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Compensation for moral damage caused to the employer and the employee
Compensation for moral damage caused to the employer and the employee
One of the issues of interest to the parties in labor relations is the matter of compensation for moral damage caused to the employer and the employee. Can an employer demand compensation from an employee for moral damage inflicted on the employer? Or, conversely, can an employee demand compensation from the employer for moral damage inflicted on the employee? Expert Nusrat Khalilov provides clarification on these questions.
Paragraph 3 of Article 202 of the Labor Code states that the monetary amount of moral damage caused to the employer is determined by the court on the basis of the employer’s application, in accordance with the principle provided for in Part 3 of Article 290 of this Code. It should be noted that the assessment of moral damage is also carried out through judicial proceedings based on an application by the employee or the employer. There is no limitation on the monetary claim for moral damage. If the claimed amount is deemed appropriate by the court, compensation for the moral damage must be paid.
Proving the concept of moral damage is more complex than proving material damage. The word “moral” means “invisible, perceptible through feelings,” while the word “damage” refers to a “negative or adverse result or loss caused by something or an event.” When these meanings are combined, moral damage refers to an invisible but emotionally perceptible negative consequence caused by an action or event.
According to Article 21 of the Civil Code, damage is understood as the expenses incurred or to be incurred by a person whose right has been violated in order to restore that right, the loss or damage of property (actual damage), as well as the income that the person would have received under normal civil circulation conditions if the right had not been violated (lost profit).
Pursuant to Article 290 of the Labor Code, the employer bears material liability for moral damage caused to the employee in the course of labor relations. An employee who claims that moral damage has been inflicted must indicate the amount of the claim in the application. The monetary amount of moral damage caused to the employee is determined by the court, based on the employee’s application, taking into account the degree of social danger of the damage caused, the personalities of the employee and the employer, the factual circumstances of the case, and other objective factors necessary for rendering a fair decision.
It should be noted that Part 3 of the same article defines moral damage caused to an employee as actions committed by the employer or an official subordinate to the employer by any means, including tarnishing or humiliating the employee’s honor and dignity, slander, insult to personality, dissemination of false and untrue information about the employee for the purpose of discrediting them within the collective, as well as other acts and actions contrary to morality, ethical norms, a sense of national pride, or beliefs. As follows from the provision, the court determines the amount of moral damage depending on the specific circumstances of the case (the degree of danger of the harmful act or omission, the nature and severity of the moral suffering and distress experienced by the victim, the victim’s subjective characteristics, etc.).
For more detailed information, reference should be made to the Decision of the Constitutional Court of the Republic of Azerbaijan dated May 31, 2002, on the interpretation of Articles 21 and 23 of the Civil Code of the Republic of Azerbaijan, as well as to Decision No. 7 of the Plenum of the Supreme Court of the Republic of Azerbaijan dated November 3, 2008, on the practice of application by courts of legislation on compensation for moral damage. According to the Decision of the Constitutional Court dated May 31, 2002, the provisions of Article 21 of the Civil Code of the Republic of Azerbaijan provide only for compensation of actual damage and lost profit.
Damage as provided for in Article 23 of the Civil Code is understood as moral damage (physical and moral suffering) and material damage inflicted on a person in connection with the tarnishing of honor, dignity, and business reputation. Compensation for moral damage, as well as the application of other limitations предусмотрed by legislation, must be proportionate to other fundamental rights and freedoms protected by the Constitution of the Republic of Azerbaijan and, in each specific case, depends on the discretion of the court.
Let us refer to Decision No. 7 of the Plenum of the Supreme Court of the Republic of Azerbaijan dated November 3, 2008, on the practice of application by courts of legislation on compensation for moral damage.
According to the Plenum’s Decision, based on Article 41 of the Convention for the Protection of Human Rights and Fundamental Freedoms and the precedents of the European Court of Human Rights, moral damage may be compensated when non-property as well as property damage is caused to a person. The absence of a direct provision in national legislation on the possibility of compensating moral damage in a specific legal relationship is not grounds for rejecting such a claim. From the perspective of the legislation of the Republic of Azerbaijan, the provisions of the Convention for the Protection of Human Rights and Fundamental Freedoms, and the precedents of the European Court of Human Rights, the concept of “moral damage” expresses the moral distress and suffering experienced as a result of the violation of personal non-property rights and freedoms belonging to a person by birth or by law, as well as property rights. Moral distress of a victim means that an unlawful act or omission committed against them causes a certain negative psychological reaction in their consciousness; suffering means the experience of physical pain as a result of impairment of health.
Taking into account the provisions of legislation on compensation for moral damage, moral damage to a person may manifest itself in cases such as loss of close relatives or employment, deprivation of an active social life, disclosure of personal, family, and medical secrets, tarnishing of honor, dignity, and business reputation, temporary restriction or deprivation of other rights, injury to health, and other circumstances. The degree of severity of moral distress and suffering is not grounds for rejecting a claim for compensation for moral damage.
The Plenum explains that, under the legislation of the Republic of Azerbaijan, the right to claim compensation for moral damage belongs only to individuals. The rules governing compensation for moral damage related to the dissemination of information tarnishing the business reputation of individuals also apply to cases involving the dissemination of such information about entrepreneurs.
If a legal entity’s business reputation is infringed as a result of the dissemination of false information about its economic activity or other functions, or through the use of unfair competition methods and means (discrediting of economic activity, imitation, misleading consumers, etc.), such legal entity may claim compensation for material damage caused to it in accordance with Articles 21 and 1097.1 of the Civil Code of the Republic of Azerbaijan.
Causing moral damage to a person may be expressed in any unlawful act or omission of any nature (civil, criminal, administrative, etc. violations) that results in moral distress and suffering. Bringing the person who caused the damage to civil, administrative, or criminal liability for the same act does not exclude the victim’s right to also demand compensation for moral damage.
According to Article 1115 of the Civil Code, damage may be compensated by restitution in kind or by monetary compensation for the damage caused. Courts should take into account that compensation for moral damage is, as a rule, determined and paid in monetary form. In cases provided for in Article 23 of the Civil Code, moral damage may be compensated by imposing certain obligations on the defendant (for example, refutation of false information damaging honor, dignity, and business reputation, or an apology to the injured party). Depending on the specific circumstances of the case, the court may regard the restoration of the violated right as compensation for moral damage.
The Plenum explains that, pursuant to Article 1097 of the Civil Code of the Republic of Azerbaijan, a claim for compensation for moral damage may be satisfied if it is established that the claimant suffered physical and moral distress, that this occurred as a result of the defendant’s unlawful act or omission, that there is a causal link between the unlawful act or omission and the moral damage, and that the fault of the person who caused the damage has been established. When considering claims for compensation for moral damage, the court is obliged not only to determine the grounds for the emergence of civil liability, but also to clarify how the victim’s moral distress and suffering were manifested, under what circumstances and as a result of which act or omission they occurred, the fault of the person who caused the damage, what moral distress and suffering the victim experienced, and how the victim assessed them in monetary or other material form.
When considering cases on compensation for moral damage, along with the general provisions of civil and civil procedural legislation, the provisions established in special legislation, as well as customs and moral norms, should also be taken into account.
One of the issues of interest to the parties in labor relations is the matter of compensation for moral damage caused to the employer and the employee. Can an employer demand compensation from an employee for moral damage inflicted on the employer? Or, conversely, can an employee demand compensation from the employer for moral damage inflicted on the employee? Expert Nusrat Khalilov provides clarification on these questions.
Paragraph 3 of Article 202 of the Labor Code states that the monetary amount of moral damage caused to the employer is determined by the court on the basis of the employer’s application, in accordance with the principle provided for in Part 3 of Article 290 of this Code. It should be noted that the assessment of moral damage is also carried out through judicial proceedings based on an application by the employee or the employer. There is no limitation on the monetary claim for moral damage. If the claimed amount is deemed appropriate by the court, compensation for the moral damage must be paid.
Proving the concept of moral damage is more complex than proving material damage. The word “moral” means “invisible, perceptible through feelings,” while the word “damage” refers to a “negative or adverse result or loss caused by something or an event.” When these meanings are combined, moral damage refers to an invisible but emotionally perceptible negative consequence caused by an action or event.
According to Article 21 of the Civil Code, damage is understood as the expenses incurred or to be incurred by a person whose right has been violated in order to restore that right, the loss or damage of property (actual damage), as well as the income that the person would have received under normal civil circulation conditions if the right had not been violated (lost profit).
Pursuant to Article 290 of the Labor Code, the employer bears material liability for moral damage caused to the employee in the course of labor relations. An employee who claims that moral damage has been inflicted must indicate the amount of the claim in the application. The monetary amount of moral damage caused to the employee is determined by the court, based on the employee’s application, taking into account the degree of social danger of the damage caused, the personalities of the employee and the employer, the factual circumstances of the case, and other objective factors necessary for rendering a fair decision.
It should be noted that Part 3 of the same article defines moral damage caused to an employee as actions committed by the employer or an official subordinate to the employer by any means, including tarnishing or humiliating the employee’s honor and dignity, slander, insult to personality, dissemination of false and untrue information about the employee for the purpose of discrediting them within the collective, as well as other acts and actions contrary to morality, ethical norms, a sense of national pride, or beliefs. As follows from the provision, the court determines the amount of moral damage depending on the specific circumstances of the case (the degree of danger of the harmful act or omission, the nature and severity of the moral suffering and distress experienced by the victim, the victim’s subjective characteristics, etc.).
For more detailed information, reference should be made to the Decision of the Constitutional Court of the Republic of Azerbaijan dated May 31, 2002, on the interpretation of Articles 21 and 23 of the Civil Code of the Republic of Azerbaijan, as well as to Decision No. 7 of the Plenum of the Supreme Court of the Republic of Azerbaijan dated November 3, 2008, on the practice of application by courts of legislation on compensation for moral damage. According to the Decision of the Constitutional Court dated May 31, 2002, the provisions of Article 21 of the Civil Code of the Republic of Azerbaijan provide only for compensation of actual damage and lost profit.
Damage as provided for in Article 23 of the Civil Code is understood as moral damage (physical and moral suffering) and material damage inflicted on a person in connection with the tarnishing of honor, dignity, and business reputation. Compensation for moral damage, as well as the application of other limitations предусмотрed by legislation, must be proportionate to other fundamental rights and freedoms protected by the Constitution of the Republic of Azerbaijan and, in each specific case, depends on the discretion of the court.
Let us refer to Decision No. 7 of the Plenum of the Supreme Court of the Republic of Azerbaijan dated November 3, 2008, on the practice of application by courts of legislation on compensation for moral damage.
According to the Plenum’s Decision, based on Article 41 of the Convention for the Protection of Human Rights and Fundamental Freedoms and the precedents of the European Court of Human Rights, moral damage may be compensated when non-property as well as property damage is caused to a person. The absence of a direct provision in national legislation on the possibility of compensating moral damage in a specific legal relationship is not grounds for rejecting such a claim. From the perspective of the legislation of the Republic of Azerbaijan, the provisions of the Convention for the Protection of Human Rights and Fundamental Freedoms, and the precedents of the European Court of Human Rights, the concept of “moral damage” expresses the moral distress and suffering experienced as a result of the violation of personal non-property rights and freedoms belonging to a person by birth or by law, as well as property rights. Moral distress of a victim means that an unlawful act or omission committed against them causes a certain negative psychological reaction in their consciousness; suffering means the experience of physical pain as a result of impairment of health.
Taking into account the provisions of legislation on compensation for moral damage, moral damage to a person may manifest itself in cases such as loss of close relatives or employment, deprivation of an active social life, disclosure of personal, family, and medical secrets, tarnishing of honor, dignity, and business reputation, temporary restriction or deprivation of other rights, injury to health, and other circumstances. The degree of severity of moral distress and suffering is not grounds for rejecting a claim for compensation for moral damage.
The Plenum explains that, under the legislation of the Republic of Azerbaijan, the right to claim compensation for moral damage belongs only to individuals. The rules governing compensation for moral damage related to the dissemination of information tarnishing the business reputation of individuals also apply to cases involving the dissemination of such information about entrepreneurs.
If a legal entity’s business reputation is infringed as a result of the dissemination of false information about its economic activity or other functions, or through the use of unfair competition methods and means (discrediting of economic activity, imitation, misleading consumers, etc.), such legal entity may claim compensation for material damage caused to it in accordance with Articles 21 and 1097.1 of the Civil Code of the Republic of Azerbaijan.
Causing moral damage to a person may be expressed in any unlawful act or omission of any nature (civil, criminal, administrative, etc. violations) that results in moral distress and suffering. Bringing the person who caused the damage to civil, administrative, or criminal liability for the same act does not exclude the victim’s right to also demand compensation for moral damage.
According to Article 1115 of the Civil Code, damage may be compensated by restitution in kind or by monetary compensation for the damage caused. Courts should take into account that compensation for moral damage is, as a rule, determined and paid in monetary form. In cases provided for in Article 23 of the Civil Code, moral damage may be compensated by imposing certain obligations on the defendant (for example, refutation of false information damaging honor, dignity, and business reputation, or an apology to the injured party). Depending on the specific circumstances of the case, the court may regard the restoration of the violated right as compensation for moral damage.
The Plenum explains that, pursuant to Article 1097 of the Civil Code of the Republic of Azerbaijan, a claim for compensation for moral damage may be satisfied if it is established that the claimant suffered physical and moral distress, that this occurred as a result of the defendant’s unlawful act or omission, that there is a causal link between the unlawful act or omission and the moral damage, and that the fault of the person who caused the damage has been established. When considering claims for compensation for moral damage, the court is obliged not only to determine the grounds for the emergence of civil liability, but also to clarify how the victim’s moral distress and suffering were manifested, under what circumstances and as a result of which act or omission they occurred, the fault of the person who caused the damage, what moral distress and suffering the victim experienced, and how the victim assessed them in monetary or other material form.
When considering cases on compensation for moral damage, along with the general provisions of civil and civil procedural legislation, the provisions established in special legislation, as well as customs and moral norms, should also be taken into account.