Constitutional Court

KO219/19, Applicant: The Ombudsperson, Constitutional review of Law No. 06/L-111 on Salaries in Public Sector

KO219/19, Judgment adopted on 30 June 2020, published on 9 July 2020

Key words: Referral by the Ombudsman, law-making, separation of powers, rule of law, legal certainty, predictability of law, constitutional values, public sector, salaries, equality before the law, judiciary, constitutional independent institutions

The Referral was filed by the Institution of the Ombudsperson of the Republic of Kosovo, pursuant to Article 113 paragraph (1) subparagraph (1) of the Constitution. The subject matter of the Referral was the constitutional review of the challenged Law, which according to the Applicant’s allegations is incompatible with paragraph 2 of Article 3 [Equality Before the Law], 4 [Form of Government and Separation of Power], paragraph 1 of Article 7 [Values], 10 [Economy], 21 [General Principles], paragraph 1 of Article 22 [Direct Applicability of International Agreements and Instruments], 23 [Human Dignity], 24 [Equality Before the Law], 46 [Protection of Property], 55 [Limitations on Fundamental Rights and Freedoms], paragraphs 3 and 7 of Article 58 [Responsibilities of the State], paragraph 2 of Article 102 [General Principles of the Judicial System], paragraph 1 of Article 109 [State Prosecutor], 119 [General Principles] paragraphs 1 and 2 of Article 142 [Independent Agencies], 130 [Civilian Aviation Authority] of the Constitution of the Republic of Kosovo (hereinafter: the Constitution), Article 1 of Protocol No. 1 of the European Convention on Human Rights (hereinafter: the ECHR), and paragraph 2 of Article 23 of the Universal Declaration of Human Rights (hereinafter: UDHR).

Under the heading V – CONCLUSIONS – of this Judgment (see paragraphs 308 – 332), the Court summarized the essence of the case and stated the following:

In assessing the constitutionality of Law No. 06/L-111 on Salaries in Public Sector, the Court decided: (i) unanimously that the Referral is admissible for review of merits; (ii) by majority that the challenged Law, in its entirety, is not in compliance with Articles 4, 7, 102, 103, 108, 109, 110 of Chapter VII, Article 115 of Chapter VIII of the Constitution; as well as Articles 132, 136, 139 and 141 of Chapter XII of the Constitution; (iii) to hold that, it is not necessary to consider other Applicant’s allegations after the declaration of the challenged Law in its entirety as unconstitutional in terms of violation of the principles of “separation of powers” and “legal certainty”; (iv) to repeal the interim measure.

The constitutional issue that the Judgment in question contained was the compliance with the Constitution of the challenged Law voted by the Assembly, namely the assessment whether the latter is in compliance with the principle of “separation of powers” and that of the “legal certainty” guaranteed by the abovementioned Articles of the Constitution.

The Court concluded that the challenged Law contained a number of serious problems at the constitutional level that could be summarized as follows: (i) the challenged Law itself contradicts its purpose to “harmonize” salaries at the level of the entire public sector – by making arbitrary and unreasonable exceptions for some institutions, among others the Kosovo Security Force, the Kosovo Intelligence Agency, the Privatization Agency of Kosovo, the Central Bank of Kosovo, and the Assembly itself; (ii) the challenged Law completely excludes the independence of the Judicial power, by not leaving any self-regulatory competence for issues related to the implementation of “functional, organizational and budgetary” independence; (iii) the challenged Law, although emphasizing that the salaries are regulated by this Law, has reduced the legal regulation for many issues at the level of sub-legal acts, giving the possibility of sub-legal regulation only to the Executive and the Legislative; (iv) out of a total of eighteen (18) competencies to issue sub-legal acts, sixteen (16) are for the Government and two (2) for the Assembly, while no self-regulatory competence for the Judiciary or Independent Institutions; (v) the Judiciary and Independent Institutions have not been given any self-regulatory competence through which they could enjoy their “institutional, organizational, structural and budgetary” independence in relation to internal organization and their staff; (vi) only one (1) of the eighteen (18) sub-legal acts that had to be approved within the ninth (9) monthly period of vacatio legis has been approved, namely by 1 December 2019; (vii) as confirmed by the data of the Ministry of Finance and Transfers, for about 42% of the positions it is not possible to decipher the salary because the latter will finally be determined through the relevant classifications with sub-legal acts of the Government; (viii) as confirmed by the data of the Ministry of Finance and Transfers the “additional budget cost” of the challenged Law “is not part of the budget projections 2019-2021”; (ix) as confirmed by the data of the Ministry of Finance and Transfers, even if the challenged Law entered into force today, it could not be fully implemented in the absence of the sub-legal acts.

Regarding Article 1 of the challenged Law, which provided for the purpose of comprehensive harmonization of salaries of the entire public sector, the Court noted that the legislator, without any justification and in an arbitrary manner had excluded from this Law, among others, the KIA (Kosovo Intelligence Agency) and the KSF (Kosovo Security Force), CBK and PAK. In other parts of the Law, the legislator had granted other exceptions, direct or completely unstressed, for the employees of the Assembly, the political staff of the Assembly and the deputies of the Assembly. The Court concluded that the exceptions granted by the challenged Law clearly contradict the very purpose of comprehensive “harmonization” for which, it is said, to have been issued. Consequently, the exceptions made were considered to be against the very purpose of the Law and create unreasonable, unproven and arbitrary differentiations.

With regard to Article 3 (in conjunction with Article 24) of the challenged Law, the Court found that at least two (2) of the six (6) fundamental principles on which the challenged Law is said to have been guided were not followed and respected, namely the one of “predictability” and “transparency”. The first provided that the salary “cannot be reduced, except in an extraordinary situation of financial difficulties and only on the basis of law”; while the second provided that “the procedure for determining the salary, [will] be transparent to the public”. Specifically, regarding the principle of predictability, the Court emphasized that the approach of the legislator to consider as important the principle of “predictability” only for the future, not for the present, has resulted in neglect of the rights of persons who have been negatively affected by the Law on Salaries. This is because according to the new legal regulation of the Assembly, it turns out that for the future, the legislator considers that salaries can be reduced only in extraordinary situations and financial difficulties; while none of the reduced salaries in the public sector by the challenged Law have been justified on the basis of any “extraordinary situation” or “financial difficulty”. The Government, in the Draft Law has foreseen such a guarantee for non-reduction of salaries (Article 27 of the initial Draft Law), but the Assembly had eliminated that guarantee with the amendment. Further, the Court does not consider that the principle of “transparency” was applied when about 42% of positions currently receiving salaries from the state budget, still cannot decipher where they are positioned and how much their salary would be with a new Law on Salaries.

Regarding Articles 4, 5 and 12 of the challenged Law, the Court noted that the Assembly, as one of the three classical powers of the government of the Republic of Kosovo, has provided that all matters relating to the allowances and remunerations of its employees, regular and political staff, and the deputies themselves are to be regulated by “special acts” approved by the Presidency of the Assembly and that such an exception, according to the legislator, “is made based on the nature and specific working conditions of the Assembly of the Republic of Kosovo”. The Court considered that such exceptions provided for only one power – represent one of the most serious constitutional problems of the Law in question. The very selective exclusion of only one power and non-respect of the constitutional guarantees of other powers, completely ignoring the Judiciary and Independent Institutions is a legislative solution that does not coincide with the values ​​and principles of the Constitution, especially the principle of separation and balance of powers.

The Court also noted the fact that the challenged Law gives sixteen (16) special competencies to the Government to regulate certain matters through sub-legal acts and after consultation with the relevant ministries, including issues affecting the Judiciary and Independent Institutions in terms of their functional, organizational, structural and budgetary independence (See Articles 5.4; 5.5; 6.3; 6.4; 7.5; 8.3; 9.5; 14.4; 15.4; 17.4; 18.2; 19.4; 20.5; 21.6; 21.8; 22.5; 25.3; 26.2; 27.2 of the challenged Law). In this regard, the Court noted that in addition to the Assembly, namely the Legislative, the only other power authorized to regulate certain matters by sub-legal acts is the Government, namely the Executive. The only power, to which the independence has been completely ignored by any kind of specific regulation that would take into account the “nature and specific conditions” of its work and independence – is the power of the Judiciary. The same can be said also for the Independent Institutions referred to in Chapters VIII and XII of the Constitution. This meant that all regulatory competencies through sub-legal acts remained in the hands of the Executive and the Legislative – as two of the powers that have in fact drafted, namely adopted this legal initiative through the vote in the Assembly. 

The Court held that the legal regulation, with the complete exception of the self-regulatory competencies of the Judiciary, has undoubtedly created an imbalance in the separation of powers, which the spirit and letter of the Constitution does not aspire to. Such a legal regulation, if confirmed as constitutional, would have the potential to create “interference”, of the Executive power with the power of Judiciary and “dependence” and “subordination” of the power of Judiciary to the Executive, because the former would have to depend on the will of the second in terms of internal regulations for staff and functional, organizational, budgetary and structural aspects of work. Such a legal regulation is in open conflict with the Constitution. 

Regarding Article 31 (in conjunction with Article 34) of the challenged Law which provided that all sub-legal acts provided by this Law must be “approved within 9 months after publication in the Official Gazette” and that the challenged Law “enters into force 9 months after publication in the Official Gazette”, the Court noted that only one (1) of the eighteen (18) sub-legal acts that should have been approved by 1 December 2019, namely within the period that the legislator left as vacatio legis for preparation for the implementation of the challenged Law, was approved. In the answers submitted to the Court, the Ministry of Finance and Transfers has acknowledged that the challenged Law, even if it entered into force today, it could not be implemented in entirety due to the absence of sub-legal acts. The lack of the latter, according to the explanation of the Ministry of Finance and Transfers, has made it impossible for it to respond to about 42% of the positions paid from the state budget because without the approval of sub-legal acts it is not known how much would be the salaries for a number of positions that are currently paid from the state budget. All this careless legislative process, without any doubt, leads to an unacceptable situation of legal uncertainty that can in no way be compatible with the Constitution and its values ​​and principles of predictability, legal certainty and the rule of law.

Regarding Article 32 of the challenged Law, which provides that in case of entry into force of the challenged Law any change in the structure, components or levels of salary coefficients is prohibited, the Court noted some serious conceptual and practical problems to the detriment of the Judiciary and Independent Institutions. This is due to the fact that, if this provision were declared constitutional, it would mean that whenever the Judiciary and other Independent Institutions need to create a new position within their organizational chart, or change the internal organizational structure depending on the need that may arise in the future – they should address the Government to ask for permission and approval to create a new position and to seek permission and approval to change the internal organizational structure. The challenged Law in the final decision-making chain, left the Government as a power that must “approve” any proposal of the Judiciary. The Court found that this legal regulation, without any doubt, in a flagrant way goes contrary to the notion of “institutional, functional and organizational” independence of the Judiciary and Independent Institutions. As such, it is unacceptable and contrary to the Constitution and the key principle of separation of powers as a selected constitutional model for the governance of the Republic of the country.

Regarding Article 33 of the challenged Law, the Court noted that inter alia, some of the specific articles of the organic laws of the Judiciary that previously regulated the issue of salaries of the judiciary in general, of the Constitutional Court and of the presidents of both Councils, the Judicial and the Prosecutorial, have been expressly repealed. However, Article 28 of the challenged Law provides that the latter shall not be applied for the functionaries until 31 December 2022. The Court noted two evident and fundamental problems in this regard.

The first concerned the vacuum and legal contradiction created by the challenged Law. That is for fact that at the legal moment that the challenged Law would enter into force, Article 33 of this Law would repeal all relevant norms which currently regulate the salaries of the Judiciary, of the Constitutional Court, the chairpersons of the Judicial and Prosecutorial Councils (see points 1.4; 1.6; 1.7; 1.8 of Article 33 of the challenged Law) and for whose salaries at the same time the Law states that they will be saved for the respective period. The question arises as to whether the articles of the organic laws governing the current salaries would be repealed upon the entry into force of the challenged Law – on the basis of which Law these special functionaries would receive a salary. What salary would be preserved for them when the provisions governing their old salary – which was supposed to be maintained – would be repealed. By this careless legal regulation, it turns out that the legislator would have left the functionaries in question without any legal regulation. The second had to do with the concept of saving the salaries of the Judiciary only until the end of 2022, and then the drastic reduction of salaries after that date. Such a scenario is not considered to contribute to a guarantee of an independent Judiciary. On the contrary, such a legislative solution would place undesirable pressure on the Judiciary versus Legislative and Executive power.

To reach these conclusions, the Court took into account the following aspects.

Regarding the Assembly, the Court emphasized that the legislative power has the main constitutional competence for legislation at the national level. In terms of the circumstances of the present case, it was therefore indisputable the authorization of the Assembly, that in exercising its competence for “adoption of laws”, it regulates salaries in the public sector according to a certain public policy voted by the Assembly itself. The latter has full authority to choose the best and most appropriate modality, which it considers that in terms of public policy fits the salary system for the Republic of Kosovo. The only limitation that the Assembly has in the legislation is to respect the procedures of law-making and to vote laws that are in accordance with the Constitution and the values and principles proclaimed there.

During the analysis of the challenged Law, the Court deliberately focused on arbitrary salary “reductions” and not on the “increase” of salaries, due to the fact that the Assembly during the drafting of laws should have taken care of the rights of persons whose salaries are reduced. Reasons for salary reductions should be many times more sustainable than the reasons for salary increases because, the former reduces an existing right while the latter add to an existing right. Having said that, the Court emphasizes that the Legislator has the right, after this Judgment, to take any kind of step to increase salaries in the public sector, so as to meet any public policy goal for salary increases in certain sectors. It is not the duty of the Court to state where and how salary increases should be made. The possible modalities for this issue remain entirely at the discretion of the Assembly and the Government.

Regarding the role of the Constitutional Court in the abstract assessment of the constitutionality of the challenged Law, it was clarified that in all cases where a Law of the Assembly is challenged before the Constitutional Court by the authorized parties, the focus of assessment is always on the respect of the constitutional norms and human rights and freedoms – and never on the assessment of the selection of public policy that has led to the adoption of a particular law. The competence of the Court in this case was to assess, in abstracto, whether the challenged Law is constitutional or not, and depending on the answer – to seal its constitutionality or repeal it as unconstitutional. The second was necessary in this case.

At the level of principles set by the Constitution, the Court emphasized that among the fundamental values ​​embodied in the Constitution on which the constitutional order of the Republic of Kosovo is based, among others, are the “separation of powers” and the “rule of law”. The functioning of the democratic state of the Republic of Kosovo is based on the constitutional principle of separation of powers and checks and balance among them. Based on Article 4 of the Constitution regarding the form of government and separation of power: (i) The Assembly exercises legislative power; (ii) The Government is responsible for implementation of laws and state policies; and (iii) The judicial power is unique and independent and is exercised by courts. These three powers constitute the classic triangle of separation of powers. The relationship between the “three powers” is based on the principle of separation of powers and checks and balance among them. The separation of power as a fundamental principle of the highest constitutional level is embodied in the spirit of the Constitution of the country and as such is non-negotiable.

To each of the three classical branches of separation of powers, the Constitution has dedicated a separate chapter. In all three of these chapters [on Legislative; Executive and Judicial power], the general principles as well as the duties and responsibilities of each power are foreseen. In addition, it provides for the mechanisms of checks and balance among them that form the core of how these powers should check and balance each other without creating any unconstitutional “interference”, “dependence” or “subordination” among them that potentially could affect the independence of one or the other power. The logic of the principle of separation of powers is that an influence of a power on the other during the process of their institutional interaction should by no means create an interfering or dependence or subordination relationship that could result in the loss of independence to act as a free and unaffected power. This is the essence of the constitutional balance that the Constitution has established and which is required to be maintained in every interactive instance between independent powers.

In addition, the Court emphasized that the Constitution has recognized a special and important status and role in the conduct of public state duties also to the Independent Institutions referred to in Chapter XII of the Constitution, which have been singled out as such, not without reason. This chapter includes: (i) The Ombudsperson; (ii) the Auditor-General of Kosovo; (iii) Central Election Commission; (iv) Central Bank of Kosovo; (v) Independent Media Commission; and (vi) Independent Agencies.

Unlike other institutions referred to in Chapter XII of the Constitution, “Independent Agencies” provided for in Article 142 of the Constitution “are institutions established by the Assembly based on the respective laws that regulate their establishment, operation and competencies”. This distinction needs to be identified as such, for the reason that the five Independent Institutions referred to in items (i), (ii), (iii), (iv) and (v) have been established as such in the case of voting and entry into force of the existing Constitution by the legislator, namely the Assembly; whereas, the Independent Agencies are not created as such in the case of voting of the existing Constitution – but are agencies for the creation of which the Constitution gives the Assembly the right to create and extinguish them, by law, depending on the needs that may arise in public and social life. Unlike the fact that the Assembly can create and extinguish “by law” Independent Agencies; the Assembly can never extinguish “by law” any of the five independent institutions mentioned above. This is the main difference between Independent Institutions referred to in Chapter XII of the Constitution – which should be considered as such whenever actions affecting the Independent Agencies are taken – which differ from other Independent Institutions.

The key conclusions reached by the Court after analyzing the answers of the Forum of the Venice Commission and the Opinions of the Venice Commission and the case law of the various constitutional and supreme courts, were as follows: (i) there is no single possible system for regulating salaries in the public sector and that there is no internationally recognized principle governing the regulation of “equal pay for equal work”; (ii) most countries regulate salaries through different laws and at the same time apply different methods by regulating this issue either through special laws for specific sectors or through some more concentrated legal regulation; (iii) the Assembly, as a legislative body, has the competence and organic right to issue any kind of legislation on the regulation of salaries in the public sector provided that it complies with the Constitution; (iv) the principle of separation of power and the balance between Legislative, Executive and Judicial power does not imply the isolation of powers and the absence of mutual dependence; however, the latter also means avoiding situations in which unconstitutional “interference”, “dependence” or “subordination” can be created between independent powers; (v) the independence of the judiciary, as one of the branches of power, implies that the judiciary is free from external pressure, and is not subject to influence by the executive branch; (vi) sufficient resources are essential to guarantee judicial independence from other state institutions and private parties – so that the judiciary can perform its duties with integrity and effectiveness; (vii) the reduction of the budget by the executive is an example of how the resources of the judiciary can be put under excessive and undesirable pressure; (viii) there is no rule that creates absolute guarantee that the salaries in the public sector cannot be reduced per se – but that reduction of salaries must be justified; (ix) the reduction of the salary of the judiciary may occur only under conditions of a pronounced economic and financial crisis and which, moreover, must be officially recognized as such; (x) sacrifices in times of crisis [since the emphasis on reduction is always when there are crises] resulting in reduction of salaries that are not universal and are not evenly distributed among all citizens, in proportion to their individual financial ability – are not considered to be compatible with the concepts of distribution of burden among beneficiaries of salaries in a state;

Finally, the Court also noted several important issues.

In case of new legislation in this field, the Government as the proposer of laws and the Assembly as the voter of the laws are obliged to take into account the principles emphasized in this Judgment and other Judgments from the case law of the Constitutional Court in interpreting the respective articles of the Constitution. The “institutional, functional, organizational and budgetary independence” of the Judiciary and Independent Institutions must be recognized, and any legal initiative must respect this independence (See Judgments KO73/16 and KO171/18).

Finding the aforementioned violations made the challenged Law in its entirety unconstitutional. The Court analyzed very carefully the possibility of partial repeal of the challenged Law. However, in the circumstances of the present case such a solution, in contrast to the circumstances of the Law No. 06/L-114 on Public Officials which was partially repealed, was not possible for two main reasons. First, because the constitutional violations evidenced in the challenged Law are of such serious gravity that the latter affect the core of the functioning of government in the Republic of Kosovo – causing an imbalance in the separation of power to the detriment of the Judiciary and Independent Institutions. Second, because the challenged Law does not provide an opportunity to repeal only a few provisions and only a few items of Annexes 1 and 2 because any kind of repeal would make the Law inapplicable in practice. And, in cases where the analysis leads to the conclusion that the Law with partial repeal becomes inapplicable with the remaining articles in force as constitutional, the Court is obliged to repeal the Law in its entirety. 

The Court also emphasized that all powers without exception, have a constitutional obligation to cooperate with each other and perform public duties for the common public good and in the best interest of all citizens of the Republic of Kosovo. These public duties also include the obligation of each power to take care during the performance of its constitutional duties for respect of the independence of the power to which it is creating an “interference”. For example, the Government and the Assembly, despite having the competence to propose and vote on laws, which could also affect the sphere of the Judiciary, as a third power; they [the Government and the Assembly] must ensure that during the drafting of their proposals and until their finalization by the vote of the Assembly, the constitutional independence of the sister power, namely the Judiciary, is preserved. The Government and the Assembly must show the same care and sensitivity to other state actors, which the Constitution has provided with constitutional guarantees of functional, organizational, structural and budgetary independence. Guaranteeing and prior ensuring of the constitutionality of the initiatives of the Government and the Assembly should be the permanent and inseparable aspect of the legal creativity of these two powers.