Supreme Court ruling: Employers may make setoffs against damages payable to an employee due to termination of employment by the employee

The resolution of a panel of seven judges of the Supreme Court of Poland dated 17 January 2013 (Case No. II PZP 4/12) allows employers to set off amounts owed to the employer against damages payable to an employee.

According to the court, employers have a right to do so without observing the restrictions in Art. 87 of the Polish Labour Code. In the justification for the resolution, which was published recently, the court distinguished between the notions of “salary” and “damages,” reasoning that due to the specific nature of these claims, damages are not covered by the same statutory protection against setoff as salary.

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