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Old unclaimed credits – a problem that is not extinguished by the statute of limitations

By 3 Setembro, 2024Outubro 14th, 2024No Comments

A fairly recent ruling – STJ 03/07/2024 – Case No. 10534/21.8T8LSB.L1.S1 (Júlio Gomes) – highlighted an old issue, which our law addresses in a way that is not entirely consensual: the limitation period for claims arising from employment contracts.

The dispute settled by this ruling mainly focused on whether or not payments for regularly performed overtime work should be considered as part of the employee’s remuneration, particularly for the purpose of calculating holiday pay, holiday allowance, and the Christmas bonus. The case involved dock work, and it was proven that, throughout the duration of the employment contract, the worker received significant amounts on a monthly basis for overtime. The ruling, citing established doctrine and case law, along with relevant legislative provisions, concluded that since these payments were of a remunerative nature (due to their regularity), they should have been included (on an annual average) in the calculation of holiday pay, the holiday allowance, and the Christmas bonus.

The particularity of the case lies in the fact that the contract lasted no less than 34 years – from 1985 to 2019 – and it has been proven that the worker never, throughout that period, claimed the inclusion of those amounts in the benefits in question. What’s more, the collective bargaining agreement in force during that period regulated the same benefits in terms of excluding the consideration of remuneration for overtime work. It can therefore be said that both the employer and the employee were convinced that this was the correct remuneration practice.

On these grounds, the employer invoked the existence of an abuse of rights, categorising the employee’s own procedural initiative as a manifestation of bad faith.   From this perspective, the employee’s claim, which was only brought after the termination of the employment relationship, should be disregarded.

The ruling resolved the issue in a few lines, sticking to the practically uniform approach that has prevailed: ‘With regard to the alleged abuse of rights on the part of the worker, the argument does not stand up because it is necessary to take into account the situation of subordination in which the worker finds himself during the term of the employment contract. It is natural that the worker does not react to violations of his rights for fear that this may have repercussions in the form of retaliation or, in any case, a deterioration in the working environment, and for this reason the behaviour of the worker who only comes to demand benefits to which he was entitled after the termination of the employment contract cannot be considered to be manifestly contrary to good faith. And it should be emphasised that this is one of the reasons given for the legislative solution that the limitation period for claims arising from an employment contract only occurs after the employment contract has ended.’

In fact, Article 337 of the Labour Code states that the claims of the employee and the employer are time-barred ‘after one year from the day following that on which the employment contract ended’.

But this precept does not allow us to ignore the fact that there is a problem – that of very old claims that have never been claimed until the contract ends, and which can place employers in an unexpected and heavy financial burden – and that this problem does not find a solution in the law that leaves common legal sense calm and satisfied. While it is true that the situation of psychological dependence of the worker must be taken into account, it is also true that subordination has different degrees and changes, and current judicial experience shows that in many cases the claims of dissatisfied workers do not necessarily depend on the termination of the employment relationship.

Moreover, from an objective point of view, Article 337 does not have a single interpretative possibility – although it must be recognised that the real will of the historical legislator has not departed from the constant understanding that both the courts and the doctrine have advocated in this regard for a long time.

However, ‘de iure condendo’, extreme cases like the one in this judgement show that there is a problem…

António Monteiro Fernandes @ Of Counsel, DCM | Littler