In its judgment of 27 August 2026, Case No. 21 Cdo 175/2026, the Supreme Court considered the validity of an employee’s dismissal on grounds of redundancy under Section 52(c) of the Labour Code. The employer had decided to reduce the number of operational chemists from sixteen to fifteen and selected the claimant for redundancy. However, one of the other employees was employed under a fixed-term employment contract scheduled to expire before the end of the claimant’s notice period. The lower courts therefore examined whether the objective of the organisational change could have been achieved simply by allowing that employee’s fixed-term employment to expire.
The employer argued that it had entered into an agreement with that employee under which his employment relationship would subsequently be converted back into employment for an indefinite period if he proved suitable. The Court of Appeal considered this agreement absolutely invalid, inter alia, due to the failure to comply with the written form requirement and its conflict with statutory rules governing probationary periods. It therefore disregarded the agreement when assessing the redundancy.
The Supreme Court rejected this conclusion. It emphasised that, when determining whether a breach of a statutory rule results in absolute or merely relative invalidity of a legal act, it is necessary to examine primarily the purpose and objective of the rule that has been breached. In employment relationships, the special statutory protection of employees is one of the fundamental values protected by public policy.
In the case at hand, the disputed agreement was intended to secure the employee’s future employment for an indefinite period. According to the Supreme Court, it would therefore be paradoxical to conclude that the agreement was absolutely invalid by relying on rules designed to protect that employee if such a conclusion would operate against his interests. The Supreme Court therefore held that any invalidity of such an agreement could only be relative.
The Supreme Court further reiterated that relative invalidity of an employment-related legal act may be invoked only by the person whose interests the relevant rule is intended to protect, provided that the person did not cause the invalidity. Accordingly, where the protected employee had not invoked the invalidity of the agreement, the court could not automatically proceed on the basis that the agreement was invalid.
HR Legal Update 09/2026 download here.