The rise in recruitment agencies in Malta is evident, prompting legislators to implement regulations aimed at safeguarding the quality and integrity of these services.

The Employment Agencies Regulations (the ‘Regulations’), introduced by Legal Notice 270 of 2023, seek to standardise the operating conditions of employment agencies and employment businesses. The regulations aim to establish transparent procedures, enforce license conditions, and ensure that individuals engaged in this field are qualified and competent. They also introduce a more effective system to oversee the operations of these service providers. 

The Requirement of a License 

In terms of the new regulations, no person shall operate an employment agency or an employment business unless the person is the holder of a valid license. An “employment agency” and an “employment business” is defined interchangeably in terms of the Regulation. The definition provided is that of any natural or legal person carrying out any relevant activity in Malta such as: 

• For the recruitment of persons for employment in Malta or outside of Malta; 
• As a temporary work agency; or 
• As an outsourcing agency. 

Employers conducting recruitment for their own businesses, those recruiting for specific employers as stated in advertisements, outsourcing agencies providing professional, technical, and surveying services for equipment, machinery, and vessels, as well as Jobsplus acting as an employment agency, are exempt from these regulations. 

Applying for the Required License 

Application for the issuance of the required license, in terms of the new regulations, started being received from the 1st of January 2024. The application should be filed with the Department of Employment and Industrial Relations (DIER). The application for an employment agency or an employment business must include various details, such as the applicant’s general information, income tax registration number, VAT number, registered address of business premises and the details of the intended activities. For agencies involved in temporary or outsourcing activities, the application must also include evidence of the applicant's ability to provide a bank guarantee to the Employment Agencies Administration Board. 

Generally, the licenses obtained are valid for one year.  However, for initial renewals, the Director of the DIER may specify a period of up to two years based on the department's operational system. The Director of the DIER holds the authority to refuse, revoke, or modify license applications if the applicant fails to meet the outlined requirements in the Regulations. Applicants have the option to appeal the decisions taken by the Employment Agencies Appeals Board.
 
Prior to submitting the license application, the applicant must also pay a fee of an application fee of €3,000. A fee of €1,500 shall be payable upon each license renewal application.  A license may only be granted for one specific activity, either for recruitment services or to render one or both activities in relation to temporary work services and/or outsourcing services. Therefore, if an applicant intends to conduct both recruitment services and activities pertaining to temporary work and/or outsourcing, they must obtain two separate licenses.

Employment agencies that currently engage in recruiting individuals with valid licenses may continue performing activities until the expiration of their existing license. In such instances, an application for a new license must be submitted at least two months before the current license expires or, if the license expires within a month from the enactment of these Regulations, it should be submitted no later than one month from the day these Regulations come into effect. 

Those seeking a license, must hire a qualified individual on a full-time basis to oversee the agency. The appointed individual must be either a Maltese citizen or have entitlement to equal treatment as Maltese citizens residing in Malta. Additionally, the individual must possess a minimum of six years of experience in human resources, or alternatively, have at least three years of experience in human resources along with a relevant University degree in management.

Conclusion 

In the dynamic realm of business, the critical role of these agencies in securing the best talent for business success cannot be overstated. Malta has witnessed a surge in the number of such agencies, prompting legislative action to ensure the quality and reliability of these services. The Employment Agencies Regulations, introduced via Legal Notice 270 of 2023, signify a pivotal step towards standardising the operations of employment agencies in Malta. By mandating licensing requirements and defining clear parameters for agency activities, these regulations aid in instilling transparency, upholding professionalism, and enhancing oversight within the industry. 

Written by Dr. Daisy Grima, Junior Lawyer

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