Limited and full financial liability of employees

According to the case law of the Supreme Court of Cassation, in particular Decision No. 124 of 23 May 2014 in civil case No. 5460/2013, Third Civil Division, Civil College, employees are financially liable to their employer for loss caused by negligence in the course of or in connection with their duties. Article 206 of the Labour Code limits liability to one month’s pay, or three months’ pay for managers. Stricter rules apply to employees entrusted with money or other assets for which they must account. Their limited liability may reach three months’ pay under Article 207(1), point 1; for a shortage they are liable in full under Article 207(1), point 2. Limited liability is enforced under Article 210, while full liability may be enforced only through the courts (Article 211). For a shortage, liability always extends to the full amount of the loss. Neither the cap on an employee’s liability nor the procedure for limited liability applies.

The Supreme Court of Cassation also holds that, under Article 207(1), point 2, full liability to the employer for a shortage rests with an employee whose position or assigned duties require them to collect, keep, disburse or account for money or tangible assets. The employer bears the burden of proving that the defendant was entrusted with such responsibility. A shortage is a form of loss characteristic of these duties. It consists of an unexplained deficit in the till, in the case of money, or in a warehouse, workshop or similar location, in the case of goods: the cause is unknown. Once such a deficit is established, it is presumed to have been caused by the accountable employee. This presumption rests both on the employee’s specific duty to safeguard and account for the assets entrusted to them and on the unexplained origin of the shortage.

To avoid liability for an established shortage, the employee must therefore prove that they did not cause the loss or that it occurred without fault on their part. The burden of proof is reversed. In a claim under Article 207(1), point 2, the employer as claimant must prove that a shortage exists; the accountable employee must rebut the presumption that they caused it or were at fault. Establishing a shortage requires proof, first, of a deficit in money or tangible assets and, second, that the deficit arose while the employee was carrying out the relevant duties. Safeguarding and accounting for the assets is a specific duty forming part of that employee’s employment relationship.

This article is not a legal opinion or legal advice from a lawyer at Tomovi Law Firm. For assistance with a particular case, consult a lawyer practising in employment law.