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On the interpretation of the provisions of the Constitutional Court’s ruling of 1 July 2013 related to compensation for the remuneration reduced in a disproportionate manner

Case No. 125/2010-26/2011-21/2012-6/2013-8/2013-10/2013

 THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

 DECISION

ON THE CONSTRUCTION OF CERTAIN PROVISIONS OF THE RULING OF THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA OF 1 JULY 2013

 16 April 2014, No. KT14-S9/2014

Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Elvyra Baltutytė, Vytautas Greičius, Danutė Jočienė, Pranas Kuconis, Gediminas Mesonis, Vytas Milius, Egidijus Šileikis, Algirdas Taminskas, and Dainius Žalimas

The court reporter—Daiva Pitrėnaitė

The Constitutional Court of the Republic of Lithuania, pursuant to Articles 61 and 531 of the Law on the Constitutional Court of the Republic of Lithuania, at the Court’s hearing, on 15 April 2014, considered, under written procedure, the petition (No. 1B-7/2014) of Gintaras Kryževičius, President of the Supreme Court of Lithuania, requesting the construction of certain provisions of Paragraph 2 of Item 2 of Section XIV of the reasoning part of the Ruling of the Constitutional Court of the Republic of Lithuania “On the compliance of the provisions of the laws of the Republic of Lithuania establishing the reduced remuneration of state servants and judges in an extremely difficult economic and financial situation in the state with the Constitution of the Republic of Lithuania” of 1 July 2013.

The Constitutional Court

has established:

  1. On 1 July 2013, in constitutional justice case No. 125/2010-26/2011-21/2012-6/2013-8/2013-10/2013, the Constitutional Court adopted the Ruling “On the compliance of the provisions of the laws of the Republic of Lithuania establishing the reduced remuneration of state servants and judges in an extremely difficult economic and financial situation in the state with the Constitution of the Republic of Lithuania” (Official Gazette Valstybės žinios, 2013, No. 103-5079; hereinafter referred to as the Constitutional Court’s ruling of 1 July 2013).
  2. Gintaras Kryževičius, President of the Supreme Court of Lithuania, the petitioner, requests the construction whether the provisions “<...> after this Constitutional Court’s ruling has recognised the legal provisions that laid down the disproportionate extent of the reduction of the remuneration of the persons who are paid for their work with the funds of the state budget or municipal budget as conflicting, inter alia, with the provision ‘[e]ach human being <…> shall have the right <…> to receive fair pay for work’ of Paragraph 1 of Article 48 of the Constitution, the requirement for establishing a mechanism of the compensation for the losses incurred by the persons who are paid for their work with the funds of the state budget or municipal budget stems from Article 23 of the Constitution; such a mechanism means the procedure, according to which the state, within a reasonable time (inter alia, in view of the economic and financial situation of the state and after an assessment of the accumulation (receiving) of the funds required for such compensation) and in a fair manner, to the extent that the incurred losses were disproportionate, will compensate for such losses. Such legal regulation should be established without any unreasonable delay in order to avoid numerous applications to courts lodged by the persons who are paid for their work with the funds of the state budget or municipal budget requesting that the courts award them the remuneration’s unpaid part that came into being after the legal provisions, which have been recognised by this Constitutional Court’s ruling as conflicting with the Constitution, had reduced the coefficients of the positional salaries (remuneration) or the amounts of the additional pay for the qualification class or for qualification category” of Paragraph 2 of Item 2 of Section XIV of the reasoning part of the Constitutional Court’s ruling of 1 July 2013 mean that:
  • “in view of the economic and financial situation of the state and upon the assessment of the opportunities to accumulate (receive) funds necessary for such compensation, the non-establishment of such legal regulation or the postponement of established legal regulation could be constitutionally justifiable”;
  • “the duty of the legislature, derived from the Constitution, to establish the mechanism of the compensation for the losses incurred due to the disproportionate reduction of remuneration, which would fairly compensate, within a reasonable time, such losses by ensuring the proportionate protection of all constitutional values, also mean that the right of the persons who incurred such losses could be implemented in this sphere in a different manner, inter alia, also under judicial procedure, rather than within the time limits and under the procedure of the legal regulation implementing the provisions of the Constitutional Court’s ruling the construction of which is requested”.

The Constitutional Court

holds that:

I

  1. 1. The purpose of the institute of the construction of the rulings and other final acts of the Constitutional Court is to disclose the content and meaning of the corresponding provisions of a ruling or another final act of the Constitutional Court more broadly and in more detail, if it is necessary, in order to ensure the proper execution of that ruling or another final act of the Constitutional Court so that the said ruling or another final act of the Constitutional Court would be followed (inter alia, the Constitutional Court’s decisions of 22 December 2010, 5 September 2011, 29 November 2012, and 10 March 2014). The construction of a ruling or another final act of the Constitutional Court might be significant not only in order to ensure the proper implementation of the decision consolidated in the operative part of that act, but also to ensure the fact that in the law-making process one would properly take account of the official constitutional doctrine formed by the Constitutional Court (the Constitutional Court’s decisions of 29 November 2012, 13 March 2013, 3 July 2013, 16 January 2014, and 7 March 2014). In its decision of 29 November 2012, the Constitutional Court emphasised that the purpose of the construction of a ruling or another final act of the Constitutional Court is to explain more comprehensively those provisions and formulations of the Constitutional Court’s ruling or its another final act due to the meaning of which there have been some uncertainties but not to explain how to implement the said ruling or another final act in a concrete situation, inter alia, in the area of the application of law.
  2. The Constitutional Court has emphasised on more than one occasion that the consideration of a petition requesting the construction of a ruling or another final act of the Constitutional Court does not imply any new constitutional justice case.

In this context, it should be noted that, under Paragraph 3 of Article 61 of the Law on the Constitutional Court, the Constitutional Court must construe its ruling without changing the content of the ruling. The Constitutional Court has held on more than one occasion that the said provision means, among other things, that, while construing its ruling, the Constitutional Court may not construe the content of the ruling in such a way that the meaning of its provisions, inter alia, the notional entirety of the elements constituting the content of the ruling, and the arguments and reasons upon which that ruling of the Constitutional Court is based would be changed. A ruling of the Constitutional Court is integral, and all its constituent parts are interrelated; the operative (resolving) part of a ruling is based upon the arguments of the reasoning part; while construing its ruling, the Constitutional Court is bound by the content of both the operative part and reasoning part of its ruling.

When construing Paragraph 3 of Article 61 of the Law on the Constitutional Court, the Constitutional Court has stated in its acts on more than one occasion that the Constitutional Court may not construe what it did not investigate in the constitutional justice case in which the ruling, the construction of which is requested, was adopted; this would imply a matter for a separate investigation.

  1. It should also be noted that the uniformity and continuity of the official constitutional doctrine imply the necessity to construe each provision of a ruling or another final act of the Constitutional Court in the light of the entire official constitutional doctrinal context as well as of other provisions (both explicit and implicit) of the Constitution that are related to the provision (provisions) of the Constitution in the course of the construction of which the relevant provision of the official constitutional doctrine was formulated in a certain ruling or another final act of the Constitutional Court. As the Constitutional Court has held on more than one occasion, no official constitutional doctrinal provision of a ruling or another final act of the Constitutional Court may be construed in isolation, by ignoring its meaning and systemic links with the other official constitutional doctrinal provisions set forth in the relevant ruling, another final act of the Constitutional Court, or in other acts of the Constitutional Court, as well as with other provisions (both explicit or implicit) of the Constitution (inter alia, the Constitutional Court’s decisions of 6 December 2007, 28 October 2009, 13 March 2013, 3 July 2013, and 10 March 2014).

II

  1. The President of the Supreme Court of Lithuania, the petitioner, requests the construction of the following provisions of Paragraph 2 of Item 2 of Section XIV of the reasoning part of the Constitutional Court’s ruling of 1 July 2013:

“<...> after this Constitutional Court’s ruling has recognised the legal provisions that laid down the disproportionate extent of the reduction of the remuneration of the persons who are paid for their work with the funds of the state budget or municipal budget as conflicting, inter alia, with the provision ‘[e]ach human being <…> shall have the right <…> to receive fair pay for work’ of Paragraph 1 of Article 48 of the Constitution, the requirement for establishing a mechanism of the compensation for the losses incurred by the persons who are paid for their work with the funds of the state budget or municipal budget stems from Article 23 of the Constitution; such a mechanism means the procedure, according to which the state, within a reasonable time (inter alia, in view of the economic and financial situation of the state and after an assessment of the accumulation (receiving) of the funds required for such compensation) and in a fair manner, to the extent that the incurred losses were disproportionate, will compensate for such losses. Such legal regulation should be established without any unreasonable delay in order to avoid numerous applications to courts lodged by the persons who are paid for their work with the funds of the state budget or municipal budget requesting that the courts award them the remuneration’s unpaid part that came into being after the legal provisions, which have been recognised by this Constitutional Court’s ruling as conflicting with the Constitution, had reduced the coefficients of the positional salaries (remuneration) or the amounts of the additional pay for the qualification class or for qualification category.”

  1. In its ruling of 1 July 2013, the Constitutional Court investigated the legal provisions that had established the reduced remuneration of state officials and judges after the emergence of a particularly difficult economic and financial situation in the state. The Constitutional Court held, inter alia, that the impugned legal regulation had established a disproportionate extent of the reduction of the remuneration of the officials of the institutions funded from the funds of the state and municipal budgets, and of the remuneration of state servants and judges, it, had violated the proportions of the amounts of the remuneration of different positions of judges (justices of the Constitutional Court, judges of courts of general jurisdiction or specialised courts) established in the period prior to the occurrence of the particularly grave economic and financial situation in the state, as well as the proportions of the amounts of the remuneration of judges and those of categories of other persons (state servants, state politicians and officials, prosecutors) who are paid for work with the funds of the state or municipal budgets.
  2. The provisions, the construction of which is requested by the petitioner, of Paragraph 2 of Item 2 of Section XIV of the reasoning part of the Constitutional Court’s ruling of 1 July 2013, are a constituent part of Section XIV of the reasoning part of the same ruling. Item 2 of Section XIV consolidated the requirement for the legislature to establish the mechanism of compensation for the incurred losses. The same item, inter alia, held the following:

“2. In the context of the constitutional justice case at issue it should be noted that, after the Constitutional Court has recognised the legal regulation that laid down the disproportionate extent of the reduction of the remuneration of the persons who are paid for their work with the funds of the state budget or municipal budget as conflicting with the provision ‘[e]ach human being <…> shall have the right <…> to receive fair pay for work’ of Paragraph 1 of Article 48 of the Constitution, the legislature must, pursuant to the requirement stemming from Article 23 of the Constitution, establish a mechanism of the compensation for the losses incurred by those persons; it means, among other things, that a procedure must be established on the grounds of which the state, within a reasonable time, in a fair manner and to the extent that the incurred losses were disproportionate, will compensate for such losses.”

  1. It has been mentioned that the petitioner, by pointing out the provisions of Paragraph 2 of Item 2 of Section XIV of the Constitutional Court’s ruling of 1 July 2013, requests the construction of, inter alia, whether, “in view of the economic and financial situation of the state and upon the assessment of the opportunities to accumulate (receive) funds necessary for such compensation, the non-establishment of such legal regulation or the postponement of established legal regulation could be constitutionally justifiable”.
  2. It has been mentioned that the provisions of a ruling of the Constitutional Court should be construed in the light of the entire official constitutional doctrinal context as well as of other provisions (both explicit and implicit) of the Constitution that are related with the provision of the Constitution in the course of the construction of which the relevant provision of the official constitutional doctrine was formulated in the ruling of the Constitutional Court; no provision of a ruling of the Constitutional Court may be construed by ignoring its meaning and systemic links with the other official constitutional doctrinal provisions and other provisions of the Constitution.
  3. The implementation of the legislature’s duty to establish the mechanism of compensation for the incurred losses, which is provided for in the provisions, the construction of which is requested by the petitioner, of the Constitutional Court’s ruling of 1 July 2013 is related to an economic and financial situation in the state and the capabilities of the state to accumulate the funds necessary for such compensation. Thus, these provisions should be construed in the context of the provisions of Item 14 of Article 67 and Paragraph 1 of Article 131 of the Constitution, which consolidate the powers of the Seimas to approve a draft State Budget. Under the Constitution, the Seimas shall approve the State Budget and supervise its execution (Item 14 of Article 67).

6.1. The Constitutional Court has held on more than one occasion that the constitutional concept of the state budget and the constitutional principle of responsible governance mean that the state budget must be realistic and that the revenue and expenditure provided for therein must be grounded upon an assessment of the needs and possibilities of society and the state. The Constitutional Court has also held that the constitutional imperative of an open, just and harmonious civil society, the necessity to ensure the constitutional rights and freedoms of persons and to protect the other values entrenched in the Constitution imply the duty of the Government, in the course of the preparation of the draft budget of the state, and the right of the Seimas, in the course of the consideration of and approving the state budget, to take into consideration the state functions established in the Constitution, the existing economic and social situation, the needs and possibilities of society and the state, the available and potential financial resources and state obligations (inter alia, international ones), as well as other important factors (the Constitutional Court’s rulings of 11 July 2002 and 15 February 2013).

6.2. In the Constitutional Court’s acts, it has been held on more than one occasion that the Seimas is bound not only by the Constitution, but also by the laws that it itself has adopted. Thus, while considering and approving a draft state budget, the Seimas must follow the laws that presuppose a certain amount of estimated state revenue and expenditure, i.e. it must follow the tax laws and other laws that create preconditions for planning and collecting state budget revenues, as well as the laws determining state financial obligations and corresponding planned state budget expenditure (the Constitutional Court’s ruling of 15 February 2013). The Constitutional Court has noted that, under the Constitution, the legislature, when passing a law or other legal act the implementation of which requires funds, must provide for the funds necessary for the implementation of such a law or other legal act; under the Constitution, the legislature may not create any such legal situation where, after the passing of a law or other legal act the implementation of which requires funds, such funds are not allocated or the allocation thereof is not sufficient (the Constitutional Court’s rulings of 13 December 2004, 21 December 2006, 29 June 2010, and 15 February 2013).

6.3. The Constitutional Court has held that, from the constitutional institute of a budget year, a duty stems for the legislature, in the course of deliberating and approving the State Budget for the next year, to reassess the actual economic and financial situation in the state and to decide whether the said situation is still a particularly grave one, inter alia, whether the collection of the State Budget revenue is still disordered to the extent that, due to this, the state is unable to perform the obligations undertaken by it (the Constitutional Court’s ruling of 6 February 2012 and its decision of 20 April 2010). While submitting the draft state budget to the Seimas, the Government must substantiate the revenues and allocations indicated therein with the evaluation of the needs and possibilities of the state and society; this information has to be public (the Constitutional Court’s ruling of 14 January 2002). This means, among other things, that society must be presented with concrete criteria upon which the assessment of the economic and financial situation of the state is based, determining the planning of the state budget revenue and expenditure and a possible need respectively to amend the laws that affect the revenue and expenditure, especially the laws establishing obligations of and limitations upon persons (the Constitutional Court’s ruling of 15 February 2013).

  1. In the context of this decision, the provisions of the official constitutional doctrine formulated in the Constitutional Court’s decision of 7 March 2014 related to the establishment of the mechanism of compensation for reduced old-age pensions should be mentioned:

– under the Constitution, inter alia, Articles 23 and 52 thereof, a duty stems for the state to compensate, in a fair manner, all persons whose old-age pensions were reduced due to an extreme situation (an economic crisis, etc.) in the state for the losses incurred by them;

  • the aforementioned losses must be compensated for within a reasonable time after the extreme situation is over in the state by following a legal act (a law) that is adopted by the legislature without unreasonable delay and that provides for a mechanism for compensation for the said losses;
  • the notion “without unreasonable delay”, inter alia, means that this mechanism for compensation must be established after the extreme situation is over in the state when preconditions arise for assessing, according to objective data (economic indicators, inter alia, indicators of economic growth, funds accumulated by the state), the respective capabilities of the state to ensure compensation for the losses incurred after the reduction of old-age pensions.

In the same decision, the Constitutional Court provided the construction that after the extreme situation is over in the state and after preconditions arise for assessing, according objective data (economic indicators, inter alia, indicators of economic growth, funds accumulated by the state), the respective capabilities of the state, fair compensation for the losses incurred due to the reduction (inter alia, where the reduction resulted from the adoption of the legal provisions later ruled to be in conflict with the Constitution) of old-age pensions must be ensured; under the Constitution, inter alia, under the constitutional imperative of social harmony, this may be ensured as appropriate in a fair manner only by invoking the amounts, terms and other essential elements of compensation for the losses incurred, as established by the legislature.

In its decision of 7 March 2014, the Constitutional Court also provided the construction that the legislature must establish a mechanism for compensation for the reduced (inter alia, by means of the provisions of a law that were later ruled to be in conflict with the Constitution) old-age pensions, inter alia, the starting date of the payment of compensation and a reasonable period of time during which the losses incurred due to the reduction of the said pensions will be compensated for, by taking account of the consequences of an extreme situation and the capabilities of the state, inter alia, various obligations assumed by the state, which, inter alia, are related to financial discipline, thus, also to the imperative of balancing the revenue and expenditure of the state budget.

  1. In order to construe the provisions of the Constitutional Court’s ruling of 1 July 2013 in the aspect specified by the petitioner, it should be noted that, as mentioned before, after the Constitutional Court has recognised the legal regulation that laid down the disproportionate extent of the reduction of the remuneration of the persons who are paid for their work with the funds of the state budget or municipal budget as conflicting with the provision “[e]ach human being <…> shall have the right <…> to receive fair pay for work” of Paragraph 1 of Article 48 of the Constitution, the legislature must, pursuant to the requirement stemming from Article 23 of the Constitution, establish a mechanism of the compensation for the losses incurred by those persons; it means, among other things, that a procedure must be established on the grounds of which the state, within a reasonable time, in a fair manner and to the extent that the incurred losses were disproportionate, will compensate for such losses.
  2. In this decision the following has been mentioned:
  • the state budget must be realistic and the revenue and expenditure provided for therein must be grounded upon an assessment of the needs and possibilities of society and the state;
  • under the Constitution, the legislature, when passing a law or other legal act the implementation of which requires funds, must provide for the funds necessary for the implementation of such a law or other legal act;
  • from the constitutional institute of a budget year, a duty stems for the legislature, in the course of deliberating and approving the State Budget for the next year, to reassess the actual economic and financial situation in the state and to decide whether the said situation is still a particularly grave one, inter alia, whether the collection of the State Budget revenue is still disordered to the extent that, due to this, the state is unable to perform the obligations undertaken by it;
  • society must be presented with concrete criteria upon which the assessment of the economic and financial situation of the state is based, determining the planning of the state budget revenue and expenditure and a possible need respectively to amend the laws that affect the revenue and expenditure, especially the laws establishing obligations of and limitations upon persons;
  • the losses must be compensated for within a reasonable time after the extreme situation is over in the state by following a legal act (a law) that is adopted by the legislature, without unreasonable delay, and that provides for a mechanism for compensation for the said losses;
  • such legal regulation should be established without any unreasonable delay in order to avoid numerous applications to courts lodged by the persons who are paid for their work with the funds of the state budget or municipal budget requesting that the courts award them the remuneration’s unpaid part that came into being after the legal provisions, which have been recognised by this Constitutional Court’s ruling as conflicting with the Constitution, had reduced the coefficients of the positional salaries (remuneration) or the amounts of the additional pay for the qualification class or for qualification category.

Thus, it should be held that the legislature, while following the constitutional principle of responsible governance, may postpone the establishment and/or implementation of the mechanism of compensation for the losses incurred due to the disproportionate reduction of remuneration for a reasonable time that should be determined in view of an assessment of the existing economic and financial situation in the state and in the light of the consequences of an extreme situation and the capabilities of the state, including various obligations assumed by the state, which, inter alia, are related to financial discipline, thus, also to the imperative of balancing the revenue and expenditure of the state budget. Society must be presented with concrete criteria upon which the assessment of the economic and financial situation of the state is based, determining the postponement of the establishment or implementation of a mechanism of compensation for the incurred losses. When an extreme situation in the state is over, the legislature must immediately establish a compensation mechanism by means of passing a legal act (law) so that the legitimate expectations of the persons who incurred these losses would be ensured.

  1. In view of what has been stated above, the conclusion should be drawn that the provisions “<...> after this Constitutional Court’s ruling has recognised the legal provisions that laid down the disproportionate extent of the reduction of the remuneration of the persons who are paid for their work with the funds of the state budget or municipal budget as conflicting, inter alia, with the provision ‘[e]ach human being <…> shall have the right <…> to receive fair pay for work’ of Paragraph 1 of Article 48 of the Constitution, the requirement for establishing a mechanism of the compensation for the losses incurred by the persons who are paid for their work with the funds of the state budget or municipal budget stems from Article 23 of the Constitution; such a mechanism means the procedure, according to which the state, within a reasonable time (inter alia, in view of the economic and financial situation of the state and after an assessment of the accumulation (receiving) of the funds required for such compensation) and in a fair manner, to the extent that the incurred losses were disproportionate, will compensate for such losses. Such legal regulation should be established without any unreasonable delay in order to avoid numerous applications to courts lodged by the persons who are paid for their work with the funds of the state budget or municipal budget requesting that the courts award them the remuneration’s unpaid part that came into being after the legal provisions, which have been recognised by this Constitutional Court’s ruling as conflicting with the Constitution, had reduced the coefficients of the positional salaries (remuneration) or the amounts of the additional pay for the qualification class or for qualification category” of Paragraph 2 of Item 2 of Section XIV of the reasoning part of the Constitutional Court’s ruling of 1 July 2013 mean, inter alia, that the legislature, while following the constitutional principle of responsible governance, may postpone the establishment and/or implementation of the mechanism of compensation for the losses incurred due to the disproportionate reduction of remuneration for a reasonable time that should be determined in view of an assessment of the existing economic and financial situation in the state and in the light of the consequences of an extreme situation and the capabilities of the state, including various obligations assumed by the state, which, inter alia, are related to financial discipline, thus, also to the imperative of balancing the revenue and expenditure of the state budget.

III

  1. It has been mentioned that the President of the Supreme Court of Lithuania, the petitioner, also requests the construction of whether the specified provisions of the Constitutional Court’s ruling of 1 July 2013 mean that “the duty of the legislature, derived from the Constitution, to establish the mechanism of the compensation for the losses incurred due to the disproportionate reduction of remuneration, which would fairly compensate, within a reasonable time, such losses by ensuring the proportionate protection of all constitutional values, also mean that the right of the persons who incurred such losses could be implemented in this sphere in a different manner, inter alia, also under judicial procedure, rather than within the time limits and under the procedure of the legal regulation implementing the provisions of the Constitutional Court’s ruling the construction of which is requested”.

Thus, the petitioner requests the construction of whether the persons who incurred losses due to the disproportionate reduction of remuneration may implement their right to compensation for the losses also under judicial procedure as long as the legislator, which has a duty to establish the mechanism of compensation for these incurred losses, has not established any such mechanism.

  1. The provisions of the Constitutional Court’s ruling of 1 July 2013, the construction of which is requested by the petitioner, should be construed in the context of Paragraph 1 of Article 30 of the Constitution which consolidates the right of persons to judicial defence.

2.1. The Constitutional Court has held on more than one occasion that Paragraph 1 of Article 30 of the Constitution consolidates the constitutional principle of judicial defence. Every person who believes that their rights or freedoms have been violated has the right to judicial defence of their constitutional rights and freedoms that have been violated; the defence of violated rights in court is guaranteed to persons regardless of their legal status (inter alia, the Constitutional Court’s rulings of 8 May 2000, 13 May 2010, and 5 July 2013); the violated rights of persons as well as their legitimate interests must be defended in court regardless of whether or not they are directly consolidated in the Constitution (inter alia, the Constitutional Court’s rulings of 8 May 2000, 16 January 2006, and 13 May 2010); the constitutional right of persons to apply to court may not be artificially restricted and the implementation of this right may not be unreasonably burdened (inter alia, the Constitutional Court’s rulings of 13 December 2004, 13 May 2010, and 11 May 2011); otherwise, one would have to state that this constitutional right is a mere declaration (the Constitutional Court’s rulings of 14 February 1994, 22 February 2001, and 16 January 2006).

2.2. If the constitutional right of persons to apply to court were not ensured, the generally recognised legal principle of ubi ius, ibi remedium—if there is a certain right (freedom), there must be a measure for its protection—would also be disregarded; such a legal situation where a certain right or freedom of persons cannot be defended, also by means of the judicial procedure, although the persons themselves believe that this right or freedom has been violated, is, under the Constitution, impossible, nor does the Constitution tolerate this (inter alia, the Constitutional Court’s rulings of 21 January 2008, 15 March 2008, and 13 May 2010).

2.3. The Constitutional Court has held on more than one occasion that the constitutional right to apply to court means that that in a state under the rule of law everyone is given an opportunity to defend their rights in court against unlawful actions of other persons as well as of state institutions and officials. The provision of Paragraph 1 of Article 30 of the Constitution that the person whose constitutional rights or freedoms are violated shall have the right to apply to court consolidates a person’s constitutional right to have an impartial arbiter in the dispute (the Constitutional Court’s rulings of 1 October 1997 and 12 July 2001).

2.4. The Constitutional Court has also held that, by means of a law, the legislature may establish certain means of defending violated rights; however, the legislature may not establish any such legal regulation that would deny the possibility of defending the violated rights and freedoms of a person, or would deny the powers of a court to administer justice (the Constitutional Court’s ruling of 5 July 2013).

  1. In its decision of 7 March 2014, in which, as mentioned before, the provisions of the official constitutional doctrine related to the establishment of the mechanism of compensation for reduced old-age pensions were formulated, the Constitutional Court noted that after the extreme situation in the state is over and after preconditions arise for assessing, according objective data (economic indicators, inter alia, indicators of economic growth, funds accumulated by the state), the respective capabilities of the state, fair compensation for the losses incurred due to the reduction (inter alia, where the reduction resulted from the adoption of the legal provisions later ruled to be in conflict with the Constitution) of old-age pensions must be ensured; under the Constitution, inter alia under the constitutional imperative of social harmony stemming from it, a fair compensation to all persons whose old-age pensions were reduced (inter alia, by means of the provisions of a law that were later ruled to be in conflict with the Constitution) due to an extreme situation (an economic crisis, etc.) in the state for the losses incurred may be ensured as appropriate only by invoking the amounts, terms and other essential elements of compensation for the losses incurred, as established by the legislature.

In the context of this decision, it should be noted that, under the Constitution, inter alia, under the constitutional imperative of social harmony, fair compensation for the losses, incurred by the persons who are paid their remuneration for work from the funds of the state budget or municipal budgets, due to the disproportionate reduction of the remuneration, can only be properly ensured on the grounds of the legislature-established amounts, terms, and other essential elements of the compensation for the incurred losses.

Consequently, the legislature has the duty to establish the compensation mechanism and must assess which of the losses incurred were disproportionate. The legislature’s duty to establish, within a reasonable time, a fair mechanism of compensation for the losses creates a legitimate expectation for the persons who incurred such losses that their losses will be fairly compensated without unreasonable delay.

It should be noted that until the legislature, without violating the requirement of the establishment of the mechanism of compensation for the incurred losses, has not fulfilled its duty yet, it is not clear:

  • as regards the extent of fair compensation of these losses so that the requirement for compensation for the disproportionately reduced amount of remuneration would be met;
  • from when, in what portions, and during how much time in reality (upon the assessment of the economic and financial situation in the state, in view of the consequences of the extreme situation and the capabilities of the state, including various obligations assumed by the state, which, inter alia, are related to financial discipline, thus, also to the imperative of balancing the revenue and expenditure of the state budget) it is possible to compensate for the aforesaid losses.

Therefore, the right of the persons who incurred losses due to the disproportionate reduction of remuneration to compensation for such losses should be implemented through a mechanism established by the legislature, which would ensure fair compensation within a reasonable time.

  1. As mentioned before, every person who believes that their rights or freedoms have been violated has the right to judicial defence of their constitutional rights and freedoms that have been violated; the constitutional right of persons to apply to court may not be artificially restricted and the implementation of this right may not be unreasonably burdened; otherwise, one would have to state that this constitutional right is a mere declaration.

Therefore, in case the legislature unreasonably delays the establishment of the mechanism of compensation for the incurred losses or if an unfair mechanism is established (from the point of view of the terms and amounts of the payment of compensation), the persons who incurred these losses may defend their violated rights under judicial procedure.

  1. In view of what has been stated above, the conclusion should be drawn that the provisions “<...> after this Constitutional Court’s ruling has recognised the legal provisions that laid down the disproportionate extent of the reduction of the remuneration of the persons who are paid for their work with the funds of the state budget or municipal budget as conflicting, inter alia, with the provision ‘[e]ach human being <…> shall have the right <…> to receive fair pay for work’ of Paragraph 1 of Article 48 of the Constitution, the requirement for establishing a mechanism of the compensation for the losses incurred by the persons who are paid for their work with the funds of the state budget or municipal budget stems from Article 23 of the Constitution; such a mechanism means the procedure, according to which the state, within a reasonable time (inter alia, in view of the economic and financial situation of the state and after an assessment of the accumulation (receiving) of the funds required for such compensation) and in a fair manner, to the extent that the incurred losses were disproportionate, will compensate for such losses. Such legal regulation should be established without any unreasonable delay in order to avoid numerous applications to courts lodged by the persons who are paid for their work with the funds of the state budget or municipal budget requesting that the courts award them the remuneration’s unpaid part that came into being after the legal provisions, which have been recognised by this Constitutional Court’s ruling as conflicting with the Constitution, had reduced the coefficients of the positional salaries (remuneration) or the amounts of the additional pay for the qualification class or for qualification category” of Paragraph 2 of Item 2 of Section XIV of the reasoning part of the Constitutional Court’s ruling of 1 July 2013 mean, inter alia, that the right of the persons who incurred losses due to the disproportionate reduction of remuneration to compensation for such losses should be implemented through a mechanism established by the legislature, which would ensure fair compensation within a reasonable time; in case the legislature unreasonably delays the establishment of the mechanism of compensation for the incurred losses or if an unfair mechanism is established (from the point of view of the terms and amounts of the payment of compensation), the persons who incurred these losses may defend their violated rights under judicial procedure.

Conforming to Article 102 of the Constitution of the Republic of Lithuania and Articles 1 and 61 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

decision:

To construe that the provisions “<...> after this Constitutional Court’s ruling has recognised the legal provisions that laid down the disproportionate extent of the reduction of the remuneration of the persons who are paid for their work with the funds of the state budget or municipal budget as conflicting, inter alia, with the provision ‘[e]ach human being <…> shall have the right <…> to receive fair pay for work’ of Paragraph 1 of Article 48 of the Constitution, the requirement for establishing a mechanism of the compensation for the losses incurred by the persons who are paid for their work with the funds of the state budget or municipal budget stems from Article 23 of the Constitution; such a mechanism means the procedure, according to which the state, within a reasonable time (inter alia, in view of the economic and financial situation of the state and after an assessment of the accumulation (receiving) of the funds required for such compensation) and in a fair manner, to the extent that the incurred losses were disproportionate, will compensate for such losses. Such legal regulation should be established without any unreasonable delay in order to avoid numerous applications to courts lodged by the persons who are paid for their work with the funds of the state budget or municipal budget requesting that the courts award them the remuneration’s unpaid part that came into being after the legal provisions, which have been recognised by this Constitutional Court’s ruling as conflicting with the Constitution, had reduced the coefficients of the positional salaries (remuneration) or the amounts of the additional pay for the qualification class or for qualification category” of Paragraph 2 of Item 2 of Section XIV of the reasoning part of the ruling of the Constitutional Court of the Republic of Lithuania of 1 July 2013 (Official Gazette Valstybės žinios, 2013, No. 103-5079) mean, inter alia, that:

  • the legislature, while following the constitutional principle of responsible governance, may postpone the establishment and/or implementation of the mechanism of compensation for the losses incurred due to the disproportionate reduction of remuneration for a reasonable time that should be determined in view of an assessment of the existing economic and financial situation in the state and in the light of the consequences of an extreme situation and the capabilities of the state, inter alia, various obligations assumed by the state, which, inter alia, are related to financial discipline, thus, also to the imperative of balancing the revenue and expenditure of the state budget;

– the right of the persons who incurred losses due to the disproportionate reduction of remuneration to compensation for such losses should be implemented through a mechanism established by the legislature, which would ensure fair compensation within a reasonable time; in case the legislature unreasonably delays the establishment of the mechanism of compensation for the incurred losses or if an unfair mechanism is established (from the point of view of the terms and amounts of the payment of compensation), the persons who incurred these losses may defend their violated rights under judicial procedure.

This decision of the Constitutional Court of the Republic of Lithuania is final and not subject to appeal.

Justices of the Constitutional Court:                          Elvyra Baltutytė

                                                                                              Vytautas Greičius

                                                                                              Danutė Jočienė

                                                                                             Pranas Kuconis

                                                                                             Gediminas Mesonis

                                                                                             Vytas Milius

                                                                                             Egidijus Šileikis

                                                                                             Algirdas Taminskas

                                                                                             Dainius Žalimas