Civil court hears contract pay claims but not discrimination

On 9 January 2026 Madam Justice Audrey Demicoli, sitting in the First Hall of the Civil Court, ordered an employee to repay €33,333.28 that his employer had paid him twice. The court held that it could hear his counterclaim for allowances and bonuses under his contract, but not any complaint of discriminatory treatment. It rejected the employer's plea of prescription because the oath required by article 2160 of the Civil Code was never taken in its set form.

The facts

Korporazzjoni Ghall-Intrapriza Ta' Malta vs S.J. began as a claim by Malta Enterprise Corporation against one of its employees. He worked for the corporation as a commercial representative and was posted abroad on secondment to a government ministry.

Under his contract, the corporation paid his salary and a post adjustment allowance, an extra payment for serving abroad. When a new agreement took effect in April 2021, the ministry started paying that allowance directly. The corporation kept paying it too, so from May to December 2021 he received it twice.

The corporation sued to recover €33,333.28. He did not dispute the overpayment, but he argued that the corporation owed him more than €110,000 in allowances, performance bonuses and a qualification allowance. He asked the court to set one debt off against the other under article 396 of the Code of Organisation and Civil Procedure (Chapter 12 of the Laws of Malta).

What the court held

The corporation's own claim was straightforward. The employee had written that he was not contesting the double payment, and he agreed in evidence that he received it. The court granted both of the corporation's requests and ordered him to repay the full sum, with legal interest from the date the judgment becomes final.

The corporation raised three defences to the counterclaim. First, it argued that it was not the right party to answer it. The court rejected this because every sum he sought arose from his employment with the corporation or from its collective agreement.

Second, the corporation argued that the court had no jurisdiction because the counterclaim alleged discrimination. Article 30 of the Employment and Industrial Relations Act (Chapter 452 of the Laws of Malta) sends complaints under articles 26 to 29 to the Industrial Tribunal, and article 75 makes that jurisdiction exclusive.

The court agreed on discrimination but not on the rest. It held that article 75 lists the cases that must go to the tribunal and does not remove the civil court's general power over civil disputes. The court held that it “xorta għandha l-kompetenza illi tidentifika jekk ġewx osservati l-kundizzjonijiet t’impieg skont il-ftehim kuntrattwali illi kien viġenti bejn il-partijiet” (still has the competence to establish whether the conditions of employment under the contract in force between the parties were observed).

Third, the corporation pleaded that the claim was time-barred under article 2148(d) of the Civil Code (Chapter 16 of the Laws of Malta), which ends actions for salary after 18 months. Article 2160(1) says this short prescription has no effect unless the party pleading it declares on oath, of its own accord, that it is not a debtor or does not remember whether the debt was paid.

No one gave that oath in the set form. The corporation's sworn reply said it owed no payment at all of what was sought, and the court held that this was not the formula the article requires. The court added that the corporation's head of human resources had testified that bonuses would be paid once the paperwork arrived, which amounted to a renunciation of prescription.

On the merits, the allowance claim failed. Until February 2017 he received the rate in his contract, which was also his predecessor's rate, and from then on he received the higher rate agreed with him. What the ministry refunded to the corporation was a matter between those two bodies.

The qualification allowance required a written application, and none was proved. On the performance bonus the court declined to decide, because the bonus depended on targets set by the employer and there was no performance report on which to fix a figure. It left him free to seek the bonuses by following the usual procedure, and ordered him to pay the costs of the counterclaim.

Why it matters

An employee with a pay grievance need not frame everything as discrimination. Claims that an employer failed to pay what the contract promises can go to the civil courts, while complaints of unequal treatment against colleagues belong before the Industrial Tribunal. A defendant who pleads short prescription must give the article 2160 oath in its exact words, or the plea fails.

Where it sits

On jurisdiction, the court followed the Court of Appeal (Superior Jurisdiction) (15 July 2025), which distinguished a court's jurisdiction from the remedy a party seeks. It also relied on the Court of Appeal (Superior Jurisdiction) (11 November 2011), which held that the tribunal's exclusive jurisdiction covers only the cases Title I of the Act assigns to it. On who is the proper defendant, it cited the Court of Appeal (Superior Jurisdiction) (26 May 2017) and article 959 of the Civil Code.

On prescription, the court traced how the oath changed after the amendments made by Act I and Act VII of 2017: the debtor must now take it unprompted. It cited Automated Revenue Management Limited pro et noe vs Topcar Limited (First Hall of the Civil Court, 17 January 2018), the Court of Appeal (Inferior Jurisdiction) (26 January 2018) and the First Hall of the Civil Court (17 September 2024), which held that the wording of the oath cannot be varied.

Source

First Hall of the Civil Court, 853/2023, 9 January 2026.