Supreme Court Decision 38991, which was issued on November 4 2010, has established that a board of directors may be held liable in respect of duties of health and safety in the workplace.
Supreme Court decision
The court considered events that resulted in injury and which occurred in a company with a complex structure. In its decision it distinguished between two types of injury event: an event arising from a structural dysfunction in the company and one arising from a chance dysfunction.
The court stated that all members of a board of directors are liable for a breach of the duty to monitor potential injury incidents, unless such incidents are the result of a chance dysfunction. This view is consistent with the requirement to monitor the company's general performance as set out in Article 2392 of the Civil Code, which was in force when the facts of the case occurred. Where the incident arises from a chance dysfunction, only the managing director or the officer in charge of the site is considered liable.
However, the case that the Supreme Court considered dated back to the 1970s; therefore, its decision should be considered in light of the regulations that applied at that time.
Board of directors' liability today
Attempting to interpret the case in the current regulatory context is difficult, as there have been a number of fundamental legislative changes since the events of the case occurred. Two changes are particularly significant:
- Law 626/1994, which was replaced by Legislative Decree 81/2008, introduced a specific regulation on health and safety that requires a company to nominate an 'employer' - that is, the person in charge on health and safety.
- Legislative Decree 6/2003 amended Article 2392 of the code by repealing the general duty of each director to monitor the company's general performance. The general duty of monitoring and supervision was replaced by specific obligations and liabilities that apply to directors to whom specific functions and relevant powers have been delegated - Article 2381 of the code outlines the basis of these obligations and liabilities.
Defining the 'employer' under Article 2(b)
In accordance with Article 2 of the legislative decree, the employer ('datore di lavoro' in Italian) is the party that is liable for the employment relationship with the employee or, in any event, bears liability for the business organisation of the department to which the employee has been assigned. In addition, an 'employer' has certain budget allocation and decision-making powers (in areas including workplace health and safety) and is responsible for fulfilling the duties set out in the applicable Italian legislation.
The employer has certain functions that cannot be delegated, such as:
- the identification of risk factors, risk assessment and evaluation of safety measures and the health aspects of working environments (according to local regulations and on the basis of specific knowledge of the business organisation); and
- the appointment of the person responsible for the prevention and protection service.
In a company with a complex structure, such as the company involved in the case in question, there may be more than one individual - generally among the directors - with similar decision-making powers. Such individuals are jointly liable. As a consequence, each member of the board who has managerial powers may face a penalty.
Thus, it is important to identify a single individual (generally, the chairman of the board) to be designated as the 'employer'. He or she will be the individual vested with the greatest budget allocation and decisionmaking powers and will be liable for health and safety matters.
In light of these legal obligations, certain conclusions can be drawn about complex company structures and the two different type of injury incidents identified by the Supreme Court:
- A company must identify an 'employer' - generally, the chairman of the board - who bears sole liability for injury arising from either chance dysfunction or structural dysfunction.
- Other directors may be deemed liable for injury incidents that arise from structural dysfunction only if they are specifically mandated to monitor health and safety policy (ie, if the employer has delegated certain functions and duties to them under the terms of the legislative decree).
- On this reasoning, the board is wholly liable for injury incidents arising from a chance dysfunction only if the board does not appoint the employer, whereas it is liable for such incidents arising from structural dysfunction only if no director has specific responsibility for health and safety matters.
- A member of the board, regardless of whether he or she has managerial powers, is nevertheless liable if, on being informed on the occurrence of harmful events, he or she does not make his or her best efforts to try to avoid the recurrence of such events, as stated in Article 2392(2) of the code.