ÚS: Assessment of the limitation of compensation for damage caused by an employee

In the case at hand, the complainant, after taking up a senior position in her employment, made an organisational change in the structure of the organisation which was intended to lead to its streamlining and cost savings. On the basis of that change, she then gave several dismissals to employees, some of whom defended themselves against that action. As a result of the unsuccessful legal proceedings, the organisation incurred costs, part of which, amounting to CZK 357 275, it claimed from the complainant.

The courts of the lower instance pointed out primarily that the damaging events were the individual terminations and not the initial organisational change. Each situation was therefore assessed individually, as was the subsequent compensation for damages.

The Constitutional Court pointed out the deficiencies in the previous court proceedings, when on the one hand the statements were considered as separate damage events, but at the same time the complainant was found to be at fault in the incorrectly implemented organizational change, which was, from their point of view, purposeful and carelessly prepared.

According to the Constitutional Court, it is necessary to consistently prove how the misconduct and breach of duty actually occurred, thus distinguishing between two possible situations:

• The culpability may consist of individual statements that may have been hypothetically written or made in violation of the law. The previous organisational change is then no longer assessed and the individual cases can indeed be dealt with separately.
• If, on the other hand, the real substance of the misconduct was the organisational change which had taken place and the illegality of the statements was merely a consequence of that change, then the complainant’s misconduct must be regarded as a single act for which she should also bear a single consequence. In such a case, the limitation on damages laid down by the Labour Code as four and a half times the average wage would therefore apply to her.

However, the general courts erred in combining the two approaches, essentially finding one misconduct but linking several individual consequences and ‘penalties’ to it. As a result, the damages then exceeded the statutory limit.