When is Employee Actually Liable to his/her Employer for Damage?


The general legal regulation concerning damage liability within employment relationships is included in the Act No. 262/2006 Coll., Labour Code, as amended (hereinafter referred to as the “Labour Code”). 

Employment relationships are so governed by their own special legal regulation concerning damage liability whereas a foundation stone of this regulation is the provision of Section 250. This provision says that “An employee is liable to his/her employer for damage caused to the employer by culpable breach of obligations while fulfilling job tasks or in direct connection therewith.” Hypothesis formulated in this manner contains many terms which would, for sure, deserve more detailed interpretation in the future. Nevertheless, it is not provided by the law therefore the interpretation of such terms is a matter of doctrine.  

Basic analysis of Section 250, Labour Code     

If we apply the above-mentioned provision, we will find out the existence of the following aspects is necessary for the origin of the employee´s damage liability:

I. Breach of job duties while fulfilling job tasks or in  direct connection therewith

II. Occurrence of damage

III. Causal connection between breach of job duties and occurrence of damage 

IV. Employee´s culpability

To give rise to the employee´s damage liability, all these specified characteristics must be met simultaneously. In case of litigation the burden of statement as well as the burden of proof lies just in the employer as a plaintiff to prove the existence of all the above-mentioned presumptions. 

Ad I. Breach of job duties means in particular breach of the employer´s internal regulations, Employment Contract, or instructions of managers. Nevertheless, this provision is interpreted in a very broad sense whereas the employee´s liability is established also by any breach of applicable legislation [1]. Job duties are breached also within the so-called excess when the employee meets his/her job duties though not properly. It means that even the employee using a company car without the employer´s permission will be liable for damage, pursuant to Section 250 et seq. of the Labour Code. [2]

However, just a breach of the employee´s legal obligation itself does not establish damage liability in accordance with the employment regulations. From the viewpoint of applying employment liability, it must be necessarily a breach upon fulfilling of job tasks or in connection therewith. When assessing whether the employee caused damage while fulfilling job tasks or in connection therewith, judicial practice is based especially on objectifying criteria. Thus, it is essential whether a particular case concerns an activity being performed for the employer from the material, territorial as well as time point of view. [3] Nevertheless, the employee´s motives or grounds are not decisive in themselves.[4] 

Ad II. Though the term of damage is not anyhow defined in the Labour Code, judicial practice understands damage as a loss which shows itself just in the property sphere of an aggrieved party and may be objectively expressed (e.g. in money). The basis of such conception of damage is the fact damage as a certain negative consequence of the infringer´s acting is always repairable by providing a certain settlement – pecuniary settlement or restitution in kind. 

Within the employment damage liability damage shows itself in various ways, most commonly, it is just reduction of the employer´s property due to the fact the employer has to remedy what the employee caused. If the employee crashes a company car and an insurance company enforces the subsequently paid indemnification from the employer, such indemnification payment to the insurance company is understood as damage caused by the employee to the employer. A similar process is applied also in cases when the employee causes a claim by himself/herself but the employer will be liable for such damage [5].

Ad. III. A causal connection or causal nexus is another obligatory presumption of the employee´s damage liability. Even though the employee breached his/her job duties and damage occurred, if a causal connection was absent between such damage and the employee´s acting, it is not possible to penalize the employee for such damage.

The investigation whether a causal connection is given in a specific case or not is rather a matter of fact than a legal question and it is always necessary to investigate this problem in specific connections. Thus, it is not any difficult legal analysis. It is rather a completely pragmatic consideration whether the employee´s specific acting or omission was a relevant cause of the found damage caused to the employer. It is necessary to point out that damage is not just a summary of losses caused to the employer by the employee´s activity but it is a property loss which is a consequence of specific breach of job duties and is in causal connection with such breach of job duties. In case of objective cumulation of more claims it is necessary to investigate fulfilment of presumptions of the employee´s damage liability separately in each loss case.[6][7]

Ad IV. The last but not less important aspect of the employee´s damage liability is culpability itself. The employer is obliged to prove the employee´s culpability whereas it is sufficient for the origin of damage liability to prove culpability by negligence.[8] As regards the definition of the term “culpability” and its individual components, the established practice is based on the criminal law doctrine.[9] As culpability is a phenomenon which is strongly subjective, it is possible to investigate the culpability externally only with quite limitations. Thus, we rather presume a viewpoint of circumstances of a specific case. If the employer advised the employee e.g. of a specific imminent danger in the past, it is possible to presume based on the previous fact that the employee will act in such case at least with negligence. Otherwise, if the employee boasts to his/her colleagues that he/she has been stealing the sales for several years, it can be quite easily assumed as wilful culpability.   


Finally, we may say that not each damage caused by the employee to the employer is subject to a legal mode of damage liability in compliance with the Labour Code. To be possible for the employer to require compensation, damage must be really caused, damage must be caused by culpable illegal acting of the employee while fulfilling job tasks or in connection therewith, and there must be a causal connection between the employee´s acting and damage incurred. Thus, we may say that the Labour Code protects the employee as a weaker party to a certain extent whereas all the criteria for the origin of damage liability must be always met simultaneously. Even in such cases a legislator limits the scope of compensation in certain situations. 


[1] It concerns mainly legal regulations the employees are obliged to observe. First of all, it means legal regulations declared in the Collection of Laws by publishing their full wording (constitutional laws, acts, Senate´s legal measures, government decree, legal regulations issued by ministries and other central administrative authorities, eventually also legal regulations of other administrative authorities and legal persons if they issue legal regulations based on a special act with national force). 

[2] Bělina, M., Drápal, L. a kol.: Zákoník práce. Komentář. 2nd edition. Praha: C. H. Beck, 2015, p. 1023.
[3] However, the employee´s liability is not time-limited by the defined working hours or by the existence of employment. It means that even an employee who e.g. steals goods from the employer´s warehouse in the employee´s own free time is liable to compensation of such damage in compliance with the regulations of the labour law. The same applies to an employee who caused damage found out by the employer even after termination of employment. 

[4] Compare: Supreme Court judgement as of 14 January 2003, file No. 21 Cdo 454/2002.
[5] Compare: Section 2914 of the Act No. 89/2012 Coll., Civil Code.
[6] Compare: Supreme Court judgement as of 13 August 2002, file No. 21 Cdo 1111/2001.
[7] Bělina, M., Drápal, L. a kol.: Zákoník práce. Komentář. 2nd edition. Praha: C. H. Beck, 2015, p. 1026.
[8] A difference between wilful/negligent culpability shows itself mainly when determining the scope of damage whereas the employer can require the damage caused by negligence only within the limit stipulated by law and such limit depends on the employer´s amount of average monthly income. (see Section 257 of the Labour Code).
[9] NS 21 Cdo 1059/2003 (C 2361): Culpability can be characterized as a mental relationship of an acting person towards his/her acting which is illegal and towards damage as a consequence of such acting. We speak about culpability in the form of intention (wilful misconduct) if the acting person knew he/she may cause damage and he/she wanted to cause damage (direct intention), or if the acting person knew he/she may cause damage and in case the damage is caused he/she was acquainted therewith (indirect intention). We speak about culpability in the form of negligence (negligent culpability) if the acting person knew he/she may cause damage but without reasonable grounds he/she relied on the fact he/she will not cause it (active negligence), or if the acting person did not know he/she may cause damage though he/she was supposed to know or might have known about that with respect to the circumstances and his/her personal relations (simple negligence).

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JUDr. Jakub Dohnal, Ph.D.

JUDr. Jakub Dohnal, Ph.D
advokát, partner

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