An employee’s full liability for financial loss

Legal commentary and case law identify four separate grounds for an employee’s full liability under Articles 203(2) and 207(1), point 2, of the Labour Code: (1) loss caused intentionally in the course of, and in connection with, the performance of employment duties; (2) loss resulting from unlawful conduct by the employee that constitutes an offence under the Criminal Code; (3) loss caused by acts unrelated to the performance of employment duties; and (4) loss taking the form of a shortage for which the cause and fault are unclear. A shortage is an unexplained reduction in or deficit of the employer’s tangible assets; the person liable on this ground must be an employee entrusted with those assets and accountable for them.

These grounds are distinct and independent. They do not have to be established cumulatively.

Settled case law on the first limb of Article 203(2) holds that the employer must establish every element of liability; none is presumed by law. It is therefore for the employer to prove in full the act, its unlawfulness, the loss and the employee’s intent (see, among others, Supreme Court of Cassation Judgment No. 9 of 31 January 2018 in civil case No. 1504/2017 and Judgment No. 14 of 6 March 2018 in civil case No. 2401/2017). An act in this context means specific conduct by the employee that caused the employer loss. The act is intentional if the employee understood its socially harmful nature, foresaw its harmful consequences and either intended those consequences or accepted that they might occur. This is determined from the objective circumstances and evidence in the case.

Legal assistance is needed in bringing or defending claims for the full financial liability of an employee or employer. This article is not a legal opinion or advice about any particular situation or person. For advice on an employee’s liability for loss, you can contact a law firm practising employment law.