Accumulation of Functions in Light of Recent Constitutional Finding – May Execs Be Employed?

21. 10. 2016

Until recently, the Supreme Court held the opinion that a member of a statutory body may not perform the duties connected with the post in a status of an employee since this sort of activity is not categorised as a type of employment; therefore, a related contract of employment is deemed invalid. It is not, however, for a statutory body member to be employed to perform activities different from those performed by the statutory body.

The Constitutional Court, on the other hand, has recently ruled (as expressed in ruling connected with a heard case no. I US 190/15 of 13 Sep, 2016), that there is no valid reasoning underlying the logic behind the fact that a member of a statutory body should not perform their activities (or a part of these) based on a contract, which is in perfect agreement with the Labour Code. Should general courts tend to maintain the current legal stance, it is absolutely necessary to justify it sufficiently and conclusively to such an extent that the law is predictable.

The Constitutional Court mainly refers to the rules of the contracting parties autonomy, the ‘pacta sunt servanda’ (agreements must be kept) principle and the priority of legal actions exegesis, which is a basis for its validity (and not the contrary), and all these in accordance with the basic principle of a legal state that every person is entitled to commit acts that are not in disagreement with the law and any action contradicting this law needs to be adequate and justified.

By stating that the case is an example of the rights for a fair trial and legitimate justification of judicial decisions and the pacta sunt servanda principle having been breached, The Constitutional Court based their decision on the fact that accumulation of posts is not specifically prohibited by any law and the ban has been postulated judicially by general courts and ruled in favour of the complainant and, in doing so, deviated from the aforementioned practice of the Supreme Court.

The finding of the Constitutional Court may lead to a crucial turn in the approach towards accumulation of functions of a member of the statutory body of a corporation and its employee. At this point, it is hardly possible to predict whether the stance is to be adopted (or to what extent the accumulation of functions will be permitted) by general courts, which, in fact, hear and solve the cases, since the Constitutional Court has not ruled whether the Labour law and the Corporate Business law are not in contradiction in certain points, e.g. in the matter of responsibility of employees/body members.  

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