stating the expected week of childbirth. Neither shall an employee have the right to maternity leave, unless she informs her employer in writing at least 21 days before her maternity leave period commences or, if that is not reasonably practicable, as soon as is reasonably practicable:
Where childbirth occurs before the day with which the employee’s maternity leave period would otherwise commence, her maternity leave period shall commence with the day on which childbirth occurs.
An employee is entitled to a maternity leave period of 14 weeks or until the birth of the child, if later.
An employee shall not work, or be permitted by her employer to work at any time during the period of two weeks commencing immediately after the day on which she has given birth.
Where an employee is pregnant, and has notified her employer in writing of that fact, she shall be entitled to have time off, without loss of pay, in order to attend ante natal examinations, where such examinations have to take place during working hours.
If, at the beginning of the 11th week before the expected week of childbirth, the employee has been continuously employed for a period of not less than one year, she shall have the right to return to work at any time during the period beginning at the end of her maternity leave period and ending 29 weeks after the beginning of the week in which childbirth occurs.
If requested by her employer, the employee must give written confirmation of her intention to exercise her “Right to return to work” not later than 14 days after receiving the request. Such a request by the employer must be:
The employee must notify her employer at least 21 days before the day on which she proposes to return to work (“notified day of return”).
An employer may postpone the employee’s return to work date until a date not exceeding four weeks from the notified day of return. The “notified day of return” can be postponed a further four weeks if the employee presents to the employer a medical certificate. No further postponement may be granted.
A woman shall be entitled to maternity allowance if she has:
Maternity allowance shall be paid for a maximum period of 18 weeks, at fortnightly intervals, or in such other manner as the director may, in any particular circumstances, deem appropriate and be paid at the weekly rate of injury benefit (excluding dependants allowance) to which the person entitled to maternity allowance would have been entitled to receive during her maternity leave period had she been a beneficiary in relation to such benefit.
The employer shall be entitled to deduct from any maternity pay, payable to an employee under a contract of employment or terms of employment, the amount of any benefit to which the employee may be entitled under this section.
An individual who is absent on maternity leave has the right to return to the same job, at any time after her maternity leave period and ending 29 weeks after the beginning of the week in which childbirth occurs, on the same terms and conditions and with all her benefits and rights intact.
Special protection exists where the employee's job becomes redundant whilst she is absent and she is entitled to be offered redeployment opportunities by her employer or an associated or successor employer ahead of other employees.
There are no statutes pertaining to covenants not to compete in Gibraltar.
In order to be valid, the covenants must go no further than protecting the employer's legitimate business interests. If it is unreasonably wide, it will be void; the court cannot substitute a lesser restriction that would have been reasonable.
The types of covenant commonly used in employment contracts are:
Covenants will only be enforceable if they are considered reasonable. Reasonableness will include factors such as: nature of the employee's work and what information he had access to, whether "clients" and "employees" are restricted to those with whom the former employee had dealings, and the size of an area restriction and its duration.
If restrictive covenants are disregarded or if confidential information is misused, an employer can seek damages against the employee or ex-employee or obtain an injunction restraining him from breaching the covenants or misusing the confidential information. It may also be possible to sue the new employer for inducing a breach of contract or for breach of confidence.
There is no applicable information in this jurisdiction.
The General Data Protection Regulation (GDPR) came into force on 25 May 2018 and therefore data collected, processed, stored and accessed should be restricted to the minimum for each specified purpose. Data should only be kept for as long as necessary.Individuals, including employees, have the right to be informed of how their data will be used. They can access, rectify, erase and object to data being held or processed. They also have the new right of portability; that is, the data can be transferred to another organisation on request.
Employers are not able to process data until they show that the legitimate interest or legal basis outweighs the interests or rights of the employee.
Any data held on paper or electronically should be available to the individual, free of charge, in a commonly used format, electronically and within one month.
A ‘legal basis’ is needed to justify the processing of each data category. A legal basis can be a statutory requirement, such as recording for tax purposes, necessary for a legal obligation, or for the performance of the contract, like paying the individual or ensuring work is performed. For much employee data, the legal basis will be a ‘legitimate interest’; for example, capturing data to improve workforce performance or to respond to a dispute.
The Employment Regulations 1994 provide that it is an offence to engage a worker other than an entitled worker, as defined in the Employment Regulations, without having first obtained a permit in respect of that worker.
Entitled workers are:
All other workers require a work permit to work in Gibraltar.
A work permit must be obtained before employment commences and will only be issued for twelve months at a time. The application is made by the employer to the Director of Employment.
The employer must lodge a deposit with the Director of Employment for the amount that would be required to repatriate the employee on termination.
Applications are usually processed within two to three weeks.
Failure to obtain a work permit is subject to financial penalties.
Non-EU nationals require residency permits if they wish to reside in Gibraltar.
Applications must be made to the Civil Status and Registration Office.
It takes around four weeks to obtain a residency permit.
A person who is not entitled to reside in Gibraltar and does so without a permit will not be allowed to stay.
In order to engage an employee, an employer must be registered as such under the Business Trades and Professions Registration Act 1989 and must also register with the Income Tax Office.
The employer is required to apply for a work permit should they wish to engage a Non-EU National prior to their commencement date.
The law on trade unions is largely governed by the Trade unions and Trade Disputes Act 1947.
In order for a trade union to be able to conduct effective collective bargaining on behalf of its members, it must be registered in accordance with the provisions of the Trade unions and Trade Disputes Act 1947.
An employee has the following rights in relation to his or her employer:
Where an employer is proposing to dismiss as redundant five or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals.
The appropriate representatives of any affected employees are if the employees are of a description in respect of which a trade union is recognised by their employer, representatives of the trade union or in any other case, employee representatives the employer chooses.
These are agreements negotiated by trade unions and employers or employers' associations. They can form the basis of an individual's contract of employment provided certain conditions are met.
Employees with at least a year's continuous service can only be dismissed for a fair reason, namely:
The employer has the burden of proving the reason for dismissal.
Redundancy is a potentially fair reason for dismissal, if there is a genuine redundancy situation. Employers must follow a fair and reasonable process, which should involve:
Employers must usually consult employees about the proposed redundancy, and consider ways of avoiding redundancy.
Where the employer proposes to dismiss as redundant five or more employees within a 90-day period, collective consultation requirements are triggered.
The employer must consult employee representatives (being either trade union representatives, or employee representatives elected in accordance with the requirements of the Employment Act) at least 60 days before the first dismissal.
The consultation will include a discussion of ways to avoid redundancies or mitigate the consequences of the redundancies.
The employer must also notify the Director of Employment (appointed under the Employment Act) in writing of the:
Minimum statutory notice periods the employer must give vary depending on the employee's length of service.
If the employee is paid monthly, notice periods are as follows:
If the employee is paid more often than monthly, notice periods are as follows:
Employment contracts can provide for longer notice periods and for payment in lieu of notice.
Employees can be dismissed without notice in cases of gross misconduct. Otherwise, failure to provide appropriate notice will give rise to a claim for wrongful dismissal.
Fixed-term employees who are dismissed before the expiry of their contract are entitled to 50% of the sum that would have accrued during the unexpired period of the contract.
The employer must file a Notice of Termination with the Employment Department within seven days of dismissal.
To avoid breach of contract claims, the employer must comply with any contractual obligations regarding termination.
A fair process must be conducted to avoid claims for unfair dismissal. Although not a statutory requirement, the Employment Tribunal will consider the process followed by the employer.
Different considerations will apply in cases where dismissal is on the grounds of capability or redundancy.
Generally speaking, an act of gross misconduct is considered to be serious enough to overturn the contract between an employer and employee, so justifying summary dismissal.
It is still vital that the employer follows a fair procedure, as for any disciplinary offence.
Failing to establish the facts before taking action and holding a meeting with the employee, and denying the employee the right to appeal is highly likely to be considered unfair at an employment tribunal and lead to a claim against the employer.
The conditions regulating compromise contracts in respect of complaints presented to the Employment Tribunal of harassment or discrimination are set out in Section 62(2) of the Equal Opportunities Act. The conditions under this section are that:
A person is a relevant independent adviser for the purposes of this section:
But a person is not a relevant independent adviser in relation to the complainant:
Any two persons are to be treated as connected:
It is unlawful to discriminate against employees on the basis of any protected characteristic under the Equal Opportunities Act 2006. The protected characteristics are as follows:
Employees are protected from the following under the Equal Opportunities Act 2006:
Breach of a notice term, whether express or implied, and breach of a contractual disciplinary procedure are examples of grounds for a wrongful dismissal claim. The remedies available for wrongful dismissal are damages and equitable remedies such as a declaration, and an injunction will only be granted if damages would be inadequate.
Legislation in Gibraltar, in particular the Equal Opportunities Act 2006, outlaws discrimination in the workplace on the basis of:
Discrimination may take the form of direct discrimination, indirect discrimination, harassment or victimisation. Almost all categories of workers are protected from discrimination, including employees, contract workers, past employees or workers and those applying for jobs or in the process of going through recruitment procedures.
Any termination that can be shown to be due to a discriminatory reason will be unlawful.
There is no cap on awards for discrimination or harassment and a successful applicant may be awarded damages, including damages for injury to feelings.
Standard forms are available on the Department of Employment website and are required to be completed and sent to the Department of Employment.
An employee may make a claim to the employment tribunal if they think someone has treated them unlawfully; eg, their employer, a potential employer or a trade union.
Unlawful treatment can include:
A claim has to be made to the Tribunal within three months of employment terminating or the problem occurring.
To make a claim, a Claim Form needs to be completed and submitted to the Tribunal Secretary, who will send a copy of the Claim Form to the respondent and a blank Response Form for them to complete. The respondent then has an opportunity to file a response. The employee will receive a copy of the response.
Once the Tribunal has accepted a Claim Form and any Response, it will appoint a mediator.
Arbitration is possible.
Pre-dispute arbitration agreements are enforceable.
A Tribunal may on its own initiative or on application make a costs order or a preparation time order, where it considers that a party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; or any claim or response has no reasonable prospect of success. A Tribunal may also make a costs order or a preparation time order where a party has been in breach of any order or any of the Employment Tribunal (constitution and procedure) Rules; where a hearing has been adjourned or postponed on the application of or as a result of the conduct of a party