July 2026
As we move into the height of summer, we bring you commentary on three important recent Supreme Court judgments addressing very different issues, all of which have significant implications for the day-to-day management of employment relationships and workplace practices.
Case 1: Workplace Attendance and Variable Pay
Supreme Court Judgment No. 522/2026, 29 May 2026
In Judgment No. 522/2026 of 29 May, the Supreme Court held that periods of sickness absence may only be taken into account when calculating variable remuneration if the performance targets are reduced proportionately to reflect the duration of the absence. The Court applies the same reasoning to absences resulting from disciplinary suspensions without pay.
Case 2: Unlawful Supply of Labour in Established Supreme Court Case Law
Supreme Court Judgment No. 548/2026, 16 June 2026
In Judgment No. 548/2026 of 16 June, the Supreme Court reaffirms its well-established approach to determining whether an unlawful supply of labour exists. On this occasion, the case concerned the relationship between a temporary employment agency and the user undertaking.
The Court reiterates that the assessment depends on whether the supplying entity or contractor genuinely deploys its own business organisation and acts as the true employer in the specific circumstances. An unlawful supply of labour arises where a temporary employment agency operates outside the situations expressly permitted by law in its relationship with the user undertaking.
Case 3: A Further Step in the Expansion of Protection Against Retaliation
Supreme Court Judgment No. 562/2026
In Judgment No. 562/2026, the Supreme Court held that an employee’s refusal to verbally accept a change to her working conditions, followed by her dismissal only a few days later, falls within the scope of protection against retaliation. As a result, the dismissal was deemed not merely unfair but automatically void.
The Court emphasised that protection against retaliation extends beyond employer responses to legal proceedings brought by employees. It also covers “prior, preparatory or instrumental acts aimed at asserting rights”, including internal complaints, pre-litigation claims, conciliation requests, reports to the Labour Inspectorate, administrative proceedings, formally submitted requests to the employer, complaints channelled through employee representatives, or any other unequivocal action intended to initiate the employee’s legal defence.
