Important and/or distinctive aspects of rights on termination in Slovakia
It is a standard practice that labour law documents, including such documents as termination letters, are signed by persons who are authorised by a power of attorney to act on behalf of the employer. For groups of companies with a multi-branched organisational structure sharing a common HR department, it is not uncommon that labour law documents are signed by a representative of the central HR department instead of the subsidiary company.
However, pursuant to a decision of the Slovak Supreme Court (NS SR 4 Cdo 4/2012), all legal acts (including termination of employment), which are executed by proxies who are not granted the suitable power of attorney by the employer are invalid. This very restrictive interpretation of the law deviates from previous practice. This judgment held that: “According to Sec. 9 (1) of the Labour Code, in labour law relations, statutory bodies act on behalf of an employer - legal entity; the employer – natural person acts personally. Instead of them, legal acts of employers may be carried out also by authorised employees. Other employees of the employer, especially heads of the organisational units, are entitled to act on behalf of the employer in labour law relations based on their position as determined in organisational regulations. According to Section 2, an employer may grant written power of attorney also to other employees, who may then carry out certain legal acts in labour law relations on its behalf. The written power of attorney shall determine the scope of the powers granted to an authorised employee. The Supreme Court expressly stated that this regulation excludes the application of Civil Code rules governing representation.
In this case, individuals, who acted on behalf of the employer, signed and served a summary notice on the basis of the written power of attorney. The Supreme Court declared that the notice was null and void, since they were not employees of the represented employer at that time.
Following the logic of the decision, termination notice by the employer may be carried out solely by its statutory body or by an authorised employee of the represented employer. Surprisingly, the court clearly excluded the possibility of acting on behalf of the employer on the basis of power of attorney granted according to the Civil Code. This introduces a profound restriction to one of the basic principles of private law – right to act via an authorised person.
We consider the interpretation of the Supreme Court as an equally severe and unjustified interference to the operation of the employers. It particularly affects groups of companies, in which HR departments or in-house lawyers are limited to act for group members in termination of employment and all other legal acts according to the Labour Code. This is all the more relevant for the trend in the current globalised economy, increasingly shifting towards collaborative models of cooperation, which means that it makes little sense to restrict the acting of the employer to one particular legal entity.