Employers often, particularly nowadays, find them selves in situations that their employees have caused them damages. Same employers can testify about various experiences and circumstances involving employees causing such a damage, for example, frequent coming to work later then they should, frequent leaving the work earlier, damaging or destruction of employer's assets (equipment, vehicles, job instruments etc.), and even (rarely) theft. 

Law on Employment protects employer when employee causes such a damage during the work or in connection to work, prescribing that the employee is obligated to compensate the employer for the damage. Should the damage be caused by more then one employee, each of them is liable to the employer for part of damage caused by that particular employee, or they can be treated as equally liable (when it is not possible to determine which employee caused which part of the damage). Also, the Law prescribes that if the employer compensates the third person with the damage, then the employee is obligated to pay this amount to the employer (recourse liability of employee).

In these situations the employer must be protect, and the best protection is always (proved to be) prevention.

Each employer's best interest is to predict the amount of the damage for certain detrimental actions of the employee. This possibility is prescribed by the Law on Employment stating that possible detrimental actions of the employee and the amount of damage caused by employee to the employer, can be regulated by collective agreement or work regulation.

For this reason in particular, it is advisable for every employer, even the one employing less then 20 employees and has no legal obligation of this kind, to make work regulation which it would predict detrimental actions connected with employee's liability, as well as the amount of damage compensation to be paid by employee to the employer, should the damage occur. At the same time, using the work regulation employer can regulate number of other matters which are not usually regulated by the employment contract, such as work organization, procedure and measures for protection of employees' dignity, measures serving as protection from discrimination etc. The said way of predicting and regulating damages, shall serve to ease the employer to recover damages if the damage is incurred, and here are the reasons why:

If the employee causes damage to the employer, liability of the employee exists only if this damage is caused on purpose or with terminal disregard (culpa lata), and not in all cases. Situations when employee is liable for damages are no all cases when the damages is caused by employee. Hence, if the actions of the employee are actions taken on purpose or with culpa lata – without regard usually taken by every average person, then liability exists.

Problems often arise because the employer has burden of proving that the employee is liable for damages, as it acted on purpose or with culpa lata, because employee will not be liable should this disregard is usual one (culpa levis).

As you probably already conclude, practice often makes it very difficult to prove that one has acted on purpose or with terminal disregard, and in order to avoid these situations and facing the problem of proving (in a court procedure which is often long-lasting and connected with additional costs), we hold that making work regulation that would regulate forms of damages and amounts of damages compensations, should the damage occur, would be to the employer's great benefit. 

Question connected therewith and a question which is often being posed is whether employer is entitled to withhold certain amount from employee's salary equal to the amount of the damages suffered by employer due to employee's actions.

There are often situations in which employers act in such way, considering that it is legitimate to recover the damage caused by employee from that employee's salary. This standpoint is reasonable and logical, from employer's perspective, however, each employer has to bear in mind that withhold of salary without consent of the employee, is not allowed and not legally grounded.

Hence, even when employer predicts forms of damages and amounts of damages, using the work regulations, and when the damage occurs, this does not mean that employer is entitled to withhold this amount from employee's salary. In order for this to be possible, employee has to give written approval for withhold, and in order for this approval to be valid, it cannot be given in advance, for some future damages for which there is no certainty that they will actually arise, but only when the employer's claim already exists.

To put this into perspective, when employer has certain monetary claim towards the employee (which does not have to be damage compensation, but every other claim), and intends to recover payment by withholding part of employee's salary, the employee must give written approval allowing the claim to be recovered by withholding part of salary, when the claim already exists.

Every actions different from the aforementioned (for example when the employer, upon its sole discretion, withholds certain part of employer's salary, or when employer gives approval for withhold in advance) shall be considered not valid, and possible basis for court procedure in which the employer will have position or respondent.

You already guess, the outcome of this court procedure is usually order to employer to pay the amount concerned to the employee, with interest starting from the day when withhold was executed, and of course, to pay the employee procedural costs.

You will surely agree that the court procedure is not recommended, especially when it can be avoided by using the aforementioned procedure of making the work regulation and obtaining written consent of the employer.

Law Office Ana Blečić Jelenović, mag.iur. & Anela Troskot, mag.iur.

February, 2012