Employment liability and what does it all mean?

You’ve caused your employer millions of dollars in damages and now you’re worried about where you’re going to get the money? You can rest easy. An employee is only limitedly liable for damages caused to the employer. To what extent and what are the limitations on that liability?

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7 minutes of reading

What about damage caused intentionally or after quenching thirst with a hoppy drink during working hours? Can the employer agree with the employee in advance to pay for the damage? And in which case is the employee liable for compensation?

TheLabour Code always refers to the employee and the employer in relation to liability. However, do not be confused by this, as an employee is also considered to be a natural person who concludes a work performance agreement with the employer. Therefore, compensation is not excluded in this case either.

As mentioned above, the employee is only liable for damage caused to the employer to a limited extent. It must always be damage caused culpably and in connection with the performance of work.

For example, if an employee inadvertently knocks over an important fibre-optic cable on a construction site, his employer must pay the victim the full amount of the damage and, if applicable, the loss of earnings. However, the employee can only recover a maximum of 4.5 times his average monthly wage, no matter how high the damage is.

If the employer also caused the damage, the employee shall only pay a proportionate part of the damage according to the degree of his fault. If more than one employee is liable for the damage, each of them shall bear a proportionate part of the damage according to the degree of his or her fault.

Further exceptions are provided for in agreements governing so-called material liability or liability for entrusted objects. These are discussed below.

But how is the amount of damages that the employer can claim calculated? Damage in the Labour Code regime is the actual diminution of the property of the employer to whom the damage has been caused.

Thus, for example, it is possible for an employer to claim from an employee the cost of repairing damaged machinery or equipment, but only if such costs would not have been incurred by the employer – but for the harmful event. For example, if a maintenance worker regularly comes to repair the machine in question, then the employer cannot claim the cost of that maintenance worker from the employee.

Tip: In its ruling, the Constitutional Court addressed the relationship between damage and the obligation to pay damages by the employee. It addressed the situation whether a botched organisational change at the workplace and several invalid terminations submitted on the basis of that change should be treated as one or several errors. This has an impact on the application of the limit on damages.

However, it is not always that simple and there are some exceptions. For example, the four and a half times limitation does not apply if the damage was caused intentionally, while drunk, or after the use of other addictive substances (e.g. marijuana). However, the employer must prove this. This can be done, for example, by calling witnesses from the “wet district” when the employee admits to his colleagues in the evening after his shift that he cut the cable on purpose in order to “embarrass” the employer. In that case, the employee is then liable for the full amount of the damage.

On the other hand, the employee is not liable for the damage he causes in the course of averting damage to the employer or a danger to life or limb which is imminent, if he did not intentionally create the condition and acted in a manner reasonable in the circumstances. However, increased caution is also recommended here. The employee has a duty to protect the employer’s property. Thus, if, for example, an employee rushing home saw strange smoke above the lumber store and did nothing, did not report it, but only mentioned it in the pub in the evening, the employer could indirectly blame him for the damage caused by the fire (here he is liable up to three and a half times his average monthly earnings).

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Damage caused by employees

Theemployer is alsoliable for any damage that may be caused to an employee in the course of his or her work or by some other intentional act. Similarly, it is liable for damage caused to an employee by other employees acting on behalf of the employer in breach of legal obligations. An exception is damage to a means of transport used by the employee in the performance of his/her duties without the employer’s consent. The same shall apply to tools, equipment and articles of the employee necessary for the performance of the work used without the consent of the employer.

However, the employer shall also be liable to the employee for damage to items normally brought to work and left by the employee in the performance of his/her work tasks. However, the employee must exercise the right to compensation no later than 15 days from the date on which he became aware of the damage.

Tip: Are you an employee and liable for damages? Take out an employee liability insurance policy, or crap insurance. Find out how it works in our article.

An interesting case was settled by the court some time ago, involving the theft of a car from an employee who used it as usual to get to work and parked it on the employer’s premises. She put the car keys along with other personal belongings in the assigned locker in the locker room used for changing clothes. It was ransacked. The court held that, for purposes of employer liability for damages caused by the removed items, a personal automobile cannot be considered an item customarily brought to work. An employee is only liable for a personal car that she places on the employer’s premises in an unattended parking lot up to the amount of £10,000, unless the damage to the car was caused by another employee.

Tip: Road accidents are one of the most common situations in which we deal with compensation, whether as the injured party or as the person who caused the damage. What are the relationships between the parties involved and how does the insurance company get involved? What can you claim and how to proceed in such situations?

The employer is obliged to reimburse the employee for the actual damage. In the case of abandoned items, if the employee brings to work items that he does not normally wear and the employer does not take them into special custody, the employer shall be liable for damages up to CZK 10,000. That was the case with the car in question. If it is established that the damage to the item was caused by another employee or that the item was damaged in the employer’s special custody, the employer is also liable to pay the employee the full amount of the damage. However, it is not enough to have a doorman at the entrance to the premises or cameras at the workplace. That does not count as special custody.

However, if the employee does not report the damage to the employer without undue delay within 15 days of the date on which he became aware of the damage, this right to compensation is extinguished.

Tip: Have you had an accident at work? What are you entitled to, what is pain and suffering and how is it determined? Is the procedure different if you caused the injury in part by your own breach of duty? And why is your employer allowed to give you notice in connection with an accident at work? We answer all this in our article.

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Author of the article

JUDr. Ondřej Preuss, Ph.D.

Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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