On 11.02.2025, a panel of the Civil Division of the Supreme Court of Cassation ("SCC") adopted a decision of significance for the development of the law, answering the following question - what is the significance of good faith/bad faith and of intent as a form of fault within the meaning of the Labour Code ("LC") in the performance of an employer's employment duties. The practical value of the decision for employers relates to the fact that the employee's rights would again prevail, regardless of the employer's course of action (whether in good faith or not), in the event that the employer is in formal breach of its obligations under the LC, as a result of which the employee has been prejudiced or has been unable to enjoy his rights.

In the judgment, the SCC, first of all, clarifies the concept of "good faith", determining that good faith is a general principle in civil law and reflects the sincere, honest, good and accurate intentions of every person, regardless of the result of his subsequent actions. Conversely, bad faith represents dishonesty, insincerity, dishonesty in one's acts, disregard for the rules of morality. The LC requires parties to any employment relationship to exercise their rights and perform their duties in good faith and in accordance with the law, and there is a presumption that, until the contrary is proved, this requirement is met.

The basis for the SCC decision was the case of a former employee who did not receive 15 salaries upon retirement as provided for in the collective labour agreement ("CLA") in effect at the time. The district and appellate courts dismissed the wage claim on the ground that the employee had not joined the most recent CLA. At the same time, the courts found that the employer had failed to comply with its obligation under the LC to inform all employees of the CLAs concluded at the company, but it was not established beyond reasonable doubt that this failure was due to bad faith or wilful conduct on the part of the employer.

The SCC concludes that the employer's bad faith in failing to perform its employment obligations is not a condition relevant to employment relations and, where an employer's failure to perform is established, whether the employer acted in good faith would only be legally relevant in settling employment disputes and their consequences if the law so provides. Where the law does not expressly provide for (lack of) good faith as well as intent as grounds for imposing liability on the defaulting party, they are legally irrelevant in assessing the legal consequences of the default. In the present case, the SCC concludes that the employer's failure to notify the employees of the CLA, whether in good faith or bad faith, cannot have adverse legal consequences for the employee and he should enjoy the rights under the CLA.

The decision of the SCC is of significant importance for the development of the law in relation to the resolution of disputes between parties to employment relationships and ensures the application of the principle of