Plaintiff S.B., a chemical technologist by profession, entered into an employment contract in 2010 with the company “B.Ç” Ltd., to serve as the technical director, a position necessary for the licensing of the company’s activities. According to the contract, for a period of five years, she was to receive a monthly salary of 25,000 lek. Although she did not actually perform this role, the company benefitted from her diploma in obtaining the license. As a result, S.B. has filed a lawsuit seeking the payment of financial obligations and compensation for damages arising from the employment contract.
The Court of First Instance of Gjirokastër (January 25, 2016) dismissed the lawsuit.
The Court reasoned that the termination of the employment contract was lawful due to the Plaintiff’s failure to fulfill her obligations, as she never appeared at the workplace, as evidenced by the attendance records, and the lack of payment. It was established that the Plaintiff had violated her contractual obligations, thereby granting the Defendant the right to terminate the contract. The request for payment was deemed time-barred, pursuant to Article 203 of the Labor Code, as the three-year period from the accrual of the right had elapsed. The Plaintiff has filed an appeal against this decision.
The Court of Appeal of Gjirokastër (April 13, 2016) decided to uphold the decision of the Court of First Instance of Gjirokastër
The Court of Appeal, reasoning that the Employment Contract entered into between the parties was not intended to produce legal consequences, declared it absolutely void under Article 92/ç of the Civil Code, as the contract was concluded solely for the purpose of enabling the Defendant’s licensing. The Court of Appeal also based its reasoning on the unification decision no. 13/2006 of the High Court of the Republic of Albania. An absolutely void legal act produces no legal effects, and consequently, the Plaintiff’s claims were rightly dismissed by the Court of First Instance. The Plaintiff has filed an appeal against the above decision.
3. The Supreme Court – Civil Panel, on July 16, 2025, accepted the appeal and ordered the annulment of the decision of the Court of Appeal of Gjirokastër, directing the case to be re-examined by a different panel of judges at the Court of Appeal, General Jurisdiction, in Tirana. The Panel held that the employment contract cannot be considered fictitious solely because one party failed to perform it; rather, the absence of mutual intent to create legal consequences must be clearly proven. The Court of Appeal misinterpreted Article 12 of the Labor Code. The employment contract contains four key elements: the provision of services, remuneration, hierarchical dependency, and duration, all of which are present and render the contract valid, even if it is registered with the National Business Center (QKB). The employer is obligated to pay the salary even if the employee is not provided with work due to the employer’s fault, and the termination of the contract may only occur when the employee refuses to perform their duties.
