The norm on the reversal of execution of judgement in cases regarding recovery of remuneration for work is incompatible with the Satversme
On 16 April 2015 the Constitutional Court has passed a judgement in case No. 2014-13-01 “On Compliance of Section 635(6) of the Civil Procedure Law, insofar it Applies to the Reversal of Execution of a Judgement in Matters regarding Recovery of Remuneration for Work, with the first and third sentence of Article 92 of the Satversme of the Republic of Latvia”.
An employer’s right to recover financial resources that had been collected without legal grounds has been restricted to the extent that allows considering that the employer has been deprived of this right substantially
The Contested Norm
Section 635 (6) of the Civil Procedure Law: “Reversal of execution of a Judgement shall be allowed in matters regarding [….] recovery of remuneration for work […] if the judgement set aside was based on false information furnished by or forged documents submitted by the plaintiff.”
The Norm of Higher Legal Force
The first and the third sentence of Article 92 of the Satversme: “Everyone has the right to defend his or her rights and lawful interests in a fair court. [..] Everyone, where his or her rights are violated without basis, has a right to commensurate compensation.”
The Facts
The case combines two cases, initiated on the basis of constitutional complaints submitted by limited liability company “RMB One” and limited liability company “DNB līzings”. Both companies had disputes with employees regarding recognising the termination of a labour contract as invalid and recovering remuneration for the forced absence from work. The appellate instance courts set aside these judgements.
The Civil Procedure Law, inter alia, envisages regulation for situations, where a judgement in a case that has been enforced is later set aside, i.e., the defendant has the right to recover everything that had been collected unfoundedly (reversal of execution of judgement). However, in accordance with the contested norm, where the dispute concerns the recovery of remuneration for work the employer can recover from the employee the monetary resources that have been paid without basis only if the employee had given to the court false information or submitted forged documents. Due to this, the appellate instance courts have rejected the applicants’ requests regarding reversal of the execution of judgement.
The submitters of constitutional complaints hold that this regulation places unsubstantiated restrictions upon the right to a fair court, since the defendant cannot achieve enforcement of a fair judgement, favourable to it, but the plaintiff, whose claim has been rejected, can unfoundedly enrich himself or herself at the expense of the defendant.
The Court Findings and Ruling
On the content of the fair court concept
The Constitutional Court noted that the State’s obligation to ensure enforcement of court rulings follows, inter alia, from the first sentence in Article 92 of the Satversme, i.e., in the absence of guarantees for effective enforcement of a court judgement other principles of fair legal proceedings become meaningless. [11]
The Constitutional Court first of all examined the compatibility of the contested norm with the first sentence in Article 92 of the Satversme [12] The Court recognised that the contested norm restricted the right to effective enforcement of a court judgement [13.3].
On the constitutionality of the restriction to the fundamental rights
To establish, whether a restriction to fundamental rights can be justified, the Constitutional Court examined, whether:
- the restriction was established by law,
- the restriction has a legitimate aim,
- the restriction is proportional, i.e., whether the measures used by the legislator are suitable for reaching the legitimate aim, whether the aim cannot be reached by using other measures, less restrictive upon the rights and legal interests of a person, and, finally, whether the benefit gained by society exceeds the damage caused to a person’s rights and legal interests. [14, 17]
The case under review contained no dispute regarding whether the restriction to fundamental rights had been established by law. [15] The Constitutional Court pointed to the legitimate aim of the restriction – protection of employees’ rights. In legal labour relations an employee is considered to be the socially most vulnerably party, needing special legal protection. [16]
In assessing the proportionality of the restriction, the Constitutional Court recognised that the measures applied by the legislator were appropriate for reaching the legitimate aim, i.e., the contested norm protects an employee’s rights, [18] and it is not possible to reach this aim by other measures, less restrictive upon a person’s rights and legal interests [19.2].
However, the Constitutional Court concluded that the benefit that society gains from the protection of employees’ rights is smaller that the damage inflicted upon a person’s – employer’s – rights and legal interests. [20.4]
The legislator in the legal acts that regulate legal proceedings in cases of labour disputes has envisaged a number of various supplementary rights to the employee as a person who needs special legal protection. [20.1, 20.2] In contrast to these special procedural guarantees granted to an employee, an employer’s right to reversal in execution of judgement depends only on such circumstances, which an employer cannot influence, i.e., depending on whether an employee has provided to court false information or submitted forged documents. An employer’s right to recover monetary resources that have been collected without legal grounds has been restricted to the extent that it can be considered that an employer has been deprived of this right substantially. The contested norm does not establish a balance between, on the one hand, the right to effective enforcement of judgement that follows from the concept of a fair court and, on the other hand, the protection of an employee’s right to receive the necessary means of subsistence. [20.4]
Therefore the Constitutional Court recognised the contested norm as being incompatible with the first sentence in Article 92 of the Satversme.
On becoming invalid
The Constitutional Court recognised that in the concrete situation the legislator should be given time to asses, taking into account the system of regulatory enactments, the best way for balancing the rights of an employer and an employee. Therefore the Constitutional Court provides that the contested norm shall become invalid as of 1 November 2015. Whereas with regard to the submitter of the constitutional complaint, the norm becomes invalid as of the moment when the infringement of the submitters’ rights occurred.
The Judgement is final and not subject to appeal, it comes into force as of the day of its pronouncement.
Linked case: 2014-13-01