The Industrial Tribunal Affirms That an Employment Relationship Exists Beyond Formal Registration
The recent Industrial Tribunal ruling in Absolute Services Ltd vs Ma. Genia Montecioso confirms that an employment relationship exists based on actual work performed and payment received, not just on formal contracts or official registration. This important decision underscores that the reality of work, rather than paperwork, defines employment under Maltese law.
In the decision of Absolute Services Ltd vs Ma. Genia Montecioso (decided on the 10th of March, 2025), the Industrial Tribunal clarified a critical point in local employment law: an employment relationship is not solely defined by the formal signing of an employment contract or official registration with Jobsplus. Rather, it is the act of providing work and receiving remuneration for that work that establishes such an employment relationship.
The case revolved around a fixed-term employment contract between Absolute Services Ltd (the “Company”) and Ms. Montecioso (the “Employee”), dated the 2nd November 2020, which stipulated a three-year term. The company claimed that the Employee resigned prematurely on the 23rd of September 2023.
In terms of article 26 (12) of the Employment and Industrial Relations Act (Chapter 452 of the laws of Malta; the “Act”), “An employee who abandons the service of his employer before the time definitely specified by the contract of service shall pay to his employer a sum equal to one-half of the full wages to which he would have become entitled if he had continued in the service for the remainder of the time so specifically agreed upon.” For this reason, the Company alleged that the Employee breached the terms of her employment contract and thus sought €2,887.87 in compensation.
However, the Employee argued that she had, in fact, fulfilled the three-year term since she had started working with the company in September 2020, prior to the formalisation of her employment, regarding when her contract was signed or her employment was formally registered with Jobsplus. She presented payslips and other documentation proving that she was engaged in work and being remunerated for it from as early as August or September 2020 as opposed to the employment contract dated 2nd November, 2020. The Company further confirmed that she started working with the client before applying for the work permit and formalising her employment status.
Essentially, the official signing of her employment contract and registration with Jobsplus were seen as steps to formalise an already-existing relationship, not as the beginning of the employment itself. In doing so, the Tribunal reaffirmed the definition under article 2 of the Act which recognises employment as any relationship where a person provides work or services for another and receives compensation, as per the below:
““contract of service” and “contract of employment” means an agreement, (other than service as a member of a disciplined force except as may be provided in or under this Act) whether oral or in writing, in any form, whereby a person binds himself to render service to or to do work for an employer, in return for wages…”
In its decision, the Tribunal rejected the Company’s claim, ruling that the Employee had indeed worked for the full three-year period as stipulated in the employment contract. The Tribunal emphasized that allowing bureaucratic or other administrative delays for the formal registration of the engagement of employment of the Employee to undermine the recognition of real work performed would be unjust for the Employee.
How Can AE Help
Employment law can be complex, especially when formalities like contracts and registrations don’t fully capture the real working relationship. At AE, we assist both employers and employees in understanding their rights and obligations beyond paperwork, ensuring that genuine work arrangements are properly recognized and protected under the law.
Whether you need guidance on employment contracts, dispute resolution, or compliance with local labour regulations, our team provides clear, practical advice tailored to your specific situation, helping you navigate employment matters with confidence and clarity.
