4.03.2021 Labour law

Employee’s liability for damage to employer’s property

Almost every employee in his/ her everyday work uses property ensured by the employer – computer hardware used in the office or when working remotely, machines necessary for work or the entire workplace equipment. What are the possible consequences of actions of an employee who causes damage to employer’s property?

Employer’s property protection is one of the basic employee duties, so its lack gives the employer the possibility to take appropriate steps in order to hold the employee accountable for the consequences of his/her actions. On the grounds of the provisions of the Labour Code the employer may draw various consequences towards the employee and their kind depends, inter alia, on the intention of causing damage (or its lack), as well as on whether or not property was entrusted to the employee with an obligation of its return or accounting for any charges incurred on it.

See also: How employers should prepare to protect whistleblowers

Liability of employees for damage – major categories

  • Employees’ liability for maintenance of order

Employee’s failure to comply with the established organisation and order in the working process, occupational safety and health regulations and fire protection regulations may result in the employer taking a disciplinary action, i.e. imposing the penalty of admonition and the penalty of reprimand. Having discovered a breach and having heard the employee, the employer informs the employee in writing about the imposed penalty. In the notification the employer also indicates the type and date of the breach of employee duties and informs the employee about the right to file an objection and the deadline for its filing.

A copy of the notification is included in the personnel file of the employee, from which it is removed after one year of faultless work (this may be done earlier at the request of the employer or the trade union organisation representing the employee). After the copy of the notification has been removed from the personnel file, the penalty is considered to have not been imposed. One has to remember that the disciplinary action may be taken only within 2 weeks of getting to know about a breach of an employee duty and within 3 months of employee’s commission of the breach.

  • Financial liability of employees

In some situations, an employee may be obliged to pay a compensation due to damage caused.  This is the case when damage is caused as a result of non-performance or improper performance of employee duties attributable to the employee. The employee bears liability for damage within the limits of the actual loss suffered by the employer and only for normal consequences of an action or omission resulting in damage. He/she cannot be held accountable for damage to the extent to which the employer or any other person contributed to its emergence or aggravation.

The amount of the compensation depends on the intention of causing damage – it will be different for an employee who wanted to damage employer’s property or anticipated the consequence of his/her action in the form of damage, but did not interrupt it, while certain limitations have been introduced with respect to an employee who acted negligently (i.e., anticipated the possibility of occurrence of a harmful consequence, but groundlessly assumed that he/she would be able to avoid it, or did not anticipate the possibility of occurrence of such consequences, though he/she could and should have anticipated them):

  • An employee who caused damage intentionally is obliged to remedy it in the full amount
  • An employee who caused damage due to his/her negligence will pay a compensation in the amount of caused damage, but it cannot exceed the amount of the three-month salary applicable to the employee on the date of causing damage.

The employer is the party obliged to prove the circumstances which justify employee’s liability.

  • Financial liability for property entrusted to the employee

An employee who has been given property with an obligation of its return or accounting for any charges incurred on it is obliged to remedy damage in the full amount, regardless of whether or not damage was attributable to him/her. The employee may avoid being held liable, if he/she proves that damage was caused for reasons beyond his/her control, especially if the employer failed to provide appropriate conditions ensuring property security.

  • Termination of the employment contract without notice due to employee’s fault

A gross breach of basic employee duties may result in employer’s termination of the employee’s contract of employment without notice. Causing damage to employer’s property may constitute a gross breach of the obligation of care for property and, consequently, may lead to the employer unilaterally deciding on termination of the employment contract concluded with the employee.

Each type of the employment contract may be terminated in this way, also during employee’s excused absence from work. The employer may terminate the employment contract without notice despite not having previously applied more lenient measures (e.g., disciplinary action) and, additionally, is not obliged to previously hear the employee and inform him/her about the intention of such contract termination.


Zofia Kurluta
Trainee Attorney-at-law

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