Supreme Court: employee may be personally liable for invalid termination notice
With its latest judgment, the Supreme Court has opened the topic of employees’ liability for damage caused by invalid termination notices. The court held that it sufficed that an invalid termination notice had been an important but not necessarily the only cause of the incurred damage.
In the case before the court, a director of a company decided to make organisational changes, based on which she gave a notice of termination to an employee on the grounds of redundancy. The court then found the termination notice null and void. The employer had to compensate the employee for wages plus late payment interest and cost of court proceedings, amounting to more than one million Czech crowns. The employer decided to claim damage compensation from the director, on the grounds of her liability for the incurred damage.
The Supreme Court disagreed with the lower-degree courts that had held that there was no causal link between the director’s purportedly unlawful conduct and the incurred damage. The lower degree courts had also argued that the director’s fault could not be established as managerial decisions were not subject to judicial review. In contrast, the Supreme Court summarised that the preconditions for an employee’s liability for damage consist of a breach of the employee’s work duties, causality between the breach of duties and the occurrence of damage, and fault on the part of the employee.
As for causality, the Supreme Court held that the breach of working duties does not have to be the only cause of the incurred damage, as long as it is an important, substantial and considerable cause. In the case in question, causality had clearly been established, as, had the director not breached her working duties (had not given a termination notice contrary to the Labour Code), no damage would have occurred.
As for fault, the Supreme Court held that considering all circumstances of the case and the personal situation of the director (namely her education, and practical experience so far), she should and could have known that she was acting unlawfully and could cause damage to the employer by issuing the termination notice.
The Supreme Court has thus opened a way to employees’ liability for damage caused by giving invalid termination notices, stating that it sufficed that the null and void termination notice was an important, while not necessarily the only, cause of the damage. Fault in the form of simple negligence (should and could have known) can be established almost always when legal regulations concerning the individual’s work are breached. For sake of completeness, please note that for fault by negligence, employees’ liability for damage is limited to 4.5 times their average monthly earnings.