High TCN turnover could block employers from recruiting more foreign staff

Employers with high turnover rates among third-country nationals (TCNs) could soon be restricted from employing additional foreign workers under a new labour migration policy, the Government has announced.

Businesses that report significant termination rates over the previous 12 months could be barred from applying to hire new TCNs. The story was first reported by Times of Malta and confirmed in a press briefing on Wednesday by Prime Minister Robert Abela and Home Affairs Minister Byron Camilleri.

The policy will not apply to micro firms, defined as those employing fewer than ten people.

For small firms (10-50 employees), any termination rate exceeding 50 per cent of their workforce will result in failure of the labour market needs test, leading to the rejection of new applications for Third-Country Nationals (TCNs).

Medium-sized firms (51-249 employees) will have a maximum allowable termination rate of 35 per cent, while large firms (250+ employees) will be capped at 40 per cent.

The work permit renewal period after completing one year of employment will be extended from one year to two years, provided the TCN has been offered a contract with a minimum validity of two years.

The measures are subject to a public consultation process that will run up until 9th February.

In a press release issued on Tuesday (yesterday), the Ministry for Home Affairs, Security, and Employment outlined the principles underpinning the reform, focusing on labour market stability, the protection of workers’ rights, and ensuring that immigration for work aligns with Malta’s economic needs. The policy also emphasises skills development and workforce training as essential components of the reform.

Malta’s growing TCN population

Over the past decade, Malta has experienced a significant influx of foreign nationals, with the foreign population growing from just over 20,000 in 2011 (under five per cent of the population) to more than 158,000 today, representing over 28 per cent of the total population.

The majority of foreigners living in Malta are non-EU nationals, with India, the Philippines, and Nepal being the most represented nationalities. This population boom has fuelled Malta’s economic growth and revitalised the rental sector, as many locals invested in buy-to-let properties.

However, this growth has not been without challenges. The rapid increase in foreign workers has led to the proliferation of employment agencies, some of which have engaged in unethical practices, such as requiring prospective workers to pay large upfront fees to obtain visas. The Maltese Government has since taken action to crack down on these practices.