The Constitutional Court has previously dealt with the issue of true concurrency, referring to situations where a member of a statutory body is required to perform activities within the employment relationship that falls under the so-called business management. In this case (III. ÚS 410/23), the Chairman of the Board of Directors had entered into both anExecutive Service Agreement with the company and a Management Agreement for the position of CEO.

The Constitutional Court agreed with the conclusions of the general courts that, by the principle of autonomy of will,the Executive Service Agreement could fall under the Labour Code, subject to the mandatory restrictions of corporate law. By concluding a "Management Agreement", the complainant concluded an amendment and subjected the existing Executive Service Agreement to the Labour Code. However, the aforementioned corporate law restrictions include the obligation to have the agreement approved by the relevant body of the corporation, in this case the General Meeting. Without such approval, the "Management Agreement", as an amendment to the Executive Service Agreement, did not become effective. The complainant could therefore not be entitled to the agreed remuneration but only to the normal remuneration. At the same time, the courts held that, if there had been a breach of due care, the member of the body was not entitled to the normal remuneration.  

Despite the complainant's objections to the conclusions of the general courts, the Constitutional Court concluded that the above-mentioned corporate restrictions constitute a reasonable limitation of the autonomy of will and contractual freedom, pursuing the objective of protecting the rights of a commercial corporation. At the same time, it confirmed that the absence of approval by the competent authority has serious consequences for the effectiveness of the contract and the related provision of remuneration.

Author: Nathalie Hofmanová