Non-Pecuniary Damages in Occupational Accidents: How They Are Determined and Why They May Be Reduced Due to Other Compensations or Pensions

Non-pecuniary damages resulting from occupational accidents are among the most complex aspects of compensation law. They concern the suffering, pain, and the physical and psychological consequences that an employee or their relatives endure as a result of the incident. Unlike pecuniary damages, which are calculated on objective grounds (such as lost income, treatment costs, etc.), non-pecuniary damages are assessed based on fairness – according to Article 52 of the Obligations and Contracts Act (OCA), taking into account the specific circumstances of each case.

At the core of compensation lies Article 200 of the Labor Code (LC), which establishes the strict (objective) liability of the employer for damages caused to an employee during or in connection with the performance of their work duties. This means that the employer owes compensation regardless of fault, as long as there is a causal link between the accident and the injury.

Determining the Amount

The amount of non-pecuniary damages is determined individually by the court based on:

• the degree and duration of the pain and suffering;

• the age and social status of the injured person;

• the permanence of the injury (temporary or permanent incapacity for work);

• the impact on personal and professional life;

• behavioral and psychological consequences of the accident.

The court is guided by the principle of fairness, while also taking into account the established ranges in judicial practice for comparable cases. This ensures predictability and equality in the administration of justice.

The Question of Reducing Compensation

In practice, however, an important and often controversial question arises:
Should the compensation for non-pecuniary damages, awarded against the employer under Article 200 of the Labor Code, be reduced due to already received social insurance payments – for instance, disability pensions or temporary incapacity benefits from the National Social Security Institute (NSSI)?

It is precisely on this issue that the Supreme Court of Cassation (SCC) initiated an interpretative case in 2023. The purpose is to clarify whether the awarded non-pecuniary damages can be reduced in view of received social insurance payments, which have a different legal nature.

In a number of judicial acts, there is a trend where some courts reduce the awarded compensation, reasoning that the employee has already received financial benefits through the state social insurance system. This leads to inconsistent practice and raises questions regarding the principle of full compensation.

At the same time, other judicial panels maintain the opposite view — that compensation under Article 200 of the Labor Code and social insurance payments serve different purposes and have distinct legal natures. While social insurance benefits represent public assistance paid by the NSSI based on the insured person’s contributions, the compensation under Article 200 LC constitutes civil liability of the employer for the harm caused. These two categories cannot be equated or offset against one another.

In an international context, similar principles are also applied in the case law of the European Court of Human Rights, which holds that compensation for non-pecuniary damages serves both a compensatory and deterrent function and cannot be substituted by social payments.

Ultimately, the determination and possible reduction of compensation for non-pecuniary damages must adhere to the principle of fairness, without undermining the constitutionally guaranteed rights of employees to protection of life, health, and human dignity.

This article is for informational purposes only and does not constitute legal advice from attorney Mihail Tomov. In the case of a specific situation related to an occupational accident, an individual legal consultation should be conducted.