Judgment of the Constitutional Court No. 201/2014 of 07-04-2014

Joint and several liability of directors, managers or officers for labour administrative offenses in the case of legal persons and other legal entities

The Constitutional Court did not hold unconstitutional the rule of Article 551(3) of the Labour Code, which, with regard to the person liable for labour administrative offenses, sets out that, if the offender is a legal person or other legal entity, its directors, managers or officers are liable for the payment of the fine jointly and severally with such legal person or other legal entity.

The Constitutional Court stated that from its case law does not follow the understanding that if there is administrative offense liability there is a breach of the Constitution on grounds of the violation of the principle of prohibition of the transfer of criminal liability, reminding that in the administrative offense area, the principles governing criminal law, in particular with regard to the requirement of the authorship of the act for the purpose of incrimination, do not apply automatically.

The Constitutional Court ruled on the application of criminal principles to administrative offenses. In particular, with regard to the principle of prohibition of the transfer of criminal liability, the Constitutional Court stated that this principle is constrained in compliance with the State duties of protection, to which the ordinary legislator is bound, which are designed to protect fundamental assets from potential aggressions from third parties.

Indeed, by holding liable its directors, managers or officers for the payment of the fine imposed on the legal person liable for the labour administrative offense, the legislator sought to afford greater effectiveness to the implementation of the penalty system in a domain where the Constitution expressly imposes duties of protection on it, albeit at the expense of the principle of prohibition of the transfer of criminal liability.

The Constitutional Court emphasised that the provision in question does not completely compromise the principle of prohibition of the transfer of liability, since the subjects are only held liable for the payment of the fine, while the authorship of the administrative offense itself is not ascribed to them.

It was also decided that the core of the principle is not constrained, inasmuch as the transfer of liability does not occur between individuals, but rather between a legal person – the entity liable for the labour administrative offense – and the members of the executive bodies of that same legal person. Thus, the Constitutional Court took into consideration the connection that exists between the subject liable for the administrative offense and the subjects that are held liable for the payment of the fine.

Finally, the Constitutional Court considered, that the compulsory assumption, based on the law, of the liability for the payment of a strictly financial penalty, to which no stigmatising legal effect is associated, does not confine the principle of fault in a manner that is in conflict with the Constitution, in particular having regard to the legislative reasons that justify such confining, thus existing a balance that is admissible vis-à-vis the Constitution.

Judgment of the Court of Appeal of Évora of 27-03-2014

Revocation of an employment contract termination agreement

With this judgment, the Court of Appeal of Évora was requested to examine the validity and effectiveness of the revocation of an employment contract termination agreement.

The employee, an accounting technician of the firm since 2007, signed, in October 2011, an employment contract termination agreement, whose signatures were not recognised by the notary in the notary’s presence. It so happens that the following day the employee backed out of the agreement, and sent a letter to the employer whereby she revoked the agreement.

The following day, the employee went to the premises of the employer to take her place of work, as well as to personally communicate the revocation of the agreement and to request the employer not to make the bank transfer of the amounts agreed.

At that time, she was informed that the first instalment of the payment had already been transferred. In view of this, the employee asked the bank account number of the firm to return the amount transferred, and the manager undertook to send her such account number by e-mail, which he did not do.

The Court of Appeal of Évora reminded that the Portuguese legal system provides for a potestative right of the employee to end an employment contract termination agreement by means of a declaration, provided the following legal requirements are complied with: (i) written form and (ii) refund of the amounts received.

The Court considered that, based on the termination agreement, the employee had no way to know the maturity date of the instalments, for which reason, at the time the communication for the agreement revocation was drawn up and sent, the employee did not know that the employer had already ordered the transfer of the first instalment. Consequently, it was only when she became aware that the said amount was already available for her that that she would have had to return it to the employer.

For this reason, the Court considered that the communication of the revocation of the employment contract termination agreement was valid and effective and that the employment relation between the parties should therefore have to be maintained.

Judgment of the Court of Appeal of Coimbra of 03-04-2014

Payment of the meal allowance

The Court of Appeal of Coimbra was requested to rule on the unlawfulness of the decision of a firm to unilaterally change the payment form of the meal allowance.

The employee in question received € 5.00 for each working day as meal allowance, which was paid in cash, since July 2001 until May 2013, date on which the employer changed, unilaterally and against the express will of the employee, the payment form of such allowance, which began to be paid by means of a meal card.

The employee claimed, in brief, that she was constrained in the use of what was hers, since the card is not universally accepted and is less secure, and that the same reduced her social protection and her future retirement pension.

On the other hand, the firm sustained that the change was lawful and that the card could be used universally, nationally and internationally, at any commercial establishment with an activity code of in the food sector. The employer therefore considered that there was no harm for the employee, who was merely prevented from withdrawing the money in cash at an ATM machine.

In the reasons stated, the Court of Appeal of Coimbra reminded that the meal allowance does not have the nature of remuneration in the legal sense, and that, in the case under consideration, it did not appear that the amount exceeded what was normal, nor that such allowance was classified as remuneration in the contract or by labour usage. The Court therefore concluded that the provisions of Article 276(1) of the Labour Code, whereby the payment of remuneration by means of non-pecuniary consideration can only take place with an agreement between the employer and the employee, did not apply to this allowance.

The Court of Appeal of Coimbra considered that money does not only amount to currency, but can also consist of precious metals or certain goods, credit and debit cards, cheques, among other used as means to settle debts. Thus, the new payment system of the meal allowance in meal cards is still a form of payment in cash.

In short, the Court concluded that, as the meal allowance could not be classified as remuneration in the technical sense, the employer could pay it by means of a meal card.