Mk&Partners

Mk&Partners

domenica 29 gennaio 2012

Rexlaw: business corporation – included sole traders – and enforcement of Decree n. 231/2001 – from the origins to the Thyssenkrupp case.


The conclusions reached by the Criminal Court of Taurin (Torino) in the criminal case proceeded against the management of Thyssenkrupp shed a light over the consequences - serious and important – of the enforcement of Decree n. 231/2001, which introduced – already more than 10 years ago – in the Italian legal system the principle of “corporate liability” for the crimes (there is a list of crimes funding the corporate liability) committed by managers, officers or employees in the interest and for the benefit of a “body” as such as private companies or sole traders.

The legal liability introduced by these rules, although named "administrative", actually has a very criminal nature, originating straight from the commission of crimes by managers or employees, which is derived a profit for the corporate body from.

It is also considered to be a direct responsibility, and therefore subjective, because the corporate liability is addressed “directly” to the company (even though the crime is necessarily committed by an individual) itself and, more in particular, to a gross negligence in the interior organization of the “body”, which is always presumed to be existing, according with the provisions of D.lgs. 231/2001.

The presumption of gross negligence can be avoided only demonstrating the adoption and effective enforcement of models and procedurs of corporate organization and business management and demonstrating, therefore, the clear willingness of the individuals (who committed the crime in interest and at advantage of the body) to get around the pre existing procedures and the models

And in fact, the "gross negligence" in the business organization - hence the corporate liability of the “body” - consists in the lack of the adoption of procedures and models for the business organization and corporate management. 

The Supreme Court also made clear that the company liability is a stand-alone and separate liability, compared to the responsibility of the individuals charged with alleged accusations. 

However the corporate liability doesn’t subsist if it’s possible to demonstrate that the body has adopted and effectively enforced, before the commission of crime by a manager or an employee, the procedures and models of business organization and corporate management and if those (models and procedures) are actually adequate and suitable to prevent the crimes contemplated by the list content in the D.lgs. n. 231/2001 and subsequent amendments

Hither in the absence of above mentioned procedures and models either in case of their inadequacy or failure in their practical enforcement, the company has to face a very consistent sanctioning system, which is being implemented with great rigor, as made clear by the territorial Courts, even in civil suits, and by the Supreme Court

As noted above, serious and significant are the punishments, both pecuniary fines and disqualifications/bans orders, provided by D.lgs. 231/2001.

Moreover, it should be underlined that the disqualification or ban from pursuing the core business of the company may be applied as a precautionary measure, whenever are alleged by the Prosecutor Office serious clues about the responsibilities of the body and there are substantial and specific elements from which is clear that new crimes of the same nature as such as those for which is proceeded can be committed pending the legal suit.

No punishment is, on the other hand, to be applied if the body had previously adopted organizational models and procedures and if it had been ensuring the regular implementation and practical enforcement.

Moreover, the D.Lgs. 231/2001 has to be coordinated with the rules in the area of security and safety measures on the workplace, since D.lgs. n. 231/2001 refers expressly the regulations in the area of security and safety on workplace due to the fact that it has recently been extended referring to crimes pertaining to labor law.

Consequently, stated that, if the bodies won’t comply to the rules provided in area of workplace safety and security, there’s a clear liability pursuant to D.lgs. n. 231/2011.

In particular, in case the bodies fail to comply with the prescription issued by D.lgs. n. 231/2001 and by the rules issued in the area of security and safety on workplace, the Ministry of Labour, through the local inspectors, may even issue an order - in this case of purely administrative nature - the banishment of the body from pursuing is workability in the following circumstances:

1) recourse to off the books workers in a percentage equal or mayor to/than 20% of workers with regular contracts;
2) Repeated violations of daily and weekly rest and excess of the maximum (average) weekly working hours;
3) serious and repeated violations of rules in area of security and safety at workplace.

Furthermore, as stated before, in addition to judicial sanctioning system above described, in the area of labor unlawful behaviors in business organization, emerges a disqualification/ban befitting an administrative nature (which can be appealed before the TAR).

It shall even pointed out that the crimes of manslaughter and culpable bodily harms, as a result of violation of rules in the area of security and safety on workplace, merge into the list of crimes funding the corporate liability. The sanctioning system to be applied in such cases is the one provided from the D.lgs. n. 231/2001.

Given that, even in the occurrence of one of the above mentioned crimes, the corporate liability can be avoided if it is proved the existence and enforcement of the procedures and models for the business organization and corporate management beyond a system of internal regulation and controls in terms of security and safety work on work place.

In light of this legal system, the necessity to comply with provisions of D.lgs. 231/2001 is especially for the business corporations or sole traders an urgent priority, meanwhile bodies still underestimate given the serious and expensive risks associated with the lack of procedures and organizational models required by law.

Nevertheless, the risk faced by those bodies which do not comply with the requirements demanded by D.lgs. n. 231/2001 is very high and it is the actual ban/disqualification from the business market, not forgetting that, at best, the body can keep operating just after the appointment of a judicial commissioner, and only in special cases. 

The disqualification/ban has a serious impact on the workability of the company and due to this may necessarily have aftermaths and repercussions on occupational levels,

So it hard to understand why Italian companies have failed and are still failing to comply with the legislation rules under discussion. 

Moreover, in recent years, there has been a huge improvement in the enforcement of the provisions contained in D.lgs. n. 231/2001 as appears from many precautionary measures issued by the Courts and consisting in the vary disqualification/ban measures provided by D.lgs. 231/2001.

It surely appears clear that the Italian Courts are enforcing the Decree 231/2001 with severity, sanctioning the body issuing precautionary measures ever since the beginning of the processes, during the investigations, for the crimes committed by managers or employees in the interest and at advantage of the body itself. 

As a further demonstration of the severity shown up by the Courts in this matter, it must be pointed out, as written in previous posts, that pursuant to the Supreme Court the bodies which failed in the adoption and implementation of organizational models and procedures required by the law represent a danger for the whole society and economic system. 

Therefore, pursuant to the Supreme Court, all the bodies must comply necessarily with the provisions of D.lgs. n. 231/2001 except for the State, the local governments and all institutions that perform relevant and constitutional functions which can be dispensed from this compliance (Sent. No 20560/2010, 28699 / 2010).

According to the Supreme Court, the provisions issued by the D.lgs. n. 231/2001 are to be applied even to the sole traders, which must adopt models and procedures to avoid the corporate liability.
This is a logical conclusion, given the intimate connection established between D.lgs. 231/2001 and rules on  safety and security on the workplace.

Of particular importance is also the decision n. 1774/2008, issued by the Court of Milan, which charged as responsible managers (directors, general managers) of a private company for the damages caused to the stake holders from the lack of models and procedures. 

In fact, the company, which hadn’t been complied to the provision of the D.lgs. n. 231/2001, was banned by the Court from any business activity due to the commission of crimes listed by the D.lgs. n. 231/2001 in its interest and at its advantage. 

It was right the lack of models and procedures to urge the criminal Court to issue a precautionary measure, banning the company itself from continuing its activity, with big damages for stake holders, who sued the managers before the Civil Court for damages compensation. 

The decision issued by the Court of Milan, especially in light of the principles enunciated by the Supreme Court above described, leads to the following statement "it is compulsory for the businesses to provide comply with the prescriptions issued by the D.lgs. n. 231/2001", and this is necessary right to free the managers (Directors, general managers, etc ...) from the risk of being sued even before the Civil Courts in case of suits for professional malpractice lodged by stake holders against them - under the prescription of art. 2393 cod. Civil Code. 

The statements consecrated by the Milan’s Court House sounds like a clear warning to the managers of companies, such as directors and general managers, not to be indifferent towards the provisions of Legislative Decree n. 231/01.

The indifference can be extremely “expensive” for the managers, since the liability referred to the D.lgs. n. 231/2001 is often based on the negligence in their conducts and behaviors.

In order to adapt your company to the provisions of D.lgs. n. 231/2001, Rexlaw (renatomusella@hotmail.com) is able to put at your disposal the know-how and highly qualified team to provide professional assistance.

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