What about pre-contractual liability in employment law?

The New Civil Code (“NCL”) introduced a new element into Czech law – pre-contractual liability. Most experts agree that it should also be applied in employment relations.

2 minutes of reading

The dishonest employee or employer should thus be obliged to compensate his or her injured counterpart. How was this the case for Ms. Karolína?

The law says that anyone is free to negotiate a contract and is not liable for failing to enter into it, unless he or she initiates or continues to negotiate the contract without intending to enter into it. Ms. Karolína contacted us with just such a suspicion. Her new employer had probably been leading her around all along. She lost her old job, where she had resigned, and did not get her dream new position.

However, the aim of the pre-contractual liability legislation is precisely to prevent situations where the contract negotiation is a mere cover-up, e.g. to confuse or delay the other party in some way, usually for their own benefit. However, liability will also apply where such a practice is motivated by malice alone, without self-enrichment.

Damages must also be paid by the party who, without just cause, terminates contract negotiations when a contract is already highly probable. In the case of Ms Karolína, this happened when she suddenly received a text message just before an appointment that the contract was cancelled. The contract had been agreed in advance, including the specific terms and conditions.

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This does not necessarily mean that the parties have already fully agreed on the conclusion of an absolutely specific contract, but also a situation where the essential elements of the contract have already been agreed and both parties declare their willingness to conclude the contract (e.g. they announce in an email that the contract will be ready for signing on Monday morning, as in our case). However, where the line is drawn where the conclusion of the contract appears “highly probable” may of course also be contradictory in a particular case.

But what can Ms Caroline claim? The law limits a claim for pre-contractual liability damages. The party who acts dishonestly will compensate the other party for damages, but at most to the extent that the loss from the failure to conclude the contract corresponds to the loss in similar cases.

The real damage suffered by the employee is the loss of the original job, which can be quantified as e.g. 3 x the original salary. However, the employee will only be able to claim the maximum he would have received by not concluding a new contract. Here, it will probably not be possible to rely on some “indefinite duration”. In any claim, therefore, we suggest basing this on specific dates. E.g. for six months, as the average length of similar employment.

Ms. Karolína’s new employer eventually paid compensation out of court after our intervention and she already has a job elsewhere. We recommend not to give up in similar cases and to contact a specialist.

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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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