Constructive dismissal in Malta: forced to resign, and the evidence that matters

Who this is for: executives and senior employees who feel they are being pushed out and are thinking of resigning, and employers facing an allegation that a resignation was forced. Each section applies the same law from both sides; section 9 is written for employers.

Short answer. An employee who resigns in Malta can still claim unfair dismissal if the employer’s conduct caused the resignation. This is called constructive dismissal. The Employment and Industrial Relations Act does not use the term, but it allows an employee to leave without notice where there is a good and sufficient cause, and the Industrial Tribunal and the courts have built the concept on English principles. The employee must prove a serious breach by the employer, that they resigned because of it, and that they did not accept it by staying on. The resignation letter, the timing and the record kept along the way often decide the case.

This is a best-practice guide. Real departures rarely follow it neatly, and the gaps are where claims are won and lost.

Best practice, and the reality

On paper, the test is simple: a serious breach, a resignation caused by it, and no acceptance in between.

In practice, some of the following usually complicate it:

• A role emptied gradually, with responsibilities moved to others while the title and salary stay the same.
• A disciplinary process that ends not in dismissal but in a lesser role, a move to another company in the group, or lower pay.
• A meeting at which the employee is told to resign or be dismissed, with nothing in writing.
• A request refused, such as flexible work or a career break, that the employee experiences as a breach but the contract leaves to the employer.
• A resignation letter written to leave on good terms, thanking the employer and saying nothing about why.
• An employee who works the notice period, or simply stops coming in, without saying clearly what they object to.

Each of these can be worked through, but not by assuming that a resignation under pressure is automatically a dismissal, or that a resignation is automatically voluntary. For an employee, resigning on a weak case gives up both the job and the claim. For an employer, accepting or engineering a resignation can cost as much as an unfair dismissal.

Contents

1. What constructive dismissal is
2. When the role is taken away
3. When a request is refused
4. After a disciplinary process, or “resign or be dismissed”
5. The resignation letter
6. Timing, notice and staying on
7. The evidence that matters
8. Time limit, compensation and appeals
9. For employers
10. Negotiating an exit while the position is disputed

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1. What constructive dismissal is

The law allows an employee on an indefinite contract to leave without notice where there is a good and sufficient cause. It does not say when leaving amounts to a dismissal. That has been left to the Industrial Tribunal and the courts, which apply principles drawn from English employment law.

Malta has no binding precedent: earlier decisions persuade but do not bind. A few are relied on again and again. In Bonello v OZO Services (Industrial Tribunal, 2023), the Tribunal set out three elements: a breach of the contract by the employer, a breach serious enough to justify resigning, and a resignation that follows without long delay. The Court of Appeal adopted the same elements in Veselji (2026). An older formulation, from Camilleri v Bortex Clothing Industry (Industrial Tribunal, 2014), is still cited: the employer must have unreasonably put the employee with their back to the wall, so that leaving was the only way out, over matters that are serious rather than trivial.

Put as questions, the decisions ask four things:

• Did the employer breach the contract? An express term, such as pay or duties, or the implied duty not to destroy the trust and confidence between employer and employee.
• Was the breach serious? Serious enough to justify leaving. A single act can be enough; so can a series of acts, the last of which is the final straw.
• Did the employee leave because of it? The breach must be the reason for the resignation, not an occasion for a departure already planned.
• Did the employee accept it? Delay, or carrying on without objection, may be read as accepting the change.

The Court of Appeal often puts the question the same way: was the employee left with no choice but to resign, with their back to the wall? The burden is on the employee, and the Tribunal looks at the facts objectively. Describing a departure as forced does not prove it.

There must also be a resignation. In Veselji v St Andrew’s Football Club (Court of Appeal, 2026), a coach on a fixed-term contract stopped turning up after a new head coach arrived with his own assistant. He never sent a resignation, and raised constructive dismissal only on appeal. The Court held that there had been neither a dismissal nor a resignation, so he could not argue that he had resigned with his back to the wall. He recovered only unpaid wages, and none of the half pay for the rest of the term that a fixed-term employee is owed when the employer ends the contract early.

In practice. Most claims fail on the second or fourth question: the conduct was unwelcome but not a serious breach, or the employee’s own response suggested they had accepted it.

2. When the role is taken away

A role can change substantially while its title and salary stay the same. Authority, reporting line, team, access to information and a place in decisions are part of the job, and taking them away can be a breach even if nothing in the payslip changes. The contract matters: some contracts give the employer wide room to change duties, and an agreed reorganisation is not a breach.

The questions are practical. Was the change proposed or imposed? Was it agreed? What reason was given? What did the employee say at the time?

Manicolo v Broadcasting Authority (Court of Appeal, 2026) shows how the whole course of conduct is weighed. The Authority’s long-serving Board Secretary faced disciplinary charges while on long-term sick leave for a serious illness, and over the years many of his responsibilities had been taken from him. The disciplinary board recommended that he stay on in a different role. Before any penalty was decided, he wrote that he was prepared to return and accept a reprimand, but that if the Board no longer trusted him, his letter should be treated as a resignation. The Authority accepted it with immediate effect.

The Industrial Tribunal had found the resignation voluntary. The Court of Appeal reversed that. Looking at the treatment of the employee as a whole, the removal of his responsibilities and the circumstances of the letter, it found he had been left with no choice: a very clear case of constructive dismissal. It sent the case back to the Tribunal to assess compensation, without fixing an amount.

A change imposed for a genuine business reason is a different matter. In Camilleri v Bortex (2014), a purchasing manager of 21 years was asked to take on the oversight of a warehouse at the group’s plant abroad, with regular travel, as production moved there. Other managers were travelling too, and the employer offered him an assistant to lighten the load. He refused and resigned, despite being told the refusal would have consequences. The Tribunal held that the company had to adapt to survive and could not give up its right to run the business, and rejected the claim.

In practice. For an employee, a dated record of how the role changed may matter as much as the final letter. For an employer, a conditional or reluctant letter is not a safe resignation to accept on the spot, least of all after a process that recommended keeping the employee on.

3. When a request is refused

A refused request may explain why someone leaves without being a breach. The starting point is what the contract, the collective agreement or the policy actually gives.

In Bilocca v HSBC Bank Malta (Industrial Tribunal, 2023; Court of Appeal, 2024), a financial crime manager resigned after the bank refused him a career break to take a one-year post with another firm in financial services. The collective agreement left career breaks to the bank’s discretion, and the bank was concerned about a conflict of interest. The Tribunal found the refusal justified and rejected the claim. It also weighed that his resignation letter thanked the bank and left the door open to returning, that he worked his notice, and that he raised a grievance only after resigning. The appeal failed because it raised no point of law.

In practice. Identify the entitlement that was breached before treating a refusal as a reason to leave. A strong personal reason for wanting something does not make its refusal a breach.

4. After a disciplinary process, or “resign or be dismissed”

Disciplinary proceedings do not by themselves make a later resignation forced. What matters is the process, its outcome, the terms of any alternative role and what was actually said.

In Barbaro-Sant v World Aviation Group (Industrial Tribunal, 2024; Court of Appeal, 2025), a long-serving finance executive resigned after a disciplinary process in which the employer decided not to dismiss her and offered her a different role, which she considered inferior. She resigned while still in contact with management about the offer, without giving a final answer to it. Her letter gave no reason. She said she understood the choice was the new role or dismissal, but the Tribunal found that no one had threatened dismissal: she had assumed it. The claim was rejected, and the appeal was declared null because it only offered a different view of the facts.

In Bonello v OZO Services (2023), a maintenance coordinator who faced serious disciplinary allegations was removed from the client site where he had worked for years and offered night work cleaning buses at the same pay. He refused it, negotiated, and resigned three months later, on being told the disciplinary process would resume. The Tribunal held that the employer could reasonably offer other work while a serious process was pending, that the resignation was neither immediate nor prompt, and that he had resigned because he sensed the process might end in dismissal. The claim failed.

An ultimatum does not settle the question either way. In Spiteri v Malta Gaming Authority (Court of Appeal, 2023), the Authority’s Head of Enforcement resigned the day after a meeting at which, on the evidence of both sides, he was told his position was untenable because of an undeclared outside interest and that he would be dismissed if he did not resign. The Tribunal found the resignation voluntary, given after he himself accepted that his position could not continue, and the Court of Appeal confirmed it. In Manicolo, by contrast, being told to let the disciplinary process run or resign was part of the conduct that left the employee with no choice.

In practice. Before deciding on an alternative role, get it in writing: duties, pay, hours, reporting line and employing company. Ask whether it is an offer, an instruction or a condition of staying, and what happens if it is declined. If you are told to resign or be dismissed, write down who said it, when and in what words, and take advice before replying.

5. The resignation letter

The words “under protest” are not required. In Azzopardi v Malta Public Transport Services (Court of Appeal, 2020), the Court held that resigning under protest is one of the elements of constructive dismissal, but that the employee need not say so: it is enough to show failings by the employer that left no other way but to leave. Even so, the letter is often the best evidence of why the employee left, and the Tribunal reads it closely.

• In Spiteri, the letter defended his conduct and then thanked the Authority for its support. The Court described that as far from the conduct of someone backed against the wall by their employer.
• In Bilocca, a friendly letter that thanked the bank and did not exclude a return counted against the claim.
• In Barbaro-Sant, the Tribunal did not expect detailed reasons, but said it would have been important for the letter at least to refer to her feeling forced to resign.
• In Manicolo, the last sentence of a conditional letter was, for the Court, itself a sign that he felt he had no choice.
• In Azzopardi, a bus driver who could no longer drive for medical reasons waited months on unpaid leave for alternative work that never came. His letter said he was resigning “for medical reasons”, not because of anything the employer had done. The Tribunal held that against him, and although the Court of Appeal said the words “under protest” were not needed, it still found no constructive dismissal on the facts (section 7).

In practice. A letter should state, accurately and without exaggeration, the conduct relied on and that it is the reason for leaving. Formulaic words cannot supply missing facts, and a warm goodbye can undo a good case. Take advice on the letter before sending it, not after.

6. Timing, notice and staying on

An employee who stays on after a breach risks being taken to have accepted it. Delay is not fatal in itself, and employees often need time to take advice or find other work, but the objection should be clear and in writing while they stay.

Working the notice period can also count. In Bilocca, the Tribunal held that because he worked his notice rather than leaving at once, he had not shown that he did not accept the breach. Not every case will treat notice that way, but it is a risk to weigh before resigning with notice.

On a fixed-term contract, leaving early has its own cost. The law makes an employee who leaves before the term ends pay the employer half the wages for the rest of the term, unless there was a good and sufficient cause. In Charichelon v Greaves (Court of Appeal, 2017), an employer claimed that sum from a make-up artist who left a four-year contract early, citing constructive dismissal. The Court was not satisfied that constructive dismissal was proved: she had never complained about the conditions she later described, and her own appraisals contradicted parts of her account. But it accepted her wider defence that she had a good and sufficient cause to leave, on uncontradicted medical advice that her working environment was making her ill and that she should change jobs. She owed nothing.

Stopping work is no safer. Veselji shows that simply ceasing to attend, without resigning or engaging with the employer, can leave the employee with neither a dismissal nor a resignation to build a claim on.

In practice. Decide the order of steps with advice: objection in writing, any grievance, the resignation, and whether notice is worked. On a fixed-term contract, the stakes run both ways: half the pay for the rest of the term, owed by whichever side ends it early without good cause.

7. The evidence that matters

A useful record shows what the role was, what changed, what the employee said about it and why they left:

• the contract, any amendments, role descriptions and the relevant policies or collective agreement;
• emails and notes recording changes to duties, authority, pay or reporting lines;
• meeting notes, with dates and who was present, including any offer or ultimatum;
• grievances, disciplinary papers, any internal appeal and the replies;
• the resignation and the employer’s reply;
• evidence of loss and of the search for new work, if compensation is claimed.

Keep a dated chronology that separates documents from recollections. Keep material lawfully: taking confidential company files or other people’s personal data can create a new problem, and may hand the employer a defence.

An internal grievance can show that the problem was raised and that a solution was tried. In Bilocca, the Tribunal expected an employee to show he had done what was possible and reasonable to resolve his complaints, and treated a grievance filed after resigning as an afterthought. In Barbaro-Sant, not using the internal appeal counted against her, and in Azzopardi so did never using the grievance procedure under the collective agreement. The Court of Appeal added in Azzopardi that he had never applied for the vacancies that came up, relying only on his union, while the employer had no duty to create a post for him and kept open its offer to take him back if his health allowed. An employee who wants alternative work has to pursue it. In Manicolo, the Authority accepted that constructive dismissal can happen before internal proceedings end. Using the grievance procedure is not a legal requirement in every case, but not using it needs a reason.

In practice. The evidence is easiest to gather while you are still employed, and hardest to explain if it was gathered improperly.

8. Time limit, compensation and appeals

Four months. A constructive dismissal claim is a claim for unfair dismissal, referred to the Industrial Tribunal within four months of the effective date of the alleged breach. Where the resignation, the notice and the last day of work fall on different dates, identifying that date needs care. Do not assume that a grievance or settlement talks stop the time running.

Compensation, not reinstatement. For managerial and executive posts that require special trust, the Tribunal will not order reinstatement, so compensation is the remedy. The law tells the Tribunal to consider the real damages and losses and circumstances such as age and skills, but sets no formula. A finding of constructive dismissal does not carry a standard number of months’ salary.

Appeals on a point of law. A Tribunal decision can be appealed to the Court of Appeal only on a point of law, and within twelve days. Bilocca and Barbaro-Sant show how appeals that ask for a different view of the evidence fail. Manicolo adds an important qualification: whether the facts amount to constructive dismissal is itself a legal question, so an appeal is not invalid merely because the Court must examine the evidence to answer it. The line between disputing the facts and disputing their legal characterisation can decide whether an appeal is heard at all.

In practice. The calendar starts earlier than most people expect, and the appeal window is very short. Both should be planned before the resignation, not after.

9. For employers

A resignation that follows pressure is examined as closely as a dismissal. The cheapest constructive dismissal claim is the one that never arises.

• Make changes to a senior role openly, with reasons in writing, and check the contract allows them.
• Run disciplinary processes fairly and on the facts, including when the employee is ill or absent.
• Put any alternative role in writing and give time to consider it.
• Avoid “resign or be dismissed” conversations unless dismissal would itself be justified, and record exactly what was said.
• Do not accept a conditional or ambiguous resignation on the spot; clarify it.
• Answer a grievance properly, even after notice has been given.

For the line between redundancy and dismissal for cause, see redundancy or dismissal in Malta.

In practice. Most of the exposure in a forced resignation comes from what was said in one or two meetings and never written down.

10. Negotiating an exit while the position is disputed

Many disputes about a forced resignation end in an agreed exit. The agreement should deal with the dispute expressly: the claims being settled, the agreed termination date and how the termination is described, the payments, bonus and benefits, and any restrictions after leaving. For senior appointments, check separately whether a directorship or other office must also end, and how any regulator is told. A full and final settlement usually waives every claim, so read it before signing; see reviewing a proposed exit agreement and preparing for an executive exit.

In practice. Clear proposals and an accurate record give both sides a better basis for valuing the dispute. What is written now may become the central evidence later.

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How I can help

A guide can set out the test. It cannot tell you whether your situation meets it, or how a Tribunal would read your letter. That is the work of an adviser who has seen the question from both sides.

For executives and senior employees, I advise before you resign:

• assessing whether the employer’s conduct amounts to a serious breach;
• the order of steps: objection, grievance, resignation and notice;
• the wording of the letter, and the time limits;
• negotiating an exit instead of resigning, where that serves you better.

For employers, I advise when a senior departure is contested:

• testing a proposed change of role, disciplinary outcome or alternative offer before it is made;
• responding to a resignation that alleges a breach;
• negotiating an agreed exit that settles the dispute.

The aim, on either side, is a result that holds, without the cost and delay of a claim. The earlier I am involved, the more options remain open.

This guide is general information about Maltese law, not advice on any particular situation. Do not resign on the strength of it.

Next step: Send an enquiry. Read also: Executive exits · Exit review · Restructuring advisory · Negotiation and settlement · FAQs for executives.