Employers and the burden of proof: when can you claim back unpaid wages?
Author of the article: JUDr. Barbora Kořenářová, ARROWS law firm (office@arws.cz, +420 245 007 740)
In a recent decision of 10 December 2024, No. 21 Cdo 1993/2024-631, the Supreme Court dealt with a dispute between an employer and an employee over the recovery of unjust enrichment. The key factor for success is the correct understanding and application of the burden of proof. What obligations does the employer have and how can it effectively protect its interests?
Unjust enrichment in employment relationships
Unjust enrichment in the employment context occurs most often when an employer mistakenly pays an employee wages or other monetary benefits to which the employee was not entitled. This may be, for example, the erroneous payment of a bonus or payment for work that was not performed. To remedy this situation, substantive legislation is essential, in particular Section 331 of the Labour Code, which specifies that the burden of proof lies with the employer.
For example, if an employee has been paid for work that he or she did not actually perform, the employer must prove not only that the payment was made, but also the reasons why it was wrongly paid. This applies even if it is a so-called negative allegation - that is, that the employee did not do something. The case law and literature have abandoned the outdated view that negative allegations are generally not provable in civil court proceedings and instead assumes that negative facts can be proved using circumstantial evidence such as attendance sheets, witness statements or records from internal systems. Such evidence often serves as a supporting tool to prove the employer's allegations.
How to deal with the burden of proof
Employers are faced with the challenge of proving that the work was not done and therefore the wages should not have been paid. This is where circumstantial evidence comes in and the following steps can be crucial for employers:
- Collecting evidence: the employer should have good quality and up-to-date documentation such as attendance records, timesheets and internal procedural guidelines.
- Proving error: If the payment of wages was due to a clerical error, for example, the employer must show how the error occurred and why the payment was not justified. It should also be able to prove that the wrongful payment of wages was not caused by an obstacle on the employer's side (Art. 208 of the Labour Code).
- Preparing for trial: trial strategy, including testimony from colleagues or supervisors, can be crucial.
Practical example: an employer mistakenly paid an employee a bonus that was conditional on the completion of a certain task. Although the employee claims to have completed the task, the employer produces records of task completion and testimony from other employees to the contrary. This approach not only increases the chances of success in litigation, but also builds the employer's credibility.
The employee's role in the evidence process
As stated by the Supreme Court in its decision No. 21 Cdo 1993/2024-631, in disputes for the recovery of unjust enrichment arising from employment relationships, the employer is not only burdened with the burden of proof to prove the allegation of the transfer of property values to the enriched employee, but also with the burden of proving the facts from which it assumes that the sums of money were transferred to the employee unjustly (incorrectly determined or paid by mistake).
Although a substantial part of the burden of proof rests with the employer, the employee also has a role to play. He must prove the legal reason for the benefit received, which entitles the employee to keep the benefit. If the employee claims to have performed the work, but such a claim is contrary to reality, he must be prepared to provide judicially relevant evidence to support his claims.
Often, the so-called shared burden of proof is applied in such disputes. This means that while the employer must provide evidence that the work was not performed, the employee should be prepared to produce, for example, his own records or communications with supervisors that support his claims.
It is advisable for both parties to be careful about the quality and consistency of their evidence. An employer that has well-established internal processes - such as regularly updated attendance systems and performance records - has a distinct advantage in these disputes.