Mutual Trust And Good Faith Cannot Replace A Binding Agreement, Rules Court Of Appeal

This case, which was determined by the Court of Appeal by means of a final judgment dated 3^rd June 2026, concerns an appeal filed by The Nuance Group (Malta) Limited against a decision of the Industrial Tribunal delivered in favour of an employee of the company, who had been employed on an indefinite 30-hour weekly contract.

The employee contended that, pursuant to an agreement allegedly reached in January 2013 between Nuance and the General Workers Union, employees engaged on indefinite reduced-hours contracts were to be granted priority, according to seniority, whenever full-time Sales Advisor vacancies arose. She maintained that, upon the occurrence of such a vacancy in July 2015, she ought to have been placed on a 40-hour full-time contract, but that Nuance only regularised her position with effect from 1st November 2016, thereby causing her to suffer loss of remuneration for the intervening period.

The Industrial Tribunal upheld the employee’s claim. It found that, notwithstanding the fact that the relevant minutes of the meeting had not been signed, Nuance’s conduct, when assessed in light of the surrounding circumstances, disclosed elements of bad faith or unfair treatment on the company’s part.

In reaching its decision, the Tribunal relied on principles of mutual trust, good faith and social justice within employment relations, and ordered Nuance to pay Ms Marmarà the arrears allegedly due for the period claimed, namely from the 1^st of August 2014 to the 30^th of October 2016.

Nuance appealed from the Tribunal’s decision, principally on the basis that no legally binding agreement had ever come into existence. It argued that, while discussions had taken place with the General Workers Union, no final agreement had been concluded, formalised, or signed by the parties, particularly since Nuance had never agreed with the Union’s proposal.

Nuance further asserted that it retained discretion to determine whether, and at what point, the engagement of a full-time replacement was operationally required, and that employees did not have an automatic entitlement to be appointed on a full-time basis solely by reason of another employee’s departure.

The Court of Appeal held that the key issue was whether the alleged arrangement gave rise to a binding contractual obligation. It held that the matter raised a question of law. The Court found that the alleged arrangement had remained merely a proposal, having never been formalised, signed, or incorporated into any legally binding instrument. Accordingly, in the absence of such an instrument, no contractual obligation arose requiring Nuance to offer the employee full-time employment upon the occurrence of the vacancy.

The Court also upheld Nuance’s argument concerning the absence of signatures. It held that the wording of the email, namely “so that we can all sign”, did not, of itself, bring a binding agreement into existence. Rather, it demonstrated that the parties contemplated signature as a necessary step for the arrangement to take legal effect. Since neither the minutes nor the proposed agreement were ever signed, the proposals remained without binding legal force.

Accordingly, the Court of Appeal upheld Nuance’s appeal, revoked the decision of the Industrial Tribunal in its entirety, upheld Nuance’s pleas, and dismissed the employees’s claims. The Court further ordered that the costs of both instances be borne by the employee.

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