Penalty payment

Penalty payment - what is it?

As the name suggests, this is the amount that the addressee of the precept must pay if they fail to comply with the precept by the set deadline. The amount of the penalty payment is determined by a specific law or, if not, the maximum limit is €9,600 for each imposition. However, it is important to know that a penalty payment can be imposed repeatedly, until the addressee of the precept fulfils their obligation.

Applying the penalty payment - how?

The Labour Inspectorate exercises national and administrative supervision over employers’ compliance with the obligations imposed on them by various laws (e.g. the Employment Contracts Act, the Occupational Health and Safety Act, etc.) and regulations (e.g. the occupational health and safety requirements set for a workplace, health and safety requirements in construction work, etc.).

If an employer fails to comply with its obligations, the Labour Inspectorate has the right to issue precepts to remedy the violation. If the employer fails to remedy the violation within the deadline set in the precept, a penalty payment may be imposed.

Prior to the application of a coercive measure, the Labour Inspectorate will issue a written warning to the employer (warning of penalty payment), which shall include:

• a reference to the precept that must be complied with;
• the date by which the precept can be complied with;
• the coercive measure which shall be applied in the case of failure to comply with the precept;
• the name of the administrative authority which issued the warning;
• the date on which the warning was prepared.

Generally, a precept to remedy a violation and a warning to impose a penalty payment are prepared in a single document, but they can also be prepared as two separate documents.

Upon failure to comply with a precept by the prescribed deadline, the Labour Inspectorate as an administrative body is allowed to apply a coercive measure, except in the case of exceptions provided for in the Substitutional Performance and Non-Compliance Levies Act (hereinafter ATSS) (e.g, if the provision of law which was the basis of the precept is repealed).

Penalty payment - when and how?

The Labour Inspectorate will allow you to pay the penalty payment voluntarily before we initiate the administrative enforcement procedure (by filing an application with the bailiff to initiate enforcement proceedings). To this end, the employer is notified that a decision has been made demanding a penalty payment, a deadline is set for the voluntary performance of the claim and the employer is informed that an enforcement order will be submitted to the bailiff if the penalty is not paid. The notice on the application of a penalty payment will also include specifics on how and to where the payment should be made.  

It is important to remember that voluntary compliance with a penalty payment does not exempt the party from complying with the precept. 

A penalty payment is not a punishment but is rather used as a preventive measure to force the addressee to comply with the precept without delay, so that there is no need to apply the same or another coercive measure to the addressee again. The addressee has the right to challenge the application of the penalty payment, including its amount, before an administrative court.