Services / Labour and employment
An employer suing an employee has one year
A claim by an employer against an employee usually follows an internal investigation running to several months — months that already count against the limitation period, and the reason a number of these cases end before their merits are reached.
The basis of the claim and its elements
Section 420 of the Civil and Commercial Code provides that a person who, wilfully or negligently, unlawfully injures another in life, body, health, liberty, property or any right commits a wrongful act and is bound to make compensation. The elements are therefore the actor's state of mind, the unlawfulness of the act, and damage actually caused — all three together.
Working mistakes and wrongful acts
Not every loss arising in the course of work falls within section 420, because wilfulness or negligence and the unlawfulness of the act are still required. A mistaken decision made within the discretion an employee was given is a different thing from conduct meeting those elements. Preparing either side of such a case therefore begins by separating the two on the facts, rather than by the size of the resulting figure.
One year from the day of knowledge
The first paragraph of section 448 provides that a claim for damages arising from a wrongful act is barred one year after the day the injured party knew of the act and knew the person liable to compensate, or ten years from the day the act was committed. The one year therefore starts only when both are present — knowledge of the act and knowledge of who is answerable — which in practice is usually the day an internal investigation identified someone.
The exception where the act is a criminal offence
The second paragraph of section 448 provides that where damages are claimed on a ground which is an offence punishable under the criminal law, and the criminal limitation period is longer than those stated, the longer period applies. This matters greatly where the conduct answers to a criminal description, because it means the one year is not the final answer, and it is why the character of the act has to be considered before concluding that a claim is time-barred.
Where these cases are decided
Read together, the two provisions show that cases of this kind turn on dates and on the character of the conduct rather than on the amount. An employer must be able to show when it knew of the act and of who was responsible, and that it sued within a year of that, or else that the conduct falls within the second paragraph. An employee has two lines running in parallel: contesting the elements under section 420, and checking the dates under section 448.
PREPARE
What to bring
- The internal investigation report, dated at each stage
- When the event became known, and when the person was identified
- The employee's duties and the discretion they were given
- The loss actually suffered, with supporting documents
- Any related disciplinary or criminal proceedings
QUESTIONS
Questions this raises
The internal investigation took months to conclude.
The first paragraph of section 448 ties the starting point to the day the injured party knew of the act and knew who was liable, not to the day the investigation concluded or the day someone authorised proceedings. Time spent on internal process may therefore already count within the year, which is why dating each stage as it happens bears directly on the case.
The employee has already resigned. Can they still be sued?
Section 420 attaches liability to the wrongful act, not to whether the person is still employed, so resigning does not end liability in tort. What changes is practical — access to documents and witnesses — and, more importantly, the period under section 448, which has been running since the day the act and the person responsible became known.
LAW
The legislation
- Civil and Commercial Code, section 420
- Civil and Commercial Code, section 448
ENQUIRIES
