An employee who did not follow a prescribed work procedure damaged one of the employer’s machines. The employer had the machine repaired by its other employees specifically assigned to machine repairs and maintenance within the business. Subsequently, the employer claimed compensation for damage from the employee in the form of the costs of the repair, including the salary of the employees who repaired the machine.

Czech labour law limits damages that may be claimed from employees to 4.5 times their average monthly earnings unless the damage is caused intentionally or while the employee is intoxicated. The damages claimed for the broken machine were within this statutory limit.

The employee filed a lawsuit against the employer claiming incorrect calculation of damages. In the employee’s opinion, the employer’s costs in the form of the salary of the other employees who repaired the machine should not be considered part of the damages. The case gradually proceeded to the Czech Supreme Court, which affirmed the employee’s views.

The Czech Supreme Court held that the employer was only entitled to reimbursement of such costs which would otherwise not have been incurred if there had been no damage, i.e. no broken machine in the case at hand. Since the employer asked its current employees to repair the machine, no such additional costs were incurred. The situation would have been different if these employees had needed to work overtime to repair the machine in time or if the employer had needed to engage external contractors or hire new employees to do the repairs - all of these would have been additional costs resulting in (or increasing) the damage to the employer.

Conclusions:

An employer is entitled to compensation for damage caused by its employees within the statutory limits. However, the employer may claim only damage that would not have arisen if the actual damaging act had not taken place. These could be various costs for new machine parts, costs of hired contractors to perform the repair or overtime work or work at night by the company’s own employees who were asked to repair the machine. The mere fact that the employer’s employees could have been engaged elsewhere is not sufficient for considering their salary part of the damages. The employer would have, for instance, needed to document that, due to the fact that the repairing employees could not be assigned elsewhere as planned, other work was not done in time, resulting in a contractual penalty.