Lt

On the exaction of amounts of money pursuant to the requirements arising out of legal employment relations

Case No. 1/98

 

THE CONSTITUTIONAL COURT OF

THE REPUBLIC OF LITHUANIA

 

R U L I N G

 

On the compliance of Paragraph 3 of Article 476 of the Code of Civil Proceedings of the Republic of Lithuania with the Constitution of the Republic of Lithuania

 

Vilnius, 24 September 1998

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Egidijus Jarašiūnas, Kęstutis Lapinskas, Zigmas Levickis, Augustinas Normantas, Vladas Pavilonis, Jonas Prapiestis, Pranas Vytautas Rasimavičius, Teodora Staugaitienė, and Juozas Žilys

The court reporter—Sigutė Brusovienė

Jurgis Orlauskas, a senior consultant at the Legal Division of the Office of the Seimas, acting as the representative of the Seimas of the Republic of Lithuania, the party concerned

The Constitutional Court of the Republic of Lithuania, pursuant to Paragraph 1 of Article 102 of the Constitution of the Republic of Lithuania and Paragraph 1 of Article 1 of the Law on the Constitutional Court of the Republic of Lithuania, on 7 September 1998, in its public hearing, considered case No. 1/98 subsequent to the petition submitted to the Constitutional Court by the Alytus District Local Court, the petitioner, requesting an investigation into whether Paragraph 3 of Article 476 of the Code of Civil Proceedings of the Republic of Lithuania was in conformity to Article 23 of the Constitution of the Republic of Lithuania.

The Constitutional Court

has established:

I

The Alytus District Local Court, by its decision of 5 January 1996, partially satisfied a claim and recognised that the plaintiff had been dismissed from the joint-stock company Stalių gaminiai unlawfully, and awarded compensation to her.

On 21 March 1996, the College of Civil Cases of the Kaunas Regional Court satisfied the appeal of the plaintiff and increased the compensation that had to be paid to her.

By its ruling of 13 January 1997, the College of Civil Cases Department of the Supreme Court of Lithuania satisfied the appeal of the joint-stock company Stalių gaminiai and repealed the decision of the Alytus District Local Court and the ruling of the College of Civil Cases of the Kaunas Regional Court, and rejected the claim.

On 10 December 1997, in considering the civil case subsequent to the claim of the joint-stock company Stalių gaminiai regarding the exaction of unlawfully acquired property, the Alytus District Local Court ruled to suspend the case and apply to the Constitutional Court with the petition requesting an investigation into whether Paragraph 3 of Article 476 of the Code of Civil Proceedings (hereinafter referred to as the CCP) (Official Gazette Valstybės žinios, 1994, No. 93-1809) was in compliance with Article 23 of the Constitution.

II

The petitioner grounds its request on these arguments.

By the ruling of the College of Civil Cases Department of the Supreme Court of Lithuania the grounds upon which the plaintiff had received a certain amount of money from the joint-stock company Stalių gaminiai were repealed. Under Paragraph 3 of Article 476 of the CCP, after one has, under cassation procedure, repealed decisions regarding the exaction of amounts of money pursuant to the requirements arising out of legal employment relations, the reversal of their implementation shall be permitted only in the case that the repealed decision was based on false evidence given by the plaintiff or forged documents presented by the latter. The petitioner points out that Article 23 of the Constitution prescribes that property shall be inviolable. Therefore, the joint-stock company Stalių gaminiai is deprived of the opportunity to protect its property.

III

In the course of the preparation of the case for the judicial investigation, an explanation of the specialist V. Nekrošius, an adviser at the Ministry of Justice of the Republic of Lithuania on issues of civil law and proceedings, was received. It is maintained therein that the principle of inviolability of property is entrenched in Article 23 of the Constitution. The specialist noted that in civil law there exist two notions which are linked with seizure of property, i.e. seizure of property and the establishment of the limits on realisation of the right of ownership. Article 28 of the Constitution indicates that while exercising their rights and freedoms, persons must observe the Constitution and the laws of the Republic of Lithuania, and must not restrict the rights and interests of other people. This norm establishes certain limits on the behaviour. The right of ownership constitutes no exception to it, either. Both in the history of the institution of the right of ownership and today’s practice one faces quite a few limitations with regard to the limits of the realisation of the right of ownership (e.g. acquisitive statutory limitation, easements). Paragraph 3 of Article 476 of the CCP also ought to be linked with the scope of the limits of realisation of the right of ownership but not with seizure of property. This limitation is conditioned by the necessity to ensure the stability of the position of the party to the pleadings (employee) who is weaker from social standpoint, as well as peculiarities of the CCP. The second reason is particularly important as Article 361 of the CCP provides for an opportunity of appeal, while Items 9–12 of Paragraph 1 of Article 3713 of the CCP provide for the possibility of lodging an appeal after new circumstances come to light. Thus, there is a possibility that an effective decision may be repealed in 10 or 20 years’ time. The reversal of the execution of a decision in the cases provided for by Paragraph 3 of Article 476 would, under such conditions, damage the stability of court decisions and would limit the opportunity of employees to dispose of the amounts of money awarded to them by court. Therefore, the abolition of this norm may be discussed only in case respective amendments of the CCP are made so that they might limit the opportunity to appeal against an effective court decision while leaving the possibility of doing so during a comparatively short time period.

IV

In the course of the preparation of the case for the judicial investigation, an explanation of the specialist T. Birmontienė, Director of the Lithuanian Centre for Human Rights, was received. She maintains that the limitation on the reversal of implementation of the decisions as provided for by Paragraph 3 of Article 476 of the CCP (reversal shall be permitted only in the case that the repealed decision was based on false evidence given by the plaintiff or forged documents presented by the latter), especially in the cases at law regarding the exaction of amounts of money pursuant to the requirements arising out of employment relations, as well as the exaction of damages caused by the fact of crippling or other damage of health is just from the standpoint of social policy and may be deemed to be in conformity with the interests of society. In the opinion of the specialist, when one seeks the balance of interests, the said provision ought to be corrected.

V

In the court hearing Jurgis Orlauskas, a senior consultant at the Legal Division of the Office of the Seimas, the representative of the party concerned, explained that, in his opinion, the amount of money was exacted from the joint-stock company Stalių gaminiai on the grounds of an effective court decision.

In the opinion of the representative of the party concerned, because of the norm of Paragraph 3 of Article 476 of the CCP the respondent may not get back its funds which were exacted from it pursuant to an effective court decision, even though this decision regarding the exaction of the amount of money was later repealed. Formerly, the responsibility for the effects of effective decisions which had been repealed under cassation procedure used to be taken by the State.

The representative of the party concerned is of the opinion that in order to secure the interests of the respondent one has to fill the gap of legal regulation.

The Constitutional Court

holds that:

1. Paragraph 3 of Article 476 of the CCP provides: “In the case that one has, under cassation procedure, repealed decisions in the legal cases concerning the exaction of amounts of money pursuant to the requirements arising out of legal employment relations, the exaction of royalties for literary, scientific or art work, payment for a discovery or invention, for which an authorship certificate has been issued, the exaction of alimony, as well as the exaction of damages caused by crippling or otherwise damaging one’s health, or the deprivation of the life of a breadwinner, the reversal of the implementation of the said decisions shall be permitted only in the case that the repealed decision was based on false evidence given by the plaintiff or forged documents presented by the latter.”

The petitioner doubted whether the part of the norm of Paragraph 3 of Article 476 of the CCP by which in the event that one has, under cassation procedure, repealed decisions in the legal cases concerning the exaction of amounts of money pursuant to the requirements arising out of legal employment relations, the reversal of the implementation of the said decisions shall be permitted only in the case that the repealed decision was based on false evidence given by the plaintiff or forged documents presented by the latter, was in conformity to Article 23 of the Constitution prescribing that property shall be inviolable, as in the said case the respondent is deprived of the possibility of the recovery of his property.

2. Article 23 of the Constitution provides:

Property shall be inviolable.

The rights of ownership shall be protected by law.

Property may only be seized for the needs of society according to the procedure established by law and must be adequately compensated for.”

These norms, which constitute an indivisible whole, guarantee the protection of the rights of ownership. The inviolability of property as established by the Constitution obligates other subjects not to violate the rights of the owner. The State must protect and safeguard property from any encroachment upon it.

In Paragraph 2 of the aforesaid article of the Constitution the legal protection of the right of ownership is established. This norm of the Constitution also conditions the fact that in order to protect property a system of laws is created which has to ensure the protection of various and dynamic ownership relations. The main objective of the creation of such a system of laws is harmonisation of the legal norms designated for such a protection, as well as elimination of possible contradictions in the protection of the rights of ownership. Alongside, it should be noted that one may not treat the rights of ownership unconditionally. Unconditional treatment of the rights of ownership would create pre-conditions for violating the rights of other persons or other values protected by the Constitution. The objective of the legal regulation is to harmonise fairly important interests, to ensure their balance and, along with that, to establish sufficient limits on the protection of the rights of ownership.

The norm of Paragraph 3 of Article 23 of the Constitution, which provides that property may only be seized for the needs of society according to the procedure established by law and must be adequately compensated for is a logical continuation of the aforementioned norms.

3. Civil proceedings do not terminate after the adoption of a court decision or accomplishment of the consideration of a cassation case. In a particular case at law civil proceedings reach their aim only after a decision adopted by a court has been executed. Providing the court decision is not implemented of one’s own free will, coercive measures of the execution of the court decision as provided for by the CCP are applied.

In cases and procedure provided for by law, the effective court decision may be repealed. In such a case there arises the question of reinstatement of the parties to the pleadings into the legal situation which had been before the execution of the court decision. Paragraph 1 of Article 474 of the CCP provides that provided an effective court decision shall be repealed and, after investigating the case anew, one adopts a decision to reject the claim or a ruling is passed to dismiss the case or to leave the claim not investigated, the respondent must be given back everything that has been exacted from him in favour of the plaintiff. This is referred to as reversal of the execution of a court decision. Provided there is not any opportunity to return the said property, the court in its decision or ruling should indicate that the value of this property must be compensated, and in cases when the property has been realised, it must indicate the amount of money which was acquired after its realisation and which must be compensated.

In addition, the respondent is also entitled to claim that the person performing exactions compensate damages which appeared after the prompt execution of a court decision which later was repealed in the case that the prompt execution was granted on the request of the said person performing exactions.

The CCP establishes several fundamentals of the reversal of the execution of the decision: repeal under appeal or cassation procedure of the executed decision and dismissal of the case; repeal of the executed court decision and leaving the claim not investigated; repeal of the executed court decision and adoption of a new decision by which the claim is not satisfied.

In certain categories of civil cases, however, limitations on the reversal of the execution of court decisions are established. Such limitations are also prescribed in Paragraph 3 of Article 476 of the CCP wherein the impugned part of the norm is set forth and which provides that in the case that one has, under cassation procedure, repealed decisions in the legal cases concerning the exaction of amounts of money pursuant to the requirements arising out of legal employment relations, the reversal of the implementation of the said decisions shall be permitted only in the case that the repealed decision was based on false evidence given by the plaintiff or forged documents presented by the latter.

The purpose of procedural norms is to ensure the implementation of the norms of substantive law. Therefore, in order to better comprehend the meaning of one or another rule of the proceedings, one has to elucidate the peculiarities of the norms of substantive law that are linked with the former. The impugned procedural norm is linked with the area of the legal regulation of employment relations. Thus, in shedding light to the question of the compliance of the limitation with the Constitution, one has to take account of the peculiarities of the legal regulation of employment relations.

4. Chapter IV of the Constitution entitled National Economy and Labour not only consolidates freedom of individual economic activity and the right to private ownership on which the economy of this country is based but also establishes regulation of economic activity so that it may serve the general welfare of the people. In the norms of this chapter, economic and social areas are not set off against but supplement each other. Therefore, it is not by accident that the fundamentals of the protection of human labour rights are entrenched in the Constitution. For instance, Article 48 of the Constitution prescribes that every person may freely choose an occupation or business, and shall have the right to adequate, safe and healthy working conditions, adequate compensation for work, and social security in the event of unemployment. Article 49 of the Constitution guarantees that every person shall have the right to rest and leisure, as well as to annual paid holidays. It is provided for therein that working hours shall be established by law. Other norms of the Constitution provide for ways of protection of economic and social interests of employees, social assistance is secured etc.

It is possible to assert that human labour rights as established in the Constitution constitute an integral group which is part of the constitutional status of a human being. In the Constitution a working human being is treated from the humanistic standpoint. The human being is understood not as an abstract social, economic or professional category or a participant of the relations of production but as a free personality the human dignity of whom ought to be protected.

The parties of employment relations are the employee and the employer. These are subjects who are different in respect to their rights and duties. The duty of the State is to ensure co-operation between the subjects of employment relations on the grounds of social partnership and to protect the rights of the employee as he is, as a rule, from the economic and social standpoint, the weaker party. The system of values that is established in the Constitution determines the fact that the legal norms regulating employment relations and the areas linked with them must not only provide for the protection of the employee in the process of work but also ensure a whole spectrum of the guarantees of the rights of a working human being in an attempt to avoid groundless domination of one party of employment relations and dependency of the other party. It should be noted that it is these aims which determine the legal regulation of employment relations.

The following principles are characteristic of the legal regulation of employment relations: the equality of the parties of an employment contract; establishment of supplementary guarantees in respect of most violable groups of citizens; the prohibition against any unilateral amendment of the conditions which have been agreed upon by the parties; the right of the employee to cancel the work contract under the procedure established by law; an opportunity for the employer to cancel the work contract only pursuant to the fundamentals established by law; the equality of rights of employees irrespective of their sex, race, nationality, citizenship, political views, attitude towards religion and other circumstances which are not linked with the performance characteristics of employees.

In an attempt to ensure the balance between the employer and employee, in employment relations certain guarantees are established for the employees which may not be diminished by the parties in their agreement. These are: minimum remuneration for work, compensation for idle time in cases provided for by law, retirement benefits, strict regulation of the cancelling of an employment contract on the initiative of the employer etc. The implementation of these measures provided for by law is linked with certain expenses of the employer. These measures are, however, necessary in order to protect the social needs of the employee.

Both sufficient protection of the property interests of the employer and protection of the employment rights of the employee are necessary pre-conditions for normal economic activity in a modern society. The legislature must harmonise different interests and ensure the balance of constitutional values. Therefore, the compliance of the limitation on the reversal of executed decisions in the cases concerning the exaction of amounts of money pursuant to the requirements arising out of legal employment relations as established by the Code of Civil Proceedings with the Constitution should be assessed while taking account of the relation of the aforesaid constitutional values.

5. In deciding the constitutionality issue of the impugned norm, one should take into consideration its place in civil proceedings. As mentioned before, the limitation on the reversal of the executed decision as established by this norm is linked with the repealing of an executed decision in cassation proceedings.

Coming into effect of a court decision causes certain legal effects. The effective court decision becomes mandatory to all state institutions or officials, all natural persons, enterprises, offices and organisations, and it must be implemented on the entire territory of the country.

Court decisions are implemented after they have taken effect with the exception of the cases when they are implemented promptly. It is the effective decision that becomes a document to be accomplished and after that it is executed. Provided the debtor does not voluntarily fulfil an effective decision, the procedure of coercive execution is instituted.

The amounts of money which are exacted by way of executing effective decisions pursuant to the requirements arising out of employment relations are, as a rule, used for subsistence in cases when the respondent is an employee. Remuneration for work is the main and often the only source of subsistence for the employee and his/her dependants. Therefore, the stability of court decision becomes of utmost importance in this sphere.

6. The part of the norm of Paragraph 3 of Article 476 of the CCP by which the reversal of decisions in the cases concerning the exaction of amounts of money pursuant to the requirements arising out of legal employment relations is limited is within the sphere of ownership relations. The legal system of the Republic of Lithuania protects the rights of ownership. The nature of constitutional values, with which property law is confronted, determines concrete limits of the protection. In establishing them, one has to take account of the relation of the clashing values. These limits are not the same in every case. It is important that the legislature, in establishing them, should not restrict them so that it would become impossible to implement them.

The interaction between the entirety of constitutional labour rights which ensure human dignity and the rights of ownership not only determine the direct legal regulation of the relations between the employer and the employee but also condition the norms of civil proceedings which are linked with these relations. It should be noted that the norms of the CCP permit the reversal of an executed court decision when the interests of the respondent are protected. This is a common rule. Such reversal is limited only in exceptional cases in the legal cases arising out of legal employment relations, concerning exaction of alimony, as well as the exaction of damages caused by crippling or otherwise damaging one’s health, or the deprivation of the life of a breadwinner etc., with the exception of cases when the repealed decision was based on false evidence given by the plaintiff or forged documents presented by the latter. Such limitations are conditioned by the necessity to protect the vital interests of a human being. The fact that the legislature seeks to protect only the most important interests of the plaintiff also confirms that after one has established ill will of the plaintiff, i.e. provided the repealed decision was based on false evidence given by the plaintiff or forged documents presented by the latter, the reversal of a repealed decision is permitted in the cases of this category, too.

The impugned part of the norm of Paragraph 3 of Article 476 of the CCP only reflects the interaction of the said 2 constitutional values. In this particular case, the legislature gave priority to the protection of the rights of the employee which are linked with human dignity. It should be noted that this norm in itself should not be judged to be a hindrance to the employer when he protects his property interests. It does not regulate this issue. Therefore, there is no reason to maintain that this part of the norm is not in line with Article 23 of the Constitution.

Alongside, one should not forget the historical context of the enactment of the impugned norm. Under the conditions of the prevailing state ownership, from the standpoint of the protection of this ownership it was not of much importance whether the legal situation provided for in Paragraph 3 of Article 476 of the CCP occurred due to the actions of the state institutions which were settling the disputes or those of the administration of enterprises, offices or organisations. Under the conditions of the market economy based on private ownership, the property interests of the private owner should not suffer due to different decisions of judicial institutions. Meanwhile, in the valid legal system these relations have not been fully legally regulated. The elimination of gaps in laws is within the prerogative of the legislature.

In view of the foregoing reasoning and arguments, the conclusion should be drawn that the impugned part of the norm of Paragraph 3 of Article 476 of the CCP is in compliance with Article 23 of the Constitution.

Conforming to Article 102 of the Constitution of the Republic of Lithuania and Articles 53, 54, 55 and 56 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

To recognise that the part of the norm of Paragraph 3 of Article 476 of the Code of Civil Proceedings of the Republic of Lithuania, wherein it is established that in the case that one has, under cassation procedure, repealed decisions regarding the exaction of amounts of money pursuant to the requirements arising out of legal employment relations, the reversal of the implementation of the said decisions shall be permitted only in the case that the repealed decision was based on false evidence given by the plaintiff or forged documents presented by the latter, is in compliance with the Constitution of the Republic of Lithuania.

This ruling of the Constitutional Court is final and not subject to appeal.

The ruling is pronounced in the name of the Republic of Lithuania.

Justices of the Constitutional Court:

 

Egidijus Jarašiūnas     Kęstutis Lapinskas     Zigmas Levickis

 

Augustinas Normantas     Vladas Pavilonis      Jonas Prapiestis

 

Pranas Vytautas Rasimavičius      Teodora Staugaitienė      Juozas Žilys