Decision of the Constitutional Court No. U-I-272/18, dated 7 April 2022

On the basis of a request by the Supreme Court, the Constitutional Court decided on the constitutionality of a regulation on the forfeiture of the right to unemployment benefits that is no longer in force or has already been amended. It reviewed the seventh indent of the first paragraph and the second paragraph of Article 65 of the Labour Market Regulation Act (hereinafter referred to as the LMRA), which were in force in the period relevant for deciding on stayed appeal proceedings before the Supreme Court.

The Constitutional Court established that the seventh indent of the first paragraph of Article 65 of the LMRA, by which it was determined that a beneficiary forfeits the right to unemployment benefits if he or she submitted incomplete or untrue data regarding the facts on which the acquisition, assessment, or payment of unemployment benefits depends, was not inconsistent with the Constitution. It dismissed the allegation of the applicant that this statutory provision is inconsistent with the principle of the clarity and precision of regulations (Article 2 of the Constitution), from the perspective of which a regulation becomes disputable when by means of interpretation one cannot discern its clear content or when its content cannot be discerned by established means of interpretation. In the opinion of the applicant, it was not clear whether the text of the seventh indent of the first paragraph of Article 65 of the LMRA only refers to instances wherein at the time of the issuance of a decision on the termination of the right to unemployment benefits the insured person still has that right, or also to instances wherein the right to unemployment benefits has already been exhausted at the time of decision-making on its forfeiture. The Constitutional Court adjudicated that already the literal interpretation of the seventh indent of the first paragraph of Article 65 of the LMRA cannot be such that the sanction under this provision, namely the forfeiture of the right to unemployment benefits, can only affect an insured person who already enjoys this right. Furthermore, a constitutionally consistent interpretation would also contradict such an interpretation. An interpretation in accordance with which the forfeiture of the right to unemployment benefits could only affect insured persons who at the time of the decision-making of the Employment Service of Slovenia (hereinafter referred to as the Employment Service) on the forfeiture of the right to unemployment benefits would still enjoy that right, but not also those insured persons whose right has already been exhausted, would namely be inconsistent with the principle of equality determined by the second paragraph of Article 14 of the Constitution. In view thereof, only such interpretation of the seventh indent of the first paragraph of Article 65 of the LMRA is envisageable in accordance with which the right of an insured person to unemployment benefits has been forfeited regardless of whether the Employment Service has decided on the cessation of the right already before it was exhausted or afterwards.

The Constitutional Court also dismissed the allegation of the applicant that the seventh indent of the first paragraph of Article 65 of the LMRA was inconsistent with the first paragraph of Article 50 of the Constitution because it allegedly enabled the interpretation that that provision entails the forfeiture of the right to employment benefits in its entirety, i.e. also as regards the period in which the insured person in fact fulfilled the conditions for receiving such benefits, and also concerning the amount that would be correctly determined, i.e. an amount that is not excessive. It adopted the position that the literal framework of that statutory provision indeed also enables such an interpretation; however, a constitutional interpretation also has to be taken into account. An interpretation of the seventh indent of the second paragraph of Article 65 of the LMRA such that it enables the forfeiture of benefits in their entirety would be inconsistent with the right to social security. Therefore, this provision cannot be interpreted in such a manner.

The second paragraph of Article 65 of the LMRA, which determined that the Employment Service shall decide ex officio on the early termination of unemployment benefits, was inconsistent with the Constitution. With respect to the review of this statutory provision, the Constitutional Court first dismissed the allegation of the applicant as to its inconsistency with the principle of clarity and precision determined by Article 2 of the Constitution. It assessed that by applying established interpretative arguments it is possible to unambiguously establish that the challenged statutory provision on the early termination of unemployment benefits determined a special legal remedy. Therefore, it is not possible to speak of the inconsistency of this provision with the mentioned principle because it is allegedly not clear whether it entailed a new legal remedy or the repeal of a decision on the right to unemployment benefits in accordance with the General Administrative Procedure Act. The Constitutional Court also dismissed the allegation of the applicant that the second paragraph of Article 65 of the LMRA, if it introduces a new legal remedy, is disputable from the perspective of Article 158 of the Constitution, because the LMRA did not determine procedural rules in relation to an interference with a relationship regulated with finality. The Constitutional Court explained that from the principle of finality determined by Article 158 of the Constitution there also follows the requirement that also the procedure on the basis of which relations regulated with finality are interfered with must be clearly determined by law. Since the legislature regulated the essential questions pertaining to the procedure for decision-making on the termination of the right to unemployment benefits, it is, in the assessment of the Constitutional Court, not possible to speak of the inconsistency of the second paragraph of Article 65 of the LMRA with Article 158 of the Constitution insofar as the general allegation that the regulation of decision-making on the termination of the right to employment benefits is insufficiently precise is concerned. In the assessment of the Constitutional Court, the inconsistency of the second paragraph of Article 65 of the LMRA with the principle of legal certainty determined by Article 2 of the Constitution existed because the legislature failed to determine temporal limitations for an interference with a final decision on the right to employment benefits by means of that special legal remedy. In relation to that decision, the Constitutional Court also determined the manner of the implementation of its Decision.