Privacy Policy

Cookie Notice

Legal

Lets work together

Križanec & Partners

Address

Contact

Sophisticated knowledge for rapidly emerging markets

All services

All posts

All experts

Legal Services

Experts

Insights

Careers

About

Areas of Practice

Employment Law

Dispute Resolution

In case ref. <a href="https://www.us-rs.si/odlocba-ustavnega-sodisca-st-up-1514-22-z-dne-18-4-2024/">Up-1514/22</a> of 18 April 2024, the Constitutional Court adopted an important decision in the field of <a href="https://www.krizanecpartners.com/en/cat/employment-law">employment law</a>, as it assessed the liability for damages of a formal employer who, in accordance with the employment contract, had sent an employee to work abroad. On that issue, the Constitutional Court took the view that the formal employer in such a case could not be relieved of its liability for damages on the grounds that it was not present at the work site, did not supervise the work on the construction site and did not otherwise have direct control over the worker&#039;s work.This judgment will have an important impact on <a href="https://www.krizanecpartners.com/en/cat/dispute-resolution">dispute resolution</a> between workers and employers in cases of accidents at work abroad. Workers will now have easier access to their rights. For further information and legal advice on employer&#039;s liability and other labour law issues, please contact <a href="https://www.krizanecpartners.com/en/cat/dispute-resolution">Križanec &amp; Partners Law firm in Slovenia</a>.<h2>Secondment abroad</h2>Posting an employee abroad under <a href="https://pisrs.si/pregledPredpisa?id=ZAKO5944">Article 208 of the Labour Relations Act</a> (ZDR-1) means that the employer temporarily sends the employee to work outside Slovenia, if this is agreed in the employment contract. An employee has the right to refuse to be posted abroad if there are legitimate reasons for doing so, such as pregnancy, care of a child under a certain age, disability, health reasons or other reasons laid down in the employment contract or collective agreement.If the employment contract does not provide for the possibility of working abroad, a new employment contract must be concluded in the event of secondment for duration of the project or the work abroad. When the work abroad ends, the employer must ensure the employee&#039;s return to Slovenia. The contract of employment for work abroad must contain provisions on the duration of the work abroad, public holidays, minimum annual leave, remuneration for the work, additional insurance for health services abroad, other benefits and the conditions for returning to Slovenia.<h2>Employers&#039; liability for an accident at work abroad</h2>Decision of the lower courtsIn the present case, the Court of First Instance, in the fourth trial, dismissed the claim of a worker who had been posted to Turkey for compensation for an accident at work, concluding that the worker must reimburse the formal employer for the costs of the proceedings, as the formal employer did not organise the work at the construction site abroad. The Court of Second Instance upheld the employee&#039;s appeal in part and reduced the costs awarded, but dismissed the remainder and upheld the judgment of the Court of First Instance. The Supreme Court dismissed the application for leave to review.Right to a safe and healthy working environmentThe Constitutional Court reconsidered the opinion of the lower courts primarily in the context of the right to protection of labour under Article 66 of the <a href="https://nasodiscu.si/ustava-republike-slovenije">Constitution</a>, which obliges the state to ensure a safe and healthy working environment. The legislator fulfilled this obligation in Article 43 of the ZDR-1 and further specified it in the <a href="https://pisrs.si/pregledPredpisa?id=ZAKO5537">Act on Safety and Health at Work</a> (ZVZD-1). According to this legislation, the provision of a safe working environment is a fundamental obligation of the employer. In this respect, the employer cannot relieve itself of this obligation by delegating professional tasks to an expert or an external service. It is the employer who is responsible for the choice of measures, organisation and provision of material resources. In order to ensure a safe and healthy working environment, the legislator has also provided that the employer is liable in damages for harm caused to the worker at work or in connection with work, including accidents at work.The Constitutional Court&#039;s assessmentIn the present case, the lower courts interpreted the concept of employer as a formal employer with whom the worker has a contract and, more broadly, as a de facto employer who directly organises the work and ensures safety in the performance of work. According to the reasoning of the lower courts, only the actual employer who organises the work on the construction site, has direct control over the work of the worker by giving him instructions for safe work on the site and by warning him of the dangers before starting work, can be held liable for an accident at work abroad. The Constitutional Court found that such an interpretation exempts the formal employer from responsibility for ensuring safe work, which is contrary to the provisions of ZDR-1 and ZVZD-1 and the constitutional requirement to ensure a safe working environment under Article 66 of the Constitution. Such an interpretation allows the formal employer to avoid responsibility even though the worker has an employment contract with the formal employer.Accordingly, the Constitutional Court has taken the view that a formal employer must fulfil its obligations with regard to the safety and health of workers, regardless of its physical presence at the workplace. Since in the present case the lower courts violated the worker&#039;s right under Article 66 of the Constitution, the Constitutional Court annulled the contested judgments and referred the case back to the lower courts for reconsideration.<h2>More information and legal advice</h2>Križanec &amp; Partners Law Firm in Slovenia has extensive experience in the field of employment law. Our lawyers provide expert advice and legal representation to employers and employees in all employment law proceedings. For further information and legal advice on employers&#039; liability and other employment law issues, please contact our employment law experts, Attorney at law <a href="https://www.krizanecpartners.com/en/strokovnjaki/dinar-rahmatullin">Dinar Rahmatullin</a> and Attorney at law <a href="https://www.krizanecpartners.com/en/experts/janja-koncan">Janja Končan</a>. We also invite you to read on our <a href="https://www.krizanecpartners.com/en">website</a> the key changes introduced by the latest <a href="https://www.krizanecpartners.com/en/insights/important-changes-to-ordinary-termination-for-reasons-of-misconduct">amendment to the ZDR-1</a>, including important changes to <a href="https://www.krizanecpartners.com/en/insights/important-changes-to-ordinary-termination-for-reasons-of-misconduct">ordinary termination of an employment contract for reasons of misconduct</a>.

In case ref. no. Up-1514/22, the Constitutional Court ruled that the formal employer is liable for the damage suffered by the posted worker while working at a workplace abroad.

The formal employer is liable for damage suffered by the posted worker while working abroad

Banking and Finance

Consumer Law

The Higher Court in Ljubljana, in case reference no. II Cp 138/2024 dated 27th February 2024 (the &quot;Judgment&quot;), has taken a stance regarding the conditions for issuing a temporary (regulatory) injunction in the case of a lawsuit to establish the nullity of a loan agreement in Swiss francs (CHF), namely in connection with a moratorium on loan installment payments. The condensed conditions for issuing a regulatory interim injunction in the specific case are as follows: <ol><li>the creditor sufficiently demonstrates indications of unfairness in the contractual terms of the loan agreement in Swiss francs (CHF);</li><li>the creditor demonstrates either (i) a worsening of their financial position and thus the occurrence of difficult-to-remedy damage they would suffer if they continued paying loan installments, or (ii) that the debtor (i.e., the bank) would not suffer more severe adverse consequences from the issuance of the interim injunction than the creditor would have suffered without the interim measure, if it were to prove unfounded in the course of the proceedings.</li><li>reversibility, meaning that in the event of rejection of the debtor&#039;s (i.e., the bank&#039;s) lawsuit, it is possible to restore the previous state.</li></ol> We invite you to continue reading for a detailed analysis of the content of the Judgment. The subject of decision in this particular case was a ruling on the issuance of an interim injunction, by which the court temporarily suspended the effects of two loan agreements until the final resolution of the dispute (a so-called moratorium on repayment of loan installments). Although the appellate court granted the bank&#039;s appeal, annulled the contested part of the order, and referred the case to the court of first instance for reconsideration due to insufficient and incomplete assessment. However, regardless of the aforementioned, the appellate court, as will be explained further, upheld the reasons for issuing the interim injunction in the specific case. For a comprehensive understanding of the Judgment, it is necessary to first clarify the conditions that must be met for the issuance of the interim injunction under consideration. In accordance with the provisions of Article 272 of the Enforcement and Security Act (the &quot;ZIZ&quot;), the court may issue an interim injunction to secure a non-monetary claim if the creditor demonstrates that it is likely that the claim exists or will arise against the debtor. In doing so, the creditor must also demonstrate one of the assumptions of the second paragraph of Article 272 of the ZIZ, namely (a) the danger that the enforcement of the claim will be impossible or significantly hindered, (b) that the injunction is necessary to prevent the use of force or the occurrence of irreparable harm; (c) that the debtor, if the interim injunction were to prove unfounded during the proceedings, would not suffer more severe adverse consequences than those that would occur to the creditor without the issuance of the interim injunction. The creditor is not obliged to prove danger if it is likely that the debtor would suffer only minor damage with the proposed injunction. On the other hand, according to the case law of the Constitutional Court, an additional condition of reversibility must also be demonstrated in the case of a regulatory interim injunction, i.e., the condition that in the event of rejection of the claim, it is possible to restore the previous state for the debtor. In the discussed Judgment, the Higher Court in Ljubljana, among other things, specifically addressed the condition of the likelihood of the existence of the claimed claim and other conditions under the second paragraph of Article 272 of the Enforcement and Security Act (ZIZ) in connection with Article 7 of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (the &quot;Directive&quot;) and the judgment of the European Court of Justice, case no. C-287/22 of 15 June 2023 (the &quot;Judgment C-287/22&quot;). The Higher Court in Ljubljana, through the discussed Judgment, affirmed the position of the court of first instance that the relevant legal basis for the issuance of interim measures in proceedings concerning unfair consumer contracts is the Directive, where it is also necessary to consider Judgment C-287/22 as a mandatory legal source for the interpretation of the said directive regarding the issuance of interim injunctions. In accordance with Judgment C-287/22, national courts must have sufficient indicators of the unfairness of contractual terms (i.e., the likelihood that the loan agreement is null and void) when issuing interim injunctions. On the other hand, national courts must also determine whether the moratorium in favor of the consumer for the duration of the proceedings is necessary to restore the actual and legal position in which the consumer would be if not bound by the (unfair) currency clause. In doing so, the court must also consider the financial position of the consumer and the risk that the consumer may have to repay an amount to the bank exceeding the principal amount of the loan. As essential for the probable existence of the claim, i.e., whether the disputed loan agreements are void, the court in the Judgment emphasized the determination of whether the bank adequately explained to the borrowers the long-term economic burden they assumed by entering into the contracts. Inadequate and insufficient explanatory obligations on the one hand indicate the bank&#039;s bad faith, and on the other hand, they indicate such an informational gap between the contracting parties that borrowers, due to insufficient information at the time of contract formation, did not have the opportunity to make informed and reasonable decisions, even though the burden of their decisions may have only become apparent in the period (of several years) after the conclusion of the contracts. The content of the explanatory obligation must be such that an average consumer can understand the specific operation of the contractual term (i.e., the currency clause) and can assess, based on the information received, the potential economic consequences of such a term for their financial obligations and the real extent of the risk assumed. In Judgement the Higher Court in Ljubljana emphasized that Judgment C-287/22 does not constitute an automatic direct basis for the issuance of an interim injunction. Therefore, it is always necessary to assess the specific factual situation in each case in light of the relevant provisions of the Enforcement and Security Act (ZIZ), always considering the positions taken in Judgment C-287/22. Additionally, in the discussed Judgment the court highlighted that the temporary regulation under consideration, which proposes a moratorium on loan installment payments, constitutes a regulatory interim injunction, thereby necessitating a restrictive approach to the fulfillment of the conditions for the issuance of such an injunction. Regarding the weighing of conditions from the second paragraph of Article 272 of the Enforcement and Security Act (ZIZ), the Higher Court in Ljubljana highlighted that borrowers can demonstrate a deterioration in their financial situation and thus the occurrence of irreparable harm they would suffer if they continued to repay loan installments (the second clause of the second paragraph of Article 272 of the ZIZ). However, in any case, the court is also obliged to conduct a balancing act according to the third clause of the second paragraph of Article 272 of the ZIZ regarding the harmful consequences on both sides, taking into account not only the financial situation of the borrowers, the monthly burden of repaying loan installments, and the fact that the principal has already been repaid but also the fact that the bank is a financial institution with its claims secured by mortgages on the loan agreements. In relation to the condition of reversibility, the Higher Court concluded that such condition is fulfilled in the case where the bank has established a mortgage as security for the loan. In this situation, it is not possible to argue that the bank would be unable to recover its claims in the event that the borrowers were unsuccessful in their lawsuit. The established mortgage enables the bank to restore the previous state in the event of rejection of the lawsuit by the borrowers. If you have any additional questions regarding the process of issuing interim injunctions or the moratorium on loan repayments, we kindly invite you to email Law firm Križanec &amp; Partners in Slovenia at <a href="mailto:info@krizanecpartners.com">info@krizanecpartners.com</a>. We&#039;ll be happy to assist you further.

In case No II Cp 138/2024, the Higher Court in Ljubljana examined an appeal by a bank against an order granting a temporary injunction, by which the court suspended the effect of two loan agreements until the dispute had been finally resolved.

New judicial practice favors the issuance of interim injunctions in proceedings concerning the nullity of loans in Swiss francs (CHF)

T: +386 59 097 400

Fax: +386 59 097 410

info@krizanecpartners.com

Facebook

LinkedIn

Specializing in Corporate Law, Data Protection, Public Procurement, Insolvency Law and Restructuring, and Environmental Law, Janja delivers strategic solutions to clients involved in various transactions. Her expertise spans a variety of industry sectors, with a focus on Banking and Finance, Retail, Media and Insurance.Janja is a post-graduate of the University of Ljubljana, Faculty of Law, and the University of Groningen Faculty of Law, the Netherlands, where she earned LL.M.Janja is fluent in Slovene and English.