A recent judgment handed down by the Supreme Court on 27 April 2022 under Case Ref. No. 21 Cdo 2061/2021 has rather stirred the stagnant waters of distance contracts in labor-law matters. In my view, the court arrived at a rather propitious conclusion in this judgment.
What was the issue in the case in question?
An employer had terminated their employee for organizational reasons in accordance with Sec. 52 (c) of the Labor Code. The employee did not agree with the termination and insisted on their continued employment, whereupon the parties entered into negotiations over a settlement agreement, the subject of which was the consensual termination of the employment relationship, along with a severance payment in a to-be-agreed amount. The employer sent the offer to contract (i.e., the draft settlement agreement) to the employee by e-mail, in the form of an attachment, furnished with two signatures of the management which was entitled to represent the employer in legal transactions. The employee’s legal representative confirmed to the employer the acceptance and approval by the employee of the offered settlement agreement; he then sent the draft contract, signed by the employee, back to the employer.
It may seem that both parties expressed their will to conclude the settlement agreement. However, the employer did not transfer the severance payment agreed in the agreement to the employee, even after being sent a reminder. The worker was thus forced to take recourse to the courts and file action for payment of the owed severance payment.
The employer defended itself by saying that the settlement agreement had not been concluded legally because the conditions for the delivery of correspondence by the employer to the employee via the Internet or electronic means of communication (within the meaning of Sec. 335 of the Labor Code) had not been fulfilled. In addition, the employer claimed that it never entered into contracts electronically by e-mail, but only in writing.
However, both the first-instance court and the court of appeal held that the settlement agreement had been concluded validly; the case was brought before the Supreme Court to which the employer appealed on a point of law. The Supreme Court allowed the appeal and noted, among other things, that the court decision depended on the assessment of a legal issue that had not been previously resolved in judicial decision-making practice – namely: Whether employees and employers can enter into a legally valid arrangement within the framework of a distance contract even if the legal conditions according to Sec. 334 through 337 of the Labor Code for the delivery of correspondence (containing an offer to contract and its acceptance) have not been met. In its remarks, the Supreme Court pointed out that, among other things, the Labor Code lacks a comprehensive framework governing legal transactions and does not specify the way in which contracts are to be concluded under labor law, which is why the general provisions of the Civil Code must necessarily be used for the conclusion of such contracts. It further noted that the special arrangements for the service of correspondence in employment relations were not essential in assessing the criteria for the establishment of a bilateral legal transaction, because the purpose of this particular regulation in the Labor Code for the service of documents to the employee is to ensure that the document actually comes within the sphere of the employee (reflecting the supreme principle of labor law – the protection of the worker).
The Supreme Court further stated that while the law anticipates that a legal transaction (contained in a piece of correspondence) is null and void if the rules of delivery of said correspondence were violated, this does not mean that the bilateral legal transaction could not have validly occurred in another manner provided for by law. As already mentioned, the general rules of the Civil Code are to be applied to the conclusion of labor-law agreements – in particular the provisions on legal transactions (Sec. 545 et seq.) and on the establishment of obligations (Sec. 1721 et seq.). In this way, the court – quite rightly, in my opinion – assessed the situation such that, where the will to contract of both parties is clear and demonstrable, there is no need to insist on the specific rules of delivery (service of process), especially since they serve primarily to protect the worker anyway.
The Supreme Court’s conclusion that the settlement agreement in question was validly concluded in this case is properly particularly pleasing to those who believe the future is in the remote conclusion of employment contracts, and see this to be a step in the right direction toward increasingly electronic transactions, including in the field of labor law.
Finally, I have to ask (myself, but the lawmaker in particular) whether the time might not be ripe for a revision of the rigid rules of the Labor Code on the service of written documents via the Internet or by e-mail, always respecting, of course, the most important principle of labor law, namely, the protection of workers.
Supreme Court judgment 21 Cdo 2061/2021 of 27 April 2022
Labor Code, as amended