How to bring an employee to liability through the court

Successful work of the enterprise directly depends on the actions of its management. Of course, these actions should be aimed at creating the appropriate work conditions for their employees. 

But what to do if employees do not care about the property entrusted to them, damage the material assets? Let’s elaborate on this issue.

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What is the employee’s liability for damage?

The employee’s liability is stipulated by the labour legislation of Ukraine. As a matter of fact, it is liability for damage caused to the property of the enterprise both accidentally and deliberately. 

Such damage shall be compensated, but the amount of compensation shall not exceed the employee’s average monthly salary. 

What is the damage compensation procedure? 

In order to get compensation for damages, the company has the right to deduct a certain amount from the employee’s salary. However, this may only be done on the basis of an order issued by the company to hold the employee liable. Such an order must be issued no later than two weeks after the discovery of the damage. 

Based on our practice, more and more enterprises are faced with such a situation, when an employee recklessly installs a malicious program on the office computer, which leads to the loss of the company’s accounting program base. In this case, the employee is liable for damage in the amount of direct actual damage, which, however, shall not exceed his/her average monthly earnings. 

Calculation example: Let’s assume that restoring this base will cost the enterprise UAH 10,000, while an average monthly salary of an employee is UAH 7,000. Thus, UAH 7,000 will be deducted from the employee’s salary, while the rest amount of damage of UAH 3,000, which exceeds the employee’s salary, will not be reimbursed.

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What to do if the damage was caused for a large amount which can’t be covered by the employee’s average monthly salary?

Taking into account the market value of the company’s assets (equipment, tools, computer equipment, motor vehicles) used by an employee for production purposes, the average monthly salary of an employee may not always cover the damage caused. 

For example, the price of a chain link machine can be dozens of times higher than the income of the top employee. For such cases, the legislation of Ukraine provides for full employee’s liability for damage, i.e. the employee shall compensate for the damage caused in full. You can pursue full cost recovery for damages only in cases directly stipulated by law, namely Article 134 of the Labor Code of Ukraine. 

For example, you can claim for full compensation in the following cases:

• The employee causes damage when off-duty;
• The employee causes damage while drunk;
• The employee signs written agreement on full liability beforehand. 

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Compensation for damages caused to the company’s property by the employee in a court case

In all other cases, if the amount of damage exceeds the average monthly salary, and the employee cannot be held liable in full within the scope of Article 134 of the Labor Code of Ukraine, the company’s management should apply to court. 

We recommend to go to court in the following cases:

- The amount of damage significantly exceeds the employee’s average salary. We were contacted by a company engaged in the recycling of raw materials. An employee of this company, while working at a copper cable (wire) processing machine, processed an inappropriate type of cable with steel inclusions, which led to the failure of this machine (this damaged the grinding part). 

Of course, the employee’s average monthly salary could not cover the cost of repairing an expensive machine. However, no full liability agreement was concluded with the employee beforehand. In that case, we recommended to go to court by first conducting an independent examination of the machine in order to establish the fact that the machine was not operating properly.

- If you missed the deadline for issuing an order to hold a guilty employee liable or if the damage caused was discovered after the employee was fired. There is a time limit of one year from the date of damage detection set for filing a claim with the court on these issues. Please note, if this period is missed without a valid reason, your claim will be denied.

Please note! The obligation to prove the employee’s guilt in court is attached to the employer. On the basis of court practice, accounting data, properly documented inventory materials, materials of official inspections and even written explanations of the employee, will serve as proper evidence of the amount of damage caused, the reasons for its occurrence and the degree of the employee’s guilt.

The main thing is to correctly draw up the claim, correctly drawing up all evidence.

If you want to get compensation for damage caused to the property of your company, don’t hesitate to call us! We can help you understand the situation and allow for all possibilities.