Zouboulidis v. Greece (no. 2)

Information Note on the Court’s case-law No. 120

June 2009

Zouboulidis v. Greece (no. 2) - 36963/06

Judgment 25.6.2009 [Section I]

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Peaceful enjoyment of possessions

Application of different limitation period and starting points for default interest between State and private parties in labour dispute: violation

Facts: The applicant, a civil servant in the Ministry of Foreign Affairs, is married and has two minor children. Between 1993 and 2002 he worked at the Greek Embassy in Berlin under a permanent contract governed by private law. Officials of the Ministry receive a basic salary plus allowances and additional payments. The applicant received an expatriation allowance but the Ministry refused him entitlement to the additional payments for dependent children on account of a distinction, established on the basis of ministerial decisions, between officials employed under private-law contracts and others. In 1998 the applicant brought an action in the civil courts and, on the basis of a new law that removed the above-mentioned distinction, had his entitlement to the additional payments recognised by a judgment of the Court of Cassation. In 2001 the applicant applied to the court of first instance seeking payment of the supplement to his expatriation allowance plus default interest from the date on which the payments had been due. The court granted the application and the State appealed against that judgment. The court of appeal reversed the judgment, re-examined the case on the merits and partially granted the applicant’s request. The court of appeal observed that the Court of Cassation judgment, which had become final, represented an irrevocable ruling on the applicant’s entitlement to the payments in question. It went on to find, however, that the applicant’s claims were subject to the two-year limitation period provided for by law. Lastly, it concluded that the applicant was entitled to the payments plus default interest from the date on which notice of his action had been served on the State. The applicant appealed on points of law, arguing that the privilege accorded to the State resulting from the two-year limitation period was contrary to the principle of equality and infringed his right to peaceful enjoyment of his possessions. He also challenged the rule that the date from which default interest was charged on all State debts was the day on which notice of the action was served on the State. In the applicant’s view, this privilege amounted to an unjustified derogation from the rules of employment law. The appeal was dismissed by the Court of Cassation. It considered, in particular, that the existence of different rules was justified by the nature of the debts and by the need to ensure that the State’s debts were settled promptly. The court found that this system was justified on the public‑interest ground of reducing public expenditure in this sphere and allowing the State to meet other expenses connected with the provision of services to the public.

Law: The applicant had been entitled to a supplement to his expatriation allowance by virtue of a law which clearly stipulated that the allowance in question, increased by a certain percentage to cover family and accommodation costs, was to be paid to all civil servants working abroad. The applicant’s entitlement had been recognised with final effect by the domestic courts and he had therefore had a certain and enforceable claim to payment of the supplement to his expatriation allowance. The courts had also recognised that default interest was payable on the amounts owed to the applicant by the State. The applicant had therefore had a claim in respect of the default interest which was sufficiently well established to be enforceable. Accordingly, Article 1 of Protocol No. 1 was applicable in the instant case. The applicant had not been fully compensated for the non-payment of the supplement during the relevant period, as the domestic courts had applied the special provisions of a law on civil servants which permitted exceptions to the rules of civil law and employment law and accorded certain privileges to the State, including limitation periods of between five and twenty years. The two-year limitation period constituted an exception to the provisions of civil law. The period within which the State could enforce its claims was two to ten times as long as the limitation period for enforcing claims against the State. The Court took note of the Government’s main argument, reaffirmed by the case-law of the Court of Cassation but not by the recent rulings of the Supreme Administrative Court, that the preferential treatment accorded to the State with regard to the limitation periods applied to its obligations towards individuals was justified on two main grounds: the need to ensure that the State’s debts were settled promptly and the need to avoid an unforeseen burden on its budget. However, the instant case concerned an employment dispute relating to the payment of a supplement to the expatriation allowance of a contractual employee of the State, which in this case had been acting like any other private employer. While the authorities might discharge public duties even in the context of private-law procedures, the mere fact of belonging to the State structure was not sufficient in itself to justify the application of State privileges in all circumstances; such privileges had to be necessary for the proper performance of public duties. The mere interest of the State’s cash flow or the concern to settle the State’s debts promptly could not in themselves be treated as a public or general interest justifying interference with individual rights. Furthermore, no specific additional evidence had been provided as to the impact which a decision favourable to the claims of other persons in the same situation as the applicant would have on the financial stability of the State. This was particularly true given the considerable disparity between the limitation periods applicable to the State and the applicant in the present case. Accordingly, there had been insufficient public-interest grounds to justify applying the two-year limitation period to the applicant’s claims against the State. The same was true with regard to the starting-point fixed by the domestic courts for calculating the default interest on the sums payable. In particular, the civil courts had taken as the starting-point the date on which notice of the applicant’s action had been served on the State, whereas according to the Civil Code the employer was given notice and obliged to pay default interest on the date on which the payments in question fell due. In the light of the foregoing, a mere reference in abstract terms to the interest in settling the State’s debts promptly was not sufficient justification for granting preferential treatment to the State in fixing the date from which default interest was charged on the sums due to an individual occupying a civil service post under a private-law contract. The application by the domestic courts of the special provisions according privileges to the State had therefore infringed the applicant’s right to peaceful enjoyment of his possessions and upset the fair balance to be struck between the protection of property and the demands of the general interest.

Conclusion: violation (unanimously).

Article 41 – EUR 35,000 for pecuniary damage. Finding of a violation constituted sufficient just satisfaction for any non-pecuniary damage.

© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.

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