CIVIL AND CRIMINAL LIABILITY OF COMPANY DIRECTORS ARISING FROM OCCUPATIONAL ACCIDENTS (MARCH 2017)

An occupational accident is admitted as an incident that occurs suddenly and externally as a result of the work performed by the employee under the authority of the employer.

With respect to the definitions related to occupational accident, the concept of "employer" and the question; “who will be called as an employer” become important. According to Paragraph 1 of Article 2 of the Labor Law, a real/legal person or an institution/organization without legal entity which employs employees is called employer.

According to the definition of the Article, an employer with a legal entity may be a private entity (company, association, foundation, cooperative, trade union etc.) or a public legal entity (state economic enterprise, university, municipality etc.). In this respect; trade companies whose legal entities have been explicitly regulated by the law, are considered as employers as long as they employ employees and they are subject to all rights and obligations of an employer.

The legal entity who is a party to a employment contract has right to demand the performance of the committed work as a creditor. On the other hand, the right of administration and the authority to issue orders and instructions are necessarily used by the body of the legal entity. The distinction between “abstract employer” and “concrete employer” emerges at this point. If there is a possibility that the right to demand the performance of the work and the right to demand the compliance with instructions belong to different persons;

  • The persons who are entitled to demand the performance of the work shall be defined as “abstract employer”,
  • The persons who are entitled to issue orders and instructions preeminently shall be defined as “concrete employer”.

As stated in the Supreme Court decisions, the legal entity itself is an “abstract employer”; while the persons constituting the body of the legal entity are “concrete employer”.

The body, which is called concrete employer, of legal entity, constitutes of shareholders, managers holding shares or board of directors. However, the body of the legal entity may be established as a board or only a member or manager who has the management and representation authority may constitute a body. In this case, this member or manager is also considered as a concrete employer.

In joint stock companies, the member of board of directors, who has been authorised to manage and represent  the company, shall be also deemed a “concrete employer”, as the executive director  in accordance with Article 367 of the Turkish Commercial Code. Likewise, if the management authority of the company is assigned to a shareholder in limited companies, limited partnership associations or unlimited companies, this shareholder shall be considered as a body and be deemed as a concrete employer. In this case, the will of the legal entity is declared by this “person-body” and the legal entity is represented by this person.

In the event the management and representation authority of the company is assigned to the persons or managers elected from outside, these persons acquire the title of the employer's representative. According to the Labor Law numbered 4857; there must be two factors in order to be considered as representative of employer;  

  • First one is to act on behalf of the employer,
  • The other one is, to take part in the management of the work, the workplace and the business.

Since the representatives of employer are considered as employers, it is clear that they are also obliged to provide health and safety of the employees regarding their works, in accordance with the Occupational Health and Safety Code numbered 6331.

In the trade companies, general managers and directors are regarded as the representatives of employer. However, in joint stock companies, the managing director who has the management and representation authority of the company, is considered as the employer. As such, in limited companies, limited partnership associations and unlimited companies, shareholders who are “person-body” at the same time, are also employers not the representatives of the employer.

1- Legal Responsibility of Trade Companies and Their Bodies in Terms of Occupational Accidents 

The distinction between abstract and concrete employer shows itself at the point of identifying the addressees of legal and penal sanctions.  

The abstract employer holds the legal responsibility since the abstract employer is a party to employment contract. For example, joint stock company itself, as a legal entity, shall be responsible for all the legal liabilities under Law such as failure in performance of obligations arisen from Labor Law or non-performance of the duties under employment contract. Likewise, overtime pay, the severance pay of the employees or compensations arising from an occupational accident shall be borne by the abstract employer. However, the abstract employer may recede to concrete employers or representatives of employer for the payments he made according to the nature of the incident and the relationship between them.

It should be especially indicated that the legal entity employer shall not be held liable only if the causal relation between the damage occurred and the employer disappears, in case of force majeure or in the event the entire fault belongs to employee.

2- Criminal Liability of Trade Companies and Their Bodies in Terms of Occupational Accidents 

According to the principle of individual criminal responsibility, trade companies which are abstract legal entities do not have criminal liability. In principle, all real persons forming the body of a legal entity; are criminally liable if they are considered as employers.

Management and representation authority of the legal entity may have been granted to one or more members of the body, or it may be agreed that the obligations arising from provisions of labor law shall be fulfilled by certain members. In such a case, the criminal liability of all the members of the body shall not be penalised but the person or persons causing the criminal act of the legal entity by their faulty will shall be penalised. Managing directors in joint-stock companies are criminally liable as person-body. Likewise in trade companies, in the event the management and representation authority has been granted to a shareholder manager, this person shall be criminally responsible due to his title of employer. On the other hand, the representatives of employer shall be subject to criminal sanction with respect to the extent of their management and duties.  

Consequently, it is clear that legal entities having the title of employer are obliged to ensure the health and safety of the employees regarding their work. In the case of violation of this obligation, the responsibility will arise according to the difference between concrete and abstract employer. Accordingly;  

  • The abstract employer, -the legal entity itself- shall have legal liability due to the occupational accident,  
  • The concrete employer -the persons forming the body of the legal entity- shall have criminal liability, in case that they cause the legal entity to commit an offence.