APPLYING COMMERCIAL LAW TO EMPLOYMENT RELATIONSHIPS

#33Applying Commercial Law to Employment relationships

Constitutional Court of the Slovak Republic in its finding Doc. No.: IV. ÚS 512/2020-110 stated that the complainant’s right to judicial protection under Art. 46 Par. 1 of the Act No. 460/1992 Coll. Constitution of the Slovak Republic as amended, as well as her right to fair trial under Art. 6 Par.1 European Convention on protection on Human rights, have been breached.

In the first instance proceedings, the plaintiff as a former employee argued that his employment relationship continues despite it was terminated under the provisions of Section 63 para. 1 lit. b) of the Act No. 311/2001 Coll. Employment Code as amended, since it was terminated invalidly by the employer (complainant). The aforementioned Section states that the employer may make an employee redundant by a written decision of the employer or his other competent authority about the organizational change. 

District Court considered the termination of the employment contract to be invalid and issued a decision that a resolution about the organizational change should have been passed by the majority of the executives as far it is a decision on the claimant’s business management.

In the appeal proceedings, the Regional Court changed the decision of the District Court by dismissing the appeal. In the review proceedings, the Supreme Court of the Slovak Republic upheld the judgement of the District Court and ruled that a decision on the organizational changes should have been a decision falling into the area of the business management of the company (claimant). The employer filed a constitutional complaint against this ruling.

The Constitutional Court of the Slovak Republic considered the complainant's allegations an unconstitutional application of the provisions of the Act No. 513/1991 Coll. Commercial Code as amended. The Constitutional Court stressed the following:

1. The Commercial Code and the Employment Code are not subsidiary to each other, neither are they linked by a general reference clause either. The term “decision on an organizational change” and “resolution related to the business management” are not the same. The failure to comply with the rules under the Commercial Code (consent of the majority of the shareholders) does not affect the validity of the termination of the employment contract.
2. The person who is authorized to act on behalf of the employer regarding the redundancies is entitled to handle a decision about the organizational change as well.