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Gibraltar: Business Environment

The Labour Market

Businesses in Gibraltar are required to register their and their employees' details with the Employment and Training Board - details of the business within three months of commencement, and details of employees within 14 days of engagement. Job vacancies must also be notified to the Board, since it administers the work permit system. This is no mere bureaucratic form-filling exercise: the Board's stamped and signed Notice of Terms of Engagement is needed for an employee to obtain a Registration Card from the Immigration Department, or a Social Insurance Card from the Department of Labour and Social Security. An employer pays a designated amount per employee per annum to the Board's Employers' Insolvency Fund, which compensates the employees of insolvent enterprises for unpaid wages etc.

There is a statutory minimum wage, and Gibraltar's labour legislation largely mirrors that of the UK, with a system of Industrial Tribunals to deal with cases of unfair dismissals etc. Unions exist in Gibraltar, but employees are not obliged to join them. There is legislation which permits statutory determination of wage levels in the event of an impasse between management and workers. The statutory minimum of holidays is 15 days, rising to 20 days after three years, 22 days after five years and 25 days after eight years; in addition to public holidays.

Social security contributions are compulsory for employed persons, but voluntary for the self-employed. There is a normal range of benefits, but access to them is tied to contribution record in many cases. Insurance contributions are payable at a standard flat rate for each week of employment.

In November 2006, the government published new proposals to reform the jurisdiction's system of social security contributions.

The proposals aimed to ensure that low paid workers, genuine part time workers and casual workers paid significantly lower social insurance contributions, and came into effect on January, 1, 2007.

The new scheme was based on earnings, but contributions were capped and hundreds of low paid and part-time workers would enjoy reductions in their contribution rates.

The new scheme also introduced reforms ensuring that future part-time workers would be entitled to an old age pension. Under the previous Scheme part-time workers (i.e. those working, or registered as working less than 15 hours a week) did not accrue a right to an old age pension.

As Gibraltar is part of the EU, EU nationals have the right of free movement of labour and should have no difficulty in obtaining a resident's card. Gibraltar does not encourage "low grade" labour because it has fairly full employment, with many Spanish commuting daily as well as a good number of ex-pats. However, special skills such as IT are in demand due to the jurisdiction's endeavours to encourage growth in the e-commerce sector.

The system of 'Qualifying Individuals' has traditionally encouraged various types of special immigrant. See Offshore Tax Regimes for further details.



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