A long-standing labor dispute has recently ended with the ruling of the Supreme Court of Hungary which obliged the former employer to pay damages to the employee who developed a depressive state of anxiety at work. The story gives us an insight into the practice of damages for non-material injury.
The plaintiff had been employed by the defendant since 1 September 1981 for an indefinite period. In 2002, the plaintiff developed a depressive state of anxiety and mood disorder as a result of workplace problems, which remained (in a varying state) until 2015. The defendant terminated the plaintiff’s employment by notice dated 13 January 2003. The notice was given at the time of incapacity for work, which made the termination wrongful in accordance with the then applicable Labor Code.
In the action for unlawful termination of employment and its legal consequences, the plaintiff vindicated a payment of damages for non-material injury of HUF 25 Million. The defendant contended that the action should be dismissed. In its judgment, the court of first instance ordered the defendant to pay the applicant HUF 1,500,000 plus default interest. The court of second instance partially upheld the judgment of the court of first instance and increased the amount of damages to HUF 5,000,000 by obliging the defendant to pay default interest.
In his application for review, the plaintiff asked for the increase of the damages for non-material injury to HUF 25,000,000, claiming that the court of second instance excluded the medical records he had attached as evidence. In their defense, the defendant asked the Hungarian Supreme Court to uphold the final judgment in its effect.
The Hungarian Supreme Court explained that the trial court had examined all the findings in the expert’s report, including the evidence adduced by the applicant. In its application for review, the plaintiff did not specifically state which evidence and the medical expert’s opinion it had attached had not been evaluated by the trial courts and did not state what a different conclusion or decision could it lead the courts to. It further state that the plaintiff unfoundedly claimed that he would be healthy and able to work without the impact of his employer; illnesses of natural origin also played a role in his 71% reduction in capacity for work.
With regard to the amount of damages for non-material injuries, the Supreme Court referred to the decision of the Constitutional Court that explained its function as being able to provide an approximate compensation of the harm suffered by providing a financial contribution which, for the damage sustained, is limited to provide an approximately equivalent but different advantage. The Supreme Court confirmed that the amount of damages for non-material injury was determined by the trial courts taking into account the specific features of the case and the personal circumstances of the injured party.
In accordance with consistent practice, courts award damages for non-material injuries together with default interest. To determine whether the amount of the awarded damage is in line with the above principle of approximate compensation, the default interest to be paid shall also be taken into account.
Finally, the Supreme Court considered that the court of the second instance correctly determined the amount of compensation on the basis of the value ratios at the time the damage arose and therefore upheld the judgment in its effect.