TRIBUNAL CONSTITUCIONAL Portugal

RULING No. 676/16

13 of December of 2016

Headnotes:

I – The Constitutional Court rejected the alleged unconstitutionality of an article in the Law regulating the regime governing reparation for work-related accidents and occupational illnesses, including occupational rehabilitation and reintegration, under which credits derived from the right to reparation established in that Law are inalienable, unattachable, non-renounceable and enjoy the guarantees enshrined in the Labour Code (CT).

II – The constitutional right to private property protects not only real rights, but also the satisfaction of credit rights at the expense of the debtor’s assets (asset-based guarantee).

III – It is, however, tolerable for creditors’ rights to be affected by the impossibility of including compensation for a work-related accident in a bankrupt debtor’s seizable assets, on condition that the extent to which they are affected is limited to that necessary and sufficient to ensure the debtor (an accident victim who is also a debtor) a minimally decent standard of living.

IV – The right to compensation for injuries is an imposition derived from the principle of a democratic state based on the rule of law, and also consubstantiates a specific aspect of the protection afforded to individual rights. As such, the right to compensation and the obligation to compensate should not be viewed separately from their implications for the protection of rights.

V – The compensation awarded to an accident victim under the Law regulating the regime governing reparation for work-related accidents and occupational illnesses is a reflection of a means of protecting rights affected by a work-related accident, albeit this may not always be the whole or only form taken by that protection.

VI – One cannot say that the rule that compensation for a work-related accident cannot be included in a bankrupt debtor’s seizable assets is disproportionate without also taking into account the right which is protected by that compensatory format, inasmuch as taking away or reducing the amount in question affects the protection of an absolute right that can be protected by the Constitution.

VII – In weighing up the sacrifice of the creditors in this situation against that of the holder of the right to compensation for a work-related accident, one must consider the latter’s special nature, which cannot be dissociated from the victim’s effective functional and physical loss, be it temporary or permanent, partial or absolute.

VIII – When creditors’ rights conflict with their debtor’s right to effective reparation for his/her injuries in this way, the outcome may be a proportionate restriction of the former, because it is impossible to say that they should prevail over the latter whatever the circumstances.

IX – The Court thus found that the interpretation of the article before it in this case, whereby credits awarded as compensation to a bankrupt person as a result of a work-related accident are absolutely unattachable and impossible to seize for the purpose of their inclusion in those of his/her assets that are available to satisfy his/her creditors, when no other elements – i.e. the points made above – are taken into consideration, is not unconstitutional.

Summary:

A legal norm says that all credits derived from the right to reparation provided for in the Law which regulates the regime governing reparation for work-related accidents and occupational illnesses work-related accidents, including occupational rehabilitation and reintegration, are inalienable, unattachable and non-renounceable.

The court a quo in the present case considered that, when interpreted to mean that pensions receivable as a result of work-related accidents cannot be attached under any circumstances, this norm was in breach of the right to private property as guaranteed in the Constitution, and negated the ability to transmit that property in life or upon death. In other words, the lower court considered the norm unconstitutional when interpreted in this way and consequently refused to apply it. The Public Prosecutors’ Office is legally bound to appeal to the Constitutional Court against every decision in which another court refuses to apply a legal norm because it deems it unconstitutional, and this was the origin of the present concrete review case.

There are two aspects to compensation awarded for work-related accidents: one concerns the victim’s physical and psychological recovery; the other involves payment of a sum of money calculated in accordance with whether the victim died or was incapacitated, and to what extent.

In previous cases linked to the possibility of attaching part of a person’s income from work, pensions or other periodic revenues of a similar nature, when that attachment can affect the executed party’s receipt of a minimum amount capable of ensuring him/her a minimally decent standard of living, the Constitutional Court had upheld the view that affecting creditors’ rights does not violate the Constitution, on condition that the effect is limited to that necessary and sufficient to ensure the debtor’s minimally decent subsistence.

In its decision in the present case, the lower court had not weighed up the debtor’s asset-related situation, and so the Constitutional Court said that one was unable to say that the amount exempted from attachment (and thus from inclusion in the bankrupt debtor’s seizable assets) exceeded that needed to ensure him and his family a minimally decent standard of living.

A right to compensation must be seen with reference to the right whose reparation is sought by compensatory means. The Court had already recognised that the right to compensation for injuries is an imposition derived from the principle of a democratic state based on the rule of law and consubstantiates a specific aspect of the protection afforded to individual rights.

From this perspective, one can say that the rights that are protected by the Constitution may be intolerably affected if compensation for the damages caused by their injury is denied. In addition to the cases in which the Constitution specifically attributes a right to compensation for injuries, the Court has recognised the existence of a general right to reparation for injuries rooted in the need to respect and guarantee the effective implementation of the fundamental rights included in the principle of a democratic state based on the rule of law.

While civil liability is a consequence of breaches of rights, the reparation for the consequences of the violation of a right is inseparable from the protection of that right. This is recognised in Article 41 of the European Convention on Human Rights.

Inasmuch as, from a constitutional perspective, the right to compensation and the obligation to compensate must be viewed as expressions of the protection afforded to or removed from a right, even though the foremost purpose of the law on work-related accidents is to restore a victim’s capacity for work, the compensation awarded to him/her is also a way of protecting those of his/her rights (e.g. the right to physical integrity) that were affected by the accident.

The Court said that one cannot look at the rule under which compensation for a work-related accident cannot be attached or seized in order to pay a bankrupt person’s debts without also taking the right that is protected by this compensatory format into account. To remove the compensation from the victim’s legal sphere would be to eliminate the protection of a certain absolute right which enjoys the support of the Constitution.

The special nature of compensations for work-related accidents cannot be dissociated from the effective loss they seek to repair, and this means that a creditor’s sacrifice cannot be weighed up in isolation.

The disproportion the lower court said existed in this case cannot be recognised abstractly, without at the same time carefully weighing up the accident victim’s position, both in terms of the monetary amount that should be exempted from attachment or seizure in order to pay his/her debts in bankruptcy, and with regard to the right for which the compensation is intended to provide reparation.

There is a collision between the creditor’s right that exists as part of the affirmation of the guarantee provided by the debtor’s assets on the one hand, and the debtor’s right to see certain amounts which form part of his/her assets deemed immune to that asset-based guarantee because of their origin and function on the other.

The Court said that when a creditor’s right to satisfaction of his/her credits out of the debtor’s assets faces off against the latter’s right to effective reparation for his/her injuries on the basis of the special rules governing labour-related misfortunes, one must concretely weigh up each of the situations involved. This can lead to a (proportionate) restriction on the former, because it is not possible to abstractly say that it must prevail over the latter in every case, whatever the circumstances.

As such, the Constitutional Court disagreed with the court a quo that the normative interpretation in question was unconstitutional, and upheld the mandatory appeal against that court’s decision.

Supplementary information:

One Justice dissented from the majority view, saying that the norm was indeed unconstitutional, because it disproportionately compressed the rights of the bankrupt person’s creditors and this breached the constitutional right to property, when taken in articulation with the constitutional norm which requires restrictions on constitutional rights, freedoms and guarantees to respect the principle of proportionality.

Cross-references:

Rulings nos. 349/91 (03-07-1991); 385/05 (13-07-2005); 657/06 (28-11-2006); 444/08 (23-09-2008); 363/15 (09-07-2015); and 55/16 (02-02-2016).