No right to cumulatively seek compensation of lost salaries and lump-sum damages instead of reintegration

The Supreme Court of Cassation of the Republic of Serbia (“SCC”) in its decision no. Rev2 1846/2015 (“Decision”) took the opinion that in case of unlawful termination of employment plaintiff cannot cumulate claim for lump-sum damages instead of reintegration and compensation of lost salaries.

In this dispute, the plaintiff – a former employee filed a lawsuit requesting from the court to annul the resolution on termination of employment as unlawful and to oblige the defendant to return her to work. In addition, the plaintiff requested the court to oblige the defendant to compensate her for lost salaries from the date of termination of employment until the date of return to work and to pay pertaining taxes and contributions for compulsory social insurance.

In the first instance decision the court rejected plaintiff’s claims as unfounded. However, on appeal the appellate court reversed the first instance court decision and adopted all plaintiff’s claims. Against final decision the defendant submitted a revision to SCC.

Deciding on the revision of the defendant, SCC dismissed the revision as unfounded and confirmed the second instance court decision.

However, what is specific regarding this Decision is the stance that SCC has taken regarding the compensation of damage suffered by the employee in case of unlawful termination of employment in accordance with the Article 191 of the Labor Law (“Law“).

Namely, in the reasons of the Decision SCC stated that in accordance with the Article 191 of the Law an employee whose employment was unlawfully terminated has the right to be reintegrated, if so requested during the procedure. In addition to reintegration, the employee is entitled to compensation in the amount of lost salaries and other remuneration which belongs to him/her. However, if the employee does not request reintegration, the court shall oblige the employer to compensate him/her for the damage in the amount of up to 18 salaries that the employee would have received if he/she was working in accordance with Article 191, paragraph 4 of the Law (i.e. lump-sum damage instead of reintegration), at the request of the employee.

However, based on the opinion of SCC lump-sum damage compensation instead of reintegration in accordance with the Article 191 paragraph 4 of the Law and compensation of lost salaries, referred to in paragraph 2 of the same Article, are two different types of damage, which cannot be cumulatively awarded to the employee whose employment was unlawfully terminated.

In words of SCC: “damage compensation instead of reintegration in accordance with the Article 191 paragraph 4 of the Law and compensation of lost salaries, referred to in paragraph 2 of the same Article, are two different types of damage, which only cumulatively cannot be awarded to the employee whose employment was unlawfully terminated”.

Therefore, according to the opinion of SCC from the quoted Decision, if the employee would choose the lump-sum damages instead of reintegration, the court would not have the possibility to award him/her also compensation of the lost salaries for the period as of the date of termination of employment.

Having in mind the diverse practice of courts in Serbia on this issue, it remains to be seen whether this opinion of SCC will become prevailing in our judicial practice. In any case, this Decision of SCC can give good arguments to the defendant employers in cases where the plaintiff opted for the lump-sum damages instead of reintegration.

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