My employer responded to my labour case with a counterclaim against me

Yes, this is a familiar pressure tactic, and yes, the counterclaim is normally heard in the same case as your claim — the court deals with both and offsets any amounts it actually awards. But do not let the tactic work: a counterclaim is only as strong as its evidence, and the burden sits on the employer. For alleged equipment damage, they must prove the damage happened, that you caused it, and what it genuinely cost — not just assert it. For training costs, recovery generally requires a prior written agreement in which you undertook to repay defined training expenses in defined circumstances; a figure invented after you sued, never mentioned during your employment or in your final settlement discussions, tends to impress judges very little. The timing itself is your friend: point out that no damage report, deduction, or training-cost demand existed before you filed for your salary and gratuity. Respond formally to the counterclaim rather than ignoring it — submit a written reply with your contract, any handover or asset-return records, and the absence of any signed training-cost undertaking. Your own claim continues in parallel and is not suspended by theirs. An employment lawyer can prepare the defence to the counterclaim alongside pressing your original claim.