Inaccuracy of the Labor Law Confuses Constitutional Court Judges

One interesting ruling of the Constitutional Court concerns all employers. The question was whether a former employee of the Customs Administration should return already paid salaries to the employer because he lost in court claiming he was discriminated against at work, which is why he stopped working. He took the opportunity because the Labor Law (2003) granted the right to a worker who has been sexually or otherwise harassed to cease work until protection is ensured.

He sued the state and during that time his salary must not be suspended, in the amount he would have earned if he had worked. Simply put, he does not work, yet receives a salary until the court determines whether he was indeed discriminated against. The only condition for exercising that right to cease work is the obligation to request protection before the competent court within eight days from the date of delivery of the complaint to the employer, which in this specific case the employee of the Customs Administration did when he filed a lawsuit against the state on May 8, 2009.

Seven Years of ‘Urgent’ Proceedings

By a final judgment (December 5, 2016) of the County Court in Rijeka, the employee’s lawsuit claiming discrimination in the workplace was entirely dismissed. Since the employee’s claim in the discrimination dispute was definitively rejected, the plaintiff, the Republic of Croatia, sought the return of the salary in gross amount paid to the applicant during the period of interrupted work, i.e., from May 11, 2009, to December 26, 2016, when he was not working awaiting the outcome of the discrimination lawsuit.

The employee, however, believed he should not return anything, but unfortunately for him, the County Court decided otherwise. Therefore, the employee turned to the Constitutional Court, which annulled the judgment of the County Court in Rijeka according to which the worker must return the salaries, but it was not unanimous in that decision.

Namely, the 2003 Law did not explicitly stipulate that an employee must return salaries if he loses in court. Only 11 years later, legal amendments granted the right (possibility) for employers to demand the return of paid compensation if it is subsequently determined by a final court decision that the dignity of the worker was not violated, which was the case here.

However, the Constitutional Court reminds that the worker ceased to work (by filing a lawsuit against the state) at a time when the Labor Law from 2003 was in force, which did not prescribe anything regarding the obligation to return received salary in case the worker loses the initiated anti-discrimination procedure. Since the labor dispute due to discrimination is inherently urgent, that court procedure should have been resolved long before December 5, 2016.

Thus, despite its urgent nature, the dispute lasted seven years and seven months even though it is prescribed to be resolved within six months from the filing of the lawsuit, or within thirty days from the receipt of the appeal.

As a result, the worker was continuously paid a gross salary, totaling around 107 thousand euros. According to the position of the Constitutional Court, the interruption of the applicant’s work would have lasted shorter and he would certainly have been obliged to return a smaller amount had that procedure been completed within the legal timeframe or at least a reasonable timeframe of a total of two years, taking into account the circumstances of the specific case, but also the burden on the courts. Therefore, the procedure was returned for decision-making to the County Court to fairly determine whether and how much the employee should return from the received salaries.

However, there is no legal gap

However, I want to say that the old Labor Law was unjust because it did not explicitly mandate the return of money, although the authors of that law should have anticipated the intentions of fraudsters. But despite this legal ambiguity, Judge Miroslav Šumanović, who disagreed with the majority ruling of the Constitutional Court judges, believes that the constitutional complaint should have been dismissed and that the employee should return the money.

Namely, although the Labor Law from 2003 does not explicitly mention the return of money, it emphasizes that it states that for matters not regulated by this or that law, general provisions of mandatory law apply. And the obligation to return what was received in this specific case, Šumanović emphasized, is based on the institute of unjust enrichment.

Although I believe that when making a new ruling, the County Court should take into account the fact that the court process lasted too long, regardless of whether the majority was right or not, Judge Šumanović’s position can help employers in similar situations to seek the return of money based on obligatory law.

POST SCRIPTUM

It will be interesting to see what ruling the County Court in Rijeka will make. However, it is important to mention that this court, when making the previous ruling (which the Constitutional Court annulled by majority decision), referred to Articles 1111 and 1115 of the Law on Obligations. The ruling states that the former employee of the Customs Administration, after losing the court case, is obliged to return the paid salaries acquired without basis, just as Judge Šumanović of the Constitutional Court mentioned.