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Proprietary Liability Agreement

Viimati uuendatud: 23.02.2017

Several employers firmly stick to old, outdated regulations and, taking advantage of the new employee’s ignorance, conclude a collective proprietary liability agreement. This agreement deviates from the general principle of the law of obligations as the ECA § 72 states that an employee’s liability emerges if the employee has infringed an obligation in their contract of employment. Being jointly responsible for something vague does not enable determination of who infringed their work obligations. For example, warehouse keepers are not solely responsible for stock defi ciencies if customers and owners also have access to the warehouse.

According to the LOA, everyone is only responsible for their own infringements. If the employer certifies a causal relationship between the employee’s infringement and the resulting property damage, they have a right to demand remuneration. But the ECA § 75 provides the employer with the possibility to conclude only a property liability agreement with the employee to guarantee that the property provided to the employee for fulfilling their work tasks remains unharmed.

A property liability agreement is only valid if:

  • It has been concluded in writing;
  • It is limited by space, time and objects, in a reasonable way that is understandable to the employee;
  • Only the employee or a determined number of employees have access to property provided to the employee;
  • The upper monetary liability level has been agreed upon;
  • The employer pays reasonable remuneration to the employee, taking into account the monetary liability level.

If an agreement has been concluded that corresponds to the listed conditions, the employee’s guilt is irrelevant when compensating for the damage. The employee is freed from the liability if they can prove their innocence. It should also be remembered that the monetary upper limit and remuneration paid to the employee must be reasonably balanced. In the case of an agreement that is clearly out of proportion, the employee has a right to determine decreasing the compensation amount.


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