How does the Labour Code regulate the material liability of an employee? What are the types of liability? When can an employer pursue a claim for damages? To get answers to these and other questions, read the following article.
In the Labour Code, the legislator has provided for two types of employee liability for damage caused to an employer while performing employee duties:
The employee’s material liability under the general rules arises upon entering into the employment relationship, so there is no need for an additional agreement with an employee.
The employee’s general material liability includes:
An employee is materially liable for damage caused to an employer if the damage was caused intentionally, i.e. caused by the culpable non-performance or improper performance of duties, but it is the employer’s responsibility to prove the damage and the employee’s fault.
In the case of intentionally caused damage, an employee is obliged to compensate for the full amount of the damage, taking into account the employer’s lost profits related, for example, to the downtime of the broken machine.
If, on the other hand, the damage is caused by an employee’s negligent non-performance or improper performance of his or her duties, the employee’s liability shall be limited and shall not exceed the amount of three months’ salary to which the employee was entitled at the date of the damage.
The employee’s three-month remuneration in such a situation shall be calculated according to the rules applicable to the determination of the cash equivalent for leave and without taking into account changes in the terms and conditions of remuneration or the level of remuneration components introduced after the date of the damage.
Entrustment means the handing over of property (e.g. equipment) to an employee on the basis of receipt of the item by means of a physical inventory or a handing-over inventory.
An employee may be entrusted not only with things, i.e. for example tools, objects, including personal protective equipment, work clothing and footwear, but also with money, securities or valuables.
Liability for entrusted property is divided into:
When damage is caused to entrusted property, an employee is liable for the full amount regardless of whether the damage was caused intentionally or unintentionally.
However, there are also cases in which an employee may be relieved of this liability. Such cases include circumstances beyond the employee’s control such as, for example:
Thus, in the case of theft of property by a third party, if there are independent circumstances, the employee entrusted with the property may discharge liability for the property in question.
An employer may also entrust the custody of property to several employees. We then speak of a joint entrustment agreement. It can be concluded if the number of employees at the place of entrustment does not exceed:
However, it should be borne in mind that any change in the number of employees covered by joint material liability will require a new agreement.
Moreover, the employees with joint material liability shall be liable in the parts specified in the agreement. However, if it is found that the damage was caused in whole or in part by some employees, only the employees – the persons causing the damage – shall be liable for the damage in whole or in part for which they are responsible.
What is important is that the joint liability agreement for entrusted property ceases to apply when the employment relationship ends.
Employee material liability – information table
Type of liability | Who bears the burden of proof? | Up to what amount is the employee liable? | Is an additional agreement required? |
General liability – intentional fault Intentional fault – the employee violates his/her duties, or wants to cause damage to the employer’s property, or foresees the possibility of causing damage and accepts it | The employer bears the burden of proving both the damage and the fault of an employee | Up to the full amount of the damage including the employer’s lost profits | No, it arises when the employment relationship is established |
General liability – unintentional fault Unintentional fault – unintentional failure to perform or improper performance of duties | The employer bears the burden of proving both the damage and the fault of an employee If an employee, acting unintentionally, has caused several damages, each of these damages must be proven separately. | Up to the amount of three months’ remuneration to which the employee was entitled at the date of the damage. Three months’ remuneration – shall be calculated in accordance with the rules applicable to the the calculation of the cash equivalent for leave, without taking into account changes to the terms and conditions of remuneration or the amount of remuneration components introduced after the date of the damage. | No, it arises when the employment relationship is established |
Liability for entrusted property The proper entrustment of property consists of its handing over. | There shall be a presumption of fault on the part of the employee | Up to the full amount of the damage including the employer’s lost profits An employee shall be liable for damage to entrusted property in full, no matter whether the damage was caused intentionally or unintentionally. | Yes, the employee’s consent to the entrustment of property contained in the employment contract or in a separate agreement on acceptance of entrusted property |
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