Law
Legal News [June 2023]: Supreme Court addresses the issue of the non-existence of a legal transaction
Is it possible to give two successive notices or to terminate the employment relationship twice? The Supreme Court has ruled that the answer is yes, and that giving a second notice due to uncertainty about the validity of the first notice does not exclude the employer's seriously manifested will. Read more about this decision and other interesting case law in the latest Legal News.
- The Supreme Court, in Resolution No. 21 Cdo 1410/2022, addressed the employee’s claims in the event of a conflict between an invalid termination of employment and the loss of medical capacity due to an occupational injury. The Supreme Court dealt with a situation in which the employer did not provide the employee with any work following the employer’s unilateral termination of the employment relationship, after the employee had informed the employer of his insistence on continued employment due to loss of working capacity as a result of a work-related injury. The Court reasoned that in such a case it was also necessary to consider whether the employee was entitled to claim compensation for loss of earnings after the end of the incapacity for work on a legal basis other than the invalid termination of the employment relationship.
- In its ruling no. 21 Cdo 2615/2022, the Supreme Court addressed, among other things, the question of when a legal act is deemed to be non-existent due to lack of seriousness of will. With reference to established case law, it stated that if an employer repeatedly terminates an employment contract with an employee during the probationary period, e.g. because it (wrongly) assumes that the employee’s refusal to accept an earlier notice of termination did not have the effect of its delivery, this does not mean that the employer did not seriously intend to terminate the employment contract and that it only expressed its serious intention to terminate the employment contract during the probationary period in a subsequent (repeated) legal transaction. If the employee or the employer then wishes to avoid the legal effects of the legal act of termination of the employment relationship, they must file an action for the declaration of the nullity of the legal act within a maximum of two months from the date on which the employment relationship should have ended by such termination. If this is not the case, the employment relationship between the parties is terminated in accordance with the legal transaction, even if the termination of the employment relationship is invalid.
- From the older decisions, we bring you a summary of the judgment of the Supreme Court (No. 28 Cdo 2989/2022). In this judgment, the Supreme Court dealt with the conditions for the right to request the renegotiation of a contract or the modification of a contractual obligation by a court decision (Articles 1765(1) and 1766(1) of the Civil Code). Such a condition is, inter alia, that the imbalance in the rights and obligations of the parties to the contract was caused by a substantial change in circumstances, unforeseeable and uncontrollable by the parties, and caused by external factors (i.e. factors beyond the control of the parties). Examples given by the Court include the effects of natural forces, the effects of illness, injury or death, technical failure or damage caused by a third party, or a change in legislation, social or political circumstances or general economic and business conditions (significant increase in the rate of inflation, disruption of supplier-customer relations, etc.). In the light of the above, the Supreme Court has ruled that the preparation of an expert’s report, which determines the value of the rights and obligations to be settled under the contract (as a result of new information) in a different manner from the information available to the parties at the time of the conclusion of the contract, does not in itself constitute a material change in circumstances caused by external factors.
- The question of whether the right to the payment of the promissory note was exercised in a manner that did not qualify for legal protection under Section 8 of the Civil Code, i.e. whether there was a manifest violation of the law, was dealt with by the Supreme Court in its decision no. 29 Cdo 3639/2022. It held that if the plaintiff, who was not restricted in his choice (contractually or otherwise), decided (after the company had defaulted on the loan) to use only a blank promissory note (and not also a bank guarantee, which subsequently expired) for the (substitute) satisfaction of the claim against the company, this circumstance cannot (without further consideration) be assessed as a violation of the law, let alone as a manifest violation of the law. A contrary conclusion would lead to the unacceptable result that a creditor (prudent and mindful of his rights) who has secured his claim against the debtor in several ways would be in the same position (if not worse) than a creditor who has settled for (only) one “security”.
- The question of whether the requirement of written form in the provision of Section 444 of the Commercial Code, which regulates the possibility of a deviating arrangement of the moment of acquisition of the ownership right by the acquirer, also applies to the specification of the object of purchase in terms of its distinguishability from other goods, was dealt with by the Supreme Court in its earlier ruling No. 23 Cdo 3114/2021, in which it stated that the wording of the provision links the requirement of written form only to the deviating arrangement of the moment of acquisition of the ownership right by the acquirer. The Supreme Court stated that the very wording of the provision links the requirement of written form only to a different arrangement of the moment of acquisition of the title by the acquirer, and not also to a sufficient identification of the transferred goods at the moment of transfer of title. Therefore, if in the case in question the moment of transfer was linked to the moment of placing the goods (goods, materials) at the customer’s construction site and such an agreement was concluded in writing, the requirements of Section 444 of the Commercial Code were met.
- In its decision no. 21 Cdo 3503/2022, the Supreme Court dealt with a situation in which the plaintiff, in a declaratory action filed pursuant to Section 80 of the Code of Civil Procedure, sought a declaration that on 1 May 2005 an employment contract had been concluded in a ‘legally valid’ manner between the defendant as the plaintiff’s employer and the plaintiff as the defendant’s employee. As there is no time limit for filing this action, the Supreme Court held that the plaintiff could have filed the action at any time, provided that he had an urgent legal interest in the declaration sought. Therefore, the Supreme Court held that the Court of Appeal’s conclusion that the plaintiff’s exercise of the right to a declaration of the “existence of an employment relationship” was an exercise of a right contrary to good morals (only) because the plaintiff exercised it 14 years after the employment relationship was established was incorrect.
