By Dr Nicole Vassallo – Junior Associate
The term “wages” as defined in Article 2 of the Employment and Industrial Relations Act (Chapter 452 of the Laws of Malta), excludes at the outset any bonuses or allowances related to performance or production, payable by the employer in favour of the employee. The definition of this term however includes remuneration or earnings and any statutory bonuses payable to the employee as may be established by the Minister of Finance or as the Government may announce in the General Estimates from time to time, i.e., what we generally call ‘Government Bonuses’.
The Industrial Tribunal was established by Article 73 of the Act, and was granted exclusive jurisdiction to decide upon all cases of alleged unfair dismissal, all claims for sums which may be due to an employee or to an employer following the termination of a contract of service before the expiration of the specified term (where the contract of service is for a fixed term), and all cases falling within the Tribunal’s jurisdiction under Title I of the Act or any regulations therein prescribed.
In April 2022, the Industrial Tribunal was faced with an application filed by an irritated employee demanding payment of a performance bonus from his employer, the Malta Financial Services Authority, which the employee claims was part of his salary and therefore should have been paid. The employee also requested the Tribunal to liquidate an additional amount payable in compensation for the Authority’s breach of the employment conditions which had been previously agreed upon. The Authority rebutted this claim with a preliminary plea challenging the Tribunal’s lack of competence to consider and decide upon the employee’s claim, by making reference to local jurisprudence and Article 75 of the Act regarding the exclusive jurisdiction of the Tribunal, as cited in the previous paragraph. By virtue of this plea, the Authority claimed that it was the Civil Court that had the competence to consider and decide on the application put forward by the employee regarding payment of the performance bonus, not the Industrial Tribunal.
The Industrial Tribunal consequently resorted to a number of judgments on the subject matter regarding an employer’s breach of the employment agreement or employment conditions, namely the cause delivered by the Industrial Tribunal on 29 November 2022 in the names of ‘Ioannis Katakis v. Pinnacle Gaming Group Limited’, where it was decided that an employee seeking damages for a breach of employment conditions and/or his contract of employment must lodge his claim before the Civil Courts, not the Industrial Tribunal. The Tribunal stated the following regarding the subject in issue:
It-Tribunal Industrijali jiddeciedi, li din il-materja mhix kompitenza ta’ dan it-Tribunal Industrijali li jiddeciedi fuq dawn l-aspetti ta’ ksur ta’ kundizzjonijiet tax-xoghol u kuntratti bejn il-partijiet ghax il-kompitenza ta’ dan it-Tribunal Industrijali hija li jiddeciedi jekk it-terminazzjoni ta’ l-impjieg kienitx ingusta u jekk jirrizulta li tkun ingusta jghati rimedju. Ghaldaqstant, rigward ksur tal-kundizzjonijiet tax-xoghol u kuntratti ir-rikorrenti ghandhu jirreferihom lill Qorti kompitenti li tiddeciedi fuq din il-materja.
The provisions of the Employment and Industrial Relations Act made sure to define the term “conditions of employment”, which term includes wages (which term has been defined above), the period of employment, the hours of work and leave and benefits arising from a contract of service, terms of engagement, terms of work participation, the manner of termination of any employment agreement and the mode of settling any differences which may arise between the parties to the agreement.
Notwithstanding the above, the Employment and Industrial Relations Act caters for those employees that fall victim to a breach of employment conditions by the employer where this concerns discrimination, breaches of the principle of work of equal value, victimisation or harassment. Article 30 of the Act allows said employees to lodge a complaint before the Industrial Tribunal, that shall hear the complaint and carry out any investigations as it deems fit. If the Industrial Tribunal is satisfied that the complaint is justified, it may take such measures as it may deem fit including the cancellation of any contract of service or of any clause in a contract or collective agreement which is discriminatory and shall order the payment of compensation for loss and damage sustained by the aggrieved party due to the breach.
In arriving at its decision, the Industrial Tribunal also referred to the judgment delivered by the First Hall of the Civil Court on 30 September 2010, in which the latter had gone into the merits of what the legislator intended when drafting the provisions of the Act, claiming that the parameters of the Tribunal’s competence must not be interpreted widely and freely. The Civil Court First Hall therefore concluded that:
Għalhekk, salv fil-każijiet indikati fil-liġi stess, id-disposizzjonijiet tal-Kap. 452 ma jistgħux jiġu nterpretati b’mod wiesgħa tant li jiġu estiżi sabiex jinkludu setgħat li l-leġislatur ma ndikax fil-liġi għax ma riedx li dawn jidħlu fil-parametri tas-setgħat tat-Tribunal. Fi kliem ieħor, il-ġurisdizzjoni tat-Tribunal Industrijali u s-setgħat li għandu huma dawk espressament indikati fil-liġi stess li stabbiliet il-parametri tal-operat tiegħu.