RASK Successfully Represented MKM Infra in a Dispute Concerning Employee Liability for Damages and the Invalidity of an Extraordinary Termination of Employment
Case
RASK attorney-at-law Keidi Kõiv successfully represented MKM Infra OÜ in an employment dispute involving an employee who had negligently caused an accident while driving a company vehicle, resulting in financial loss to the employer. The employer sought compensation from the employee for the insurance deductible. However, the employee considered the employer’s decision disrespectful and terminated the employment contract extraordinarily, alleging a material breach by the employer. MKM Infra challenged the termination before the Labour Dispute Committee.
The Labour Dispute Committee upheld MKM Infra OÜ’s claim in full, ordering the employee to compensate the employer for the amount of the insurance deductible and declaring the employee’s extraordinary termination of the employment contract null and void.
The case is particularly significant because claims against employees for damage caused in the course of their employment are relatively uncommon, leaving employers with limited guidance on what constitutes a proportionate claim. The decision reaffirmed an important principle: where an employee has breached their duty of care and the employer has taken all reasonable steps to minimise the loss, such as obtaining liability insurance and initiating the insurance claims process, seeking reimbursement of the insurance deductible from the employee may be justified and proportionate.
The decision also confirmed that an employee cannot validly terminate their employment contract on the grounds of a material breach by the employer merely because the employer has made such a compensation claim.
The Labour Dispute Committee upheld MKM Infra OÜ’s claim in full, ordering the employee to compensate the employer for the amount of the insurance deductible and declaring the employee’s extraordinary termination of the employment contract null and void.
The case is particularly significant because claims against employees for damage caused in the course of their employment are relatively uncommon, leaving employers with limited guidance on what constitutes a proportionate claim. The decision reaffirmed an important principle: where an employee has breached their duty of care and the employer has taken all reasonable steps to minimise the loss, such as obtaining liability insurance and initiating the insurance claims process, seeking reimbursement of the insurance deductible from the employee may be justified and proportionate.
The decision also confirmed that an employee cannot validly terminate their employment contract on the grounds of a material breach by the employer merely because the employer has made such a compensation claim.