Why is a Disciplinary Process Important for Dismissals?
In the context of employment law, it is important for employers to adhere to established disciplinary procedures when considering dismissals. For a dismissal to be justified on the grounds of good and sufficient cause, as outlined in article 36(14) of the Employment and Industrial Relations Act (Chapter 452 of the laws of Malta; the “Act”), it is imperative for an employer to conduct a thorough disciplinary process, which the Company must adhere to. This process typically requires the issuance of a charge letter to the employee, detailing the alleged misconduct during their employment. Subsequently, a meeting should be arranged between the parties to allow the employee the opportunity to present their perspective and defend their case. Warning letters will then be issued based on the outcome of the meeting, as well as any potential consequences or actions that may arise during the course of the disciplinary process.
In the case of Ivan Camilleri vs Allied Malta Newspapers Ltd., decided by the Industrial Tribunal on the 31st of May, 2024 and which decision was confirmed by the Court of Appeal (Inferior jurisdiction) on the 12th of February, 2025, the necessity to follow a proper disciplinary process before proceeding with a dismissal based on good and sufficient cause was underscored.
Background
The applicant Ivan Camilleri had been employed with the newspaper agency Allied Malta Newspaper plc. as a full-time senior journalist since the year 2004. On the 19th of December, 2019 (the “Termination Date”), the applicant was asked to attend a meeting, during which he was presented with a letter outlining two (2) serious allegations that were deemed to have damaged the reputation of the Company. One allegation concerned a recent incident of shoplifting, and the other related to a leak of information to third parties regarding a criminal investigation being conducted by the police at that time. The applicant was requested to provide an explanation for these allegations, which were considered to constitute gross misconduct that could potentially result in his dismissal.
The applicant denied the allegations and was later asked to leave the room. Just over an hour later, he was then called back and given a second letter informing him that his employment with the newspaper Company was terminated with immediate effect.
Considerations of the Tribunal
The Tribunal examined two (2) main aspects:
1. the procedural aspects surrounding the case, including the disciplinary process, the investigations carried out, the hearing of the case and the right to appeal.
2. the substantial aspects surrounding the case such as the reason for the dismissal, the circumstances surrounding the case, whether there was consistency in the decision of dismissal made, the expected flexibility of the Company when making the decision to dismiss the employee, the terms and conditions outlining the employment relationship among the parties by virtue of the employment contract, and the nature of the employee’s work, among others.
It is also important to note that a collective agreement was in place among the parties and governed the disciplinary procedure for all employees of the Company, including the applicant. Therefore, the provisions outlined therein had to be strictly adhered to by the employer.
The importance of a proper disciplinary process
The Tribunal reiterated that the clauses on the disciplinary process are perhaps one of the most essential clauses in a collective agreement, which clauses list the process of exercising justice in the workplace when an employee is charged with breaching company rules. It quoted the case of Silvio v Corinthia Palace Company Ltd, (decided first by the Industrial Tribunal on the 20th of October, 2008 and later by the Court of Appeal, (Inferior jurisdiction) on the 27th of February, 2009), wherein the Court of Appeal stated that;
“Il-kondizzjonijiet u dixxiplini l-oħra tiegħu (ftehim kollettiv) għandhom jitqiesu r-regoli ta’ ġudizzju li jridu jiġu assunti meta tinsorgi xi kwistjoni jew problema bejn l-interessi.”
The employer is justified in deciding on a dismissal without necessarily following the full disciplinary process when the case is clear, such as when an employee admits to an extremely serious charge that warrants termination of employment. In such instances, the disciplinary process may be deemed unnecessary, as it would not alter the outcome. However, when the applicant denies the charges and requests a fair hearing, the employer is obligated to ensure that the hearing is conducted impartially, transparently, and that the final decision is based on factual evidence.
In Selwyn’s ‘Law of Employment’, the essence of ‘unfair dismissal’ is defined as being when the “employer terminates the employment without carrying out the disciplinary procedure which has been incorporated into the employee’s contract”.
21st Edition para 16.6 (d).
Furthermore, it was outlined that the principles of natural justice, where both parties to the conflict must be heard and that no individual may be a judge to his own case, are the basic principles expected from any trial of judgment, especially when a judgment may lead to the termination of an employee’s employment. In fact, in Paul Borg vs Public Transport Authority decided by the Court of Appeal (Superior jurisdiction) on the 28th of September, 2012, the Court declared that;
“Fl-aħħar nett, għandu jiġi osservat li fil-kuntest tal-principji ta’ ġustizzja naturali, ingħad a propositu, li n-nullità ta’ xi deċiżjoni għandha tiġi pronunzjata anke jekk l-istess deċiżjoni tkun sostanzjalment ġusta”.
To this end, the Tribunal recalled that if the employer terminates the employment of an employee without following the procedure established, the Tribunal must approach the case with much greater caution to examine whether the dismissal was reasonable or not.
Selwyn provides a framework for how a fair disciplinary process should be conducted and explains that such internal disciplinary procedures should not be burdened with much legalism and unnecessary formalities. He provides a list of what is expected of a typical employer when conducting such processes, among them including the following points;
(i) The employee is entitled to know the nature of the charges being brought against him in sufficient detail to enable him to prepare his case;
(ii) An employee should always be given an opportunity to state his case no matter what the circumstances are;
(iii) He should be permitted the right to be represented or accompanied in accordance with the procedure in place;
(iv) He should be informed of his right to appeal to a higher level of management, who have not previously been involved in the decision or to an independent arbitrator.
Improper actions by the Employer prior to his Dismissal
The Tribunal proceeded to outline the actions that demonstrated the Company’s failure to adhere to the principles of fairness and justice in conducting an adequate disciplinary process, as required by the collective agreement and as supported by relevant jurisprudence on the matter, whilst emphasising that in every employment relationship, the employee, as the weaker party to the agreement, benefits from an added layer of protection.
Firstly, the applicant was asked to present himself for a meeting with the management without knowing what the reason of the meeting was. This meant that the employee did not receive prior notice for the meeting, to the extent that he was unaware of the meeting’s agenda. Present at the meeting, he found not only the management but also the Chairman of the board of directors, another director of the Board and the Editor in Head of the Times of Malta newspaper.
Secondly, the applicant was presented with a letter/memo, as outlined by the Tribunal, listing serious allegations that could potentially lead to his dismissal. He was presented with a ‘letter/memo’ rather than a ‘charge letter,’ and the document referred to allegations rather than accusations. In relation to these allegations, the applicant was asked to immediately provide evidence of his innocence. Although the applicant denied the allegations, the Board proceeded with the process despite the fact that the applicant was not afforded the opportunity to prepare a defence. As a result, the Board did not hear the version of events as presented by the applicant. Furthermore, the applicant was not given the chance to seek consultation or assistance.
To allow for deliberation on the matter, he was asked to leave the meeting room and was subsequently called back after approximately one hour. At that point, a second letter was presented to him, notifying him of the immediate termination of his employment with the Company. No information was provided regarding his right to appeal under the collective agreement.
Selwyn clarifies that there are three (3) categories for the proper heading of such cases;
(i) the first informal hearing includes where the employer hears and discusses with the employee a matter which has come to the knowledge of the company;
(ii) the second hearing is where the employer appoints an investigator to collect the facts and evidence of a matter which came to their knowledge and which may lead to disciplinary action to be taken, as the case may be;
(iii) The third hearing is a disciplinary process where certain basic principles are observed for a fair hearing.
Selwyn’s Law of Employment 21st Edition para 12.2.
As stated by the Tribunal in the case Owen Catania vs Fiona Farrugia decided by the industrial tribunal on the 6th of December, 2021, it was further emphasised that:
“L-addebitu tan-nuqqas jew tal-imgieba ħażina jrid ikun speċifiku, jiġifieri ghandu jkun formulat b’mod ċar ta’ l-aspetti essenzjali u materjali tal-fatt denunzjat. Mhux aċċettat allura li l-addebitu jkun bażat fuq sempliċi suspettit vagi jew ridott għal-alluzjonijiet ġeneriċi”.
Therefore, any charge letter issued by the employer must be specific, clearly formulating the essential aspects of the charge/s and/or illicit actions and behaviour of the employee and denounce materials of fact. Vague or generic allusions are not considered.
The collective agreement provided that an employee could be suspended (and not dismissed) pending investigations and disciplinary proceedings, offering the Company an alternative to mitigate the situation. However, the Company did not to utilise this provision. Additionally, when the applicant denied the allegations, instead of ensuring that he would be granted a fair hearing in accordance with the collective agreement, the Company continued with the process of termination. At that point, the employer should have suspended the process to allow the applicant time to prepare his defence and seek assistance.
It was also an error for the Company to have allowed the managing director to be present during the process. The collective agreement stated that, in the event of an appeal against the decision, it was to be made before the same managing director. His presence effectively closed the possibility of an appeal, which the applicant might have had. The principle that no one can judge their own case; nemo judex in causa sua, was therefore violated.
The collective agreement moreover specified that when a charge letter is issued, the employee should have five (5) days to prepare their defence. In this case, the letter/memo did not afford the applicant this opportunity. What the Company referred to as a ‘charge letter’ was inconsistent with its previous practices.
Additionally, the Human Resource Manager, normally having the authority to carry out a due and fair disciplinary process, and decide on the case, including the option to suspend the employee, stated that he was not involved in the case and was bypassed by the process, except for providing advice on the collective agreement. Therefore, the expert responsible for conducting disciplinary processes and ensuring adherence to the collective agreement between the Company and the Union was effectively excluded from any involvement in the process.
Furthermore, Selwyn dictates that “Tribunals have frequently stressed the need to issue warnings before the power of dismissal is exercised. They should make clear the nature of the conduct which will not be tolerated, and spell out in no uncertain terms that the consequence of a failure to heed the warning will be a dismissal. Failure to follow these rules may lead to the tribunal making a finding adverse to the employer.”
Selywn’s Law of Employment 22nd Edition para 12.81 and 12.82.
Following the examination of the facts at hand, the Tribunal decided that Mr Camilleri was in fact unjustly terminated from his employment with the Company, and proceeded to order the latter to compensate for the damage suffered by the applicant. The sum of compensation amounted to one hundred and seventy-one thousand, five hundred and sixty nine Euro (€171.569.00) to be paid to the employee in two (2) instalments; one within six (6) months from the date of decision and the second within a year from the decision date.
Calculation of damages
Given the inherently subjective nature of how the Industrial Tribunal calculates the amount of compensation for damages, it is crucial to comprehend the rationale behind the Tribunal’s decision in determining such an amount.
The proviso to article 81 (2) (a) of the Act states that “in determining the amount of such compensation, the Tribunal shall take into consideration the real damages and losses incurred by the worker who was unjustly dismissed, as well as other circumstances, including the worker’s age and skills as may affect the employment potential of the said worker.”
Hence, it is clear from the wording of the law that the Tribunal may take into account a number of circumstances when it comes to computing the compensation to be paid to the worker who has been dismissed without due cause. This also means that the Tribunal has the discretion to assess the circumstances of the case in order to decide whether there should be a reduction in the amount liquidated due to contributory negligence on behalf of the employee. While there was unacceptable conduct of the applicant, and that he was undoubtedly instrumental for the decision that his employment should be terminated, at the same time the Tribunal also had to consider that the respondent company was at fault for the lack of disciplinary proceedings on its part.
Taking into account that the employee was terminated on the 19th of December, 2019, the compensation amount was calculated as follows:
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