I. Introduction: Compatibility of the Labor and Criminal Compliance Systems
Legal entities may be criminally liable "for crimes committed in their name or on their behalf and to their direct or indirect benefit by their lawful representatives or by those who, acting individually or as members of a body of the legal entity, are authorized to make decisions in the name of the legal entity or hold powers of organization and control", in accordance with Article 31bis.1.a) of the Criminal Code. This represents the main manner of attributing criminal liability for a legal entity.
But there is a second way, which is what we are interested in here: the one that attributes criminal liability to a legal entity for crimes committed in the performance of company activities and on their behalf and to their direct or indirect benefit, “by those who, being subject to the authority of the natural persons mentioned in the previous paragraph, were able to perform the acts because they themselves seriously breached the duties of supervision, monitoring, and control of the activity thereof considering the specific circumstances of the case (Art. 31bis.1.b) of the Criminal Code)”. In short, liability arises because of a lack of control over the company's employees, thus representing an essential element in the chain of attribution of criminal liability.
In this article we will focus our attention on this second manner of attributing criminal liability to a legal entity, more specifically, on those susceptible to generating such liability, that is, the employees, and on the effect of compliance programs on them, considering that they directly affect the rights and obligations of workers. So, let us analyze the compatibility of labor and criminal compliance systems.
II. What is Labor Compliance?
Well, it is nothing more than the need to monitor and check the comprehensive regulatory compliance of work rules for workers and the supply chain affecting various areas including labor relations, occupational risk prevention, new technologies, and non-discrimination and equal opportunities. But how is such labor compliance put into practice? Essentially, through labor compliance management systems, that is, systems that are designed to prevent risks deriving from regulatory breaches in the labor area and to mitigate the consequences of those that could not have been avoided. When we talk about labor compliance management systems, we refer to systems designed basically for the prevention of risks deriving from regulatory breaches in the social-occupational sphere as well as for the prompt detection and correction of those risks that could not have been avoided.
Indeed, labor compliance (like criminal compliance) aims to establish programs to monitor and verify labor performance and regulatory compliance in each country or jurisdiction where a company may be operating. Clearly, the success of labor compliance policies lies in the organic internalization of corporate social responsibility and a culture of ethical compliance in the conduct of all workers who provide services to a business organization at all of its levels.
III. Compatibility of Compliance with the Disciplinary System for Penalizing Worker Non-Compliance: Codes of Ethics
Having laid the foundations of labor compliance, the following question arises: How can compatibility between the prioritization of labor standards and criminal compliance be ensured, especially considering that a business organization is availed of its own rules - self-regulation - which should include, first and foremost, a Code of Ethics or Code of Conduct? The answer: by ensuring that the Code of Ethics is referenced to the provisions of the Workers' Statute and the Collective Bargaining Agreement applicable to the company in which we are implementing the Organizational and Management Model for Crime Prevention.
This is due to the fact that the disciplinary system is a matter reserved to the collective bargaining that characterizes offenses, their gravity, and the penalties applicable as their result. It has thus been established by case law of the high court in recent years, case law where, since the Supreme Court judgment of February 8, 2005, the high court has given legitimacy to the Code of Ethics provided that it is subject to the rule of law and the applicable collective bargaining agreement. Furthermore, the Code of Ethics must adhere not only to the principle of criminalization but also to the principles of proportionality, degrees of fault, and hearing. Likewise, it is to be a key factor in configuring the Code of Ethics that attention be paid to the requirement that an adversary process be commenced when workers' representatives are to be penalized.
Indeed, it must be acknowledged that in no manner can Codes of Ethics recognize offenses and penalties that are not reflected in the collective bargaining agreement. Consequently, conduct susceptible to penalty cannot be subjected to rules if not included in the collective bargaining agreement itself (principle of criminalization) and nor can conduct provided for in the collective bargaining agreement be included if its gradation is altered (principle of degree of fault). This applies regardless of whether the Code of Ethics itself stipulates the criteria of degree that are to be considered when determining the gravity of faults, such as a relationship of special trust in the job position, the responsibilities inherent to that, the risk situation created at the company, the gravity of the harm, concealment and fraudulent intent, and repetition and duration of time. All of these are principles that have been profoundly developed over time in labor case law doctrine.
The Code of Ethics is to establish that the disciplinary measures match the regimen of faults and penalties provided for in the collective bargaining agreement or in the applicable labor legislation, without prejudice to any criminal and administrative liabilities that may also be applicable. That notwithstanding, the Code of Ethics may establish an obligation to report conduct that may be improper or criminal without the current existence of an express legal rule to protect whistleblowers or accusers, which ultimately means that the channel of accusation is governed by the company's own internal rules, as has been established in case law.1
With regard to the issue of the compatibility of disciplinary measures with the self-regulation of companies (compliance or soft law), it can be concluded that in order to ensure compatibility between the prioritization of labor standards and criminal compliance, we must ensure that the Code of Ethics of a business organization makes reference to the provisions of the Workers' Statute and the applicable collective bargaining agreement of the company where we are implementing the model for crime prevention. Indeed, offenses and penalties cannot be recognized in Codes of Ethics if not reflected in the applicable collective bargaining agreement and, therefore, conduct susceptible to penalty cannot be subjected to rules if not included in the collective bargaining agreement itself (principle of criminalization) and nor can conduct provided for in the collective bargaining agreement be included if its gradation is altered (principle of degree of fault).
 Judgment of the Canary Islands Court of Justice, Labor Chamber, of June 22, 2016, Judgment No. 552/2016, and Judgment of the Superior Court of Justice of Castilla-La Mancha, Labor Chamber, of February 9, 2017, Judgment No. 195/2017.
[*] Juan Cuenca is an associate lawyer in the Corporate Department in the Barcelona office of Roca Junyent. He has extensive experience in practicing business law in general, both on the corporate and contractual, in processes related to mergers and acquisitions and formalization of business agreements. In the area of corporate compliance and money laundering prevention, he advises companies and business groups on compliance with their obligations, establishes internal regulatory protocols and whistleblowing systems and advises the regulatory and monitoring bodies and commissions. Mr. Cuenca can be contacted at firstname.lastname@example.org
Pilar Baltar is an associate lawyer in the Labor Department in the Barcelona office of Roca Junyent. Pilar’s work embraces all facets of employment and Social Security law. She has extensive experience in providing advice on labor related issues and restructuring processes and in handling her clients’ cases before the employment courts and tribunals. Mrs. Baltar can be contacted at email@example.com