1. Criminal and Civil Liability of the Employer regarding Occupational Accident:
Work can pose risks to employees however simple it may be. In view of this, in Brazil, the risk eventually caused in the performance of the contracted functions, strictly is liability of the company that thereby benefits from the work provided by the employer.
According to the article 19, main section of Act no. 8,213/1991, the definition of occupational work accident is one that occurs due to the exercise of work for the company, causing bodily injury or functional disturbance that causes death or loss, or yet, the permanent and/or temporary reduction of the ability to work.
For a better understanding of the employer’s limits and duties regarding civil liability for any damages suffered by their employee when carrying out their activities, we should note that the current legislation regulates some rules that include exceptions, supported by the Federal Constitution (“CF”) and Brazilian Civil Code (“CC”), as we will see thereafter.
1.1. Objective versus subjective civil liability:
Regarding the subject of employer’s civil liability in occupational accident, it is required to focus on two types of liabilities according to the Brazilian legislation:
a) Objective: provided for in the sole paragraph of the article 927 of the Brazilian Civil Code that:
It is based on the theory of risk, from which it is concluded that, willful misconduct or fault of the causative agent is not even taken into account, that is, there is no need to check whether the employer has taken the risk (willful misconduct) or have contributed to the accident due to negligence, recklessness or malpractice (fault). In relation to duty to indemnify, it is only required the evidence of two requirements: the simple proof of the damage and the causal relationship between the action and this damage.
b) Subjective: based on the article 7, section XXVIII of the Federal Constitution, in conjunction with the articles 186 and 927, main section of the Brazilian Civil Code.
It is understood that, the damages caused should be repaired by the employer, if the following requirements are present: damage, causality nexus and fault of the agent, that is, if the employer’s fault is proven. Therefore, differently from objective liability theory, in this category it is required to demonstrate willful misconduct or fault by the employer for the result of the accident and consequently the duty to indemnify.
1.2. Application of the theory of the employer’s civil liability in Occupational Accident in the Labor Court:
Labor legislation (Labor Relations Code) does not provide a specific provision for the analysis of the application of the theory of Civil Liability by the employer in Occupational Accident in the Labor Courts, which therefore is applied through case law, that is, by the set of decisions and interpretations of law made by the higher courts.
It is imperative to clarify that the existence or not of the employer’s civil liability shall be analyzed by the Labor Court, and not by the Ordinary Court (Civil), since the occupational accident, possibly discussed, arises from a harmful event caused by the employment contract, that is, arising from the performance of the activities contracted by the employer.
In relation to the employer’s civil liability, currently we should note that the Labor Court adopts subjective liability as a general rule to hold employers liable for occupational accidents.
However, since this understanding arises from the interpretation of the legislation by legal theory and case law, especially when set forth by the Superior Labor Court (TST), the highest body in the labor field, the rule of subjective civil liability includes flexibilities for its imputation.
The basis for the Labor Court to make the criteria that govern civil liability more flexible, listed in the previous item, must observe the principles of victim protection, protection of human dignity (article 1 of the Federal Constitution), work valorization (article 170 of the Federal Constitution) and its exemplary, pedagogical, punitive and preventive purpose.
Therefore, based on these principles, the Judiciary Branch understands that it is up to the employer to prevent their employees from unsafe acts in the performance of their work activities. This is the general duty of care expected of the employer when referring to the worker’s health; based on diligent behavior that must exceed that commonly practiced, principally because compliance with legislation and the duty of prevention constitutes obligations determined by law, being the least that is expected of the employer regarding their employees.
Therefore, it is expected that as employers, that they act with the utmost duty of care, being extremely attentive in complying with all the health and safety rules of the law in force, since even though they provide all these guidelines/information, the non-compliance by their employees can be understood as lack of diligence on the part of the employer, and eventually, they may be held liable for that. Thus, the duty of vigilance does not cease and must be constant and unequivocal.
Furthermore, the Labor Court shall observe, in addition to complying with health and safety rules, but further due to supply of Personal Protection Equipment (PPE), promotion of training and initial and updating courses, implementation of preventive policies.
It is noteworthy that occupational accidents are considered not only those that occur during the working day or during working hours, but also accidents that occur during the journey to and from work, the journey between home and work and vice versa are also considered occupation accident (item “d” of section IV of article 21 of Act 8,213/1991).
Furthermore, there is another way to recognize occupational accidents. This is the case of occupational or professional diseases, which are equivalent to occupational accidents pursuant to the law.
Occupational/professional disease is defined in the article 20, I and II of Act no. 8,213 dated as of July 24, 1991 as the disease “produced or triggered by the exercise of work related to a certain activity and contained in the list prepared by the Ministry of Labor and Social Welfare”.
Such diseases are caused by small traumas that daily affect the health/motion of part of the body, triggering some disease over a period of time exposed to that harmful agent/situation.
For better understanding, we mention some examples: repetitive motion that incur tendonitis, spinal problems or in other parts of the body; lung diseases because they are in constant contact with high level of dust, gases or other harmful agents; deafness caused by an extremely noisy place; among others.
In cases of occupational disease, the employer’s fault is also characterized by non-compliance with the duty of prevention, reduction of the causative agent of damage, or the breach of hygiene, medicine and work safety rules.
That said, there is no doubt that the employer who does not adopt these measures, considered appropriate for the prevention of occupational accidents, inevitably shall be liable to pay moral, material damages and even a life annuity, depending on the case. The reason is that without due care and taking these preventive measures within the work environment, the Court will understand that the employer acted with willful misconduct or fault, elements necessary to characterize subjective civil liability, as aforementioned.
The payment of indemnity, resulting from an occupational work accident that resulted in the decrease or loss of the worker’s working ability, can take place either in the form of a monthly annuity, or through the payment of a single installment (article 950, main section and sole paragraph of the CC), whose values shall be calculated pursuant to the loss of the working ability and, thus can result in significant amounts with great financial impact.
The judge shall analyze the specific case regarding the constitutional guarantee of the dignity of the person and the principle of reasonableness and the degree of loss of the working ability, which option is the best suited to that specific case.
The hiring of workforce presupposes the preservation, not only physical, but also the mental and emotional health of the employee to the detriment of their labor force made available to the employer.
On the other hand, an employer who can prove before the Court that they have adopted all the appropriate measures for the prevention of occupational accidents, in the light of subjective civil liability, in theory, cannot be held civilly liable for the accident, since their willful misconduct or fault is absent. In other words, as long as there is no contribution by the employer to the occurrence of that accident or damage, the employee’s own fault is attributed.
1.3. Risk Activities and Objective Liability:
As aforementioned, despite the adoption of the subjective civil liability category as a general rule, it has an exception.
In view of the majority positioning of case law and legal theory for the application of objective civil liability when the incidence of occupational work accident due to risky activity, the Full Bench of the Federal Supreme Court (STF) ratified the understanding on September 5, 2019.
Thus, the STF settled the understanding that the worker who works in risky activity, shall be entitled to indemnity due to damages resulting from occupational accident, regardless of the evidence of fault or willful misconduct of the employer.
Therefore, regardless of adopting all the hygiene, medicine, health and work safety measures aforementioned, that is, although the employer did not contribute to such harmful event, they shall even so be held civilly liable for the accident.
However, this understanding is based on the theory of risk when the business activity developed presupposes the existence of potential risk to the physical and psychological integrity of the employee. For its application, it is imperative that the company expose the worker, in the execution of their activities, to a higher risk than the other workers are submitted.
According to our labor legislation, unhealthy and dangerous activities are considered risky.
Unhealthy activities are those that expose the worker to “agents harmful to health, above the limits of tolerance and fixed due to the nature and intensity of the agent and the time of exposure to its effects” (article 189 of the CLT) and are regulated in Regulatory Rule no. 15.
Dangerous or unsafe activities, in turn, are those that imply “accentuated risk due to the worker’s permanent exposure to” (article 193 of the CLT): Flammable, explosives or electrical energy; theft or other types of physical violence in professional activities of personal or property security; the activities of workers on motorcycle. These activities are regulated by Regulatory Rule no. 16.
However, as we will see below, although the law establishes unhealthy activities (article 187 of the CLT) and dangerous activities (article 193 of the CLT) as being of risk, and there is also an extensive special legislation that recognizes objective civil liability in various activities, the new Civil Code does not define what is risky activity, causing an unclear and uncertain field that allows the recognition, by legal theory and case law, of other activities that give rise to objective liability, in cases of occupational accidents, by activity risk.
Although the CLT defines unhealthy and dangerous activities as risky, the Brazilian Civil Code, by providing for objective liability (sole paragraph, article 927 of the CC), did not define what risky activity is, leaving the choice by the Judge or Court , according to the specific case, its recognition and the possibility of verifying whether the activity is at risk or not and defining it as such.
As an example, some of the risky activities that the Labor Court has recognized as risky are: Port Activity; Nursing; Carpentry; Passenger Transport – bus driver and conductor; Work using motorcycle; Garbage Collector on Public Roads – garbage collector and street cleaner; Civil Construction; Electrician; with Machine Operation – boiler, forklift, crawler tractor etc.; Oil exploration; Cash Transportation; Surveillance; among several others recognized in case law.
Thus, it can be concluded that in the case of civil liability for damages caused by the employer to the employee, the general rule of subjective civil liability shall apply. However, exceptionally, objective civil liability shall be applicable in cases where the contracted activity causes, by its nature, risks to the employee.
1.4. Criminal Liability of the Employer in Occupational Accidents:
Brazilian legislation also provides for the possibility of criminal liability of the employer or direct agent responsible for the safety of workers who fail to comply with the rules of hygiene, medicine, health and work safety, as aforementioned.
Criminal liability in occupational work accidents arises under the Brazilian Criminal Code (article 132 of the Criminal Code), which understands as a crime the fact of exposing the life or health of others to direct and imminent danger.
In order to incur criminal liability in occupational work accidents, the employer must necessarily act with willful misconduct or fault in order to result in that harmful event, since the Brazilian Criminal Code (article 13) presupposes as a requirement “the action or omission without which the result would not have occurred”. Therefore, criminal liability shall always be subjective.
As a result, only an occupational accident resulting from willful misconduct or culpable conduct shall be liable to criminal liability. The first is when the agent gives cause to the result intentionally, or assuming the risk of producing it, and the second is when the agent lacks the duty of care in carrying out the action, causing the harmful result.
It is imperative to mention that failure to comply with a duty of care is not enough, only in case that this failure has been the cause of the occupational work accident. The liability of the employer (legal entity) does not exclude the liability of individuals, perpetrator, accessory or participants in the same fact, so that the employer, service provider,
agent, member of CIPA [IAPC – Internal Accident Prevention Commission], security engineer etc., may also be criminally liable if verified by the competent authority that they have contributed as a causative direct agent in relation to the accident.
In addition to the provision in the Criminal Code, the same law that regulates occupational work accidents (Act no. 8,213/1991), provides in its article 19, paragraph 2 that the simple non- compliance with health safety rules “constitutes a misdemeanor, punishable by fine”, and therefore, there is no need to result in an occupational accident the employer’s commissive or omissive conduct, and is only required the verification by the competent authority for criminal liability.
Therefore, the employer or direct agent may be held criminally liable not only when the worker suffers an accident in the workplace, but also for not complying with the health and safety rules provided for by law.
2. Anticorruption Law (Act no. 12,846/2013) and Civil, Criminal and Administrative Liability of Legal Entities and Individuals;
Better known as the “Anticorruption Law”, Act no. 12,846/2013 provides for the administrative and civil liability of legal entities concerning to the practice of acts against the public administration, in national or foreign level.
Formulated in order to combat more harmful acts practiced by companies to public entities, especially in bids and agreements, the Anticorruption Law establishes that the liability of the legal entity does not exclude the individual liability of its partners, administrators, employees or any natural person, perpetrator, accessory or participant in the tort (article 3). In this case, the limit of their liability shall be analyzed according to the extent of their mens rea (article 3,
paragraph 2).
The liability provided for in the Anticorruption Law is objective, so that, if tort is committed, it cannot fail to be held liable, but as aforementioned, the limit of the offender’s liability shall be analyzed according to their mens rea, and they may suffer penalties, whether more or less severe.
It is imperative to note that the practice of acts against private companies, even though there is no specific law for these cases, however, the duty of repair must prevail and the liability of employees or workers for these acts shall be based, as appropriate, on the Civil Code, Criminal Code and the Labor Relations Code (CLT).
The penalties established by law may be applied by the public entity itself or only by legal means, as we will see thereafter.
In the Civil Liability sphere, the penalties provided for legal entities considered liable for the harmful acts provided for in the law depend on a court ruling and which may affect in an isolated or cumulative manner (article 19, paragraph 3), in actions filed by public lawyers or judicial representation bodies of the Federal Government, States, Federal District and Municipalities, or by the Public Prosecution Office (article 19, main section), namely:
I. Loss of assets, rights or values that represent an advantage or profit directly or indirectly obtained from the infraction;
II. Suspension or partial interdiction of its activities;
III. Compulsory dissolution of the legal entity;
IV. Prohibition of receiving incentives, allowance, subsidies, donations or loans from public bodies or entities and from public financial institutions or controlled by the public authority, for a least one (1) and a maximum of five (5) years;
V. The Public Prosecution Office or the State Prosecutor’s Office or judicial representation body, or equivalent, of the public entity may request the freezing of asset, rights or values necessary to secure the payment of the fine or full compensation for the damage caused.
On the other hand, in the administrative sphere, the following sanctions shall be applied to legal entities held liable for the harmful acts provided for in the law (article 6, main section): fine, in the amount of one tenth percent (0.1%) to twenty percent (20%) of the gross revenue of the last financial year prior to the initiation of the administrative proceeding (article 6, I) or if it is not possible to use the criterion of the gross billing value of the legal entity, the fine shall be from six thousand reais (BRL 6,000.00) to sixty million reais (BRL 60,000,000.00) (article 6, paragraph 4).
Criminal responsibility, in turn, shall always depend on proof of the willful misconduct, that is, when the agent gives cause to the harmful act intentionally or assuming the risk of producing it. Without the characterization of willful misconduct, there can be no criminal liability.
As an example, we have a common situation in the practice of corruption crimes: when the immediate superior orders a tort to their subordinate, the mere direct participation of the subordinate is not enough to penalize them, unlike their superior, who had full knowledge and intention to commit the tort. Regarding the subordinate, they may suffer the consequences provided for in the CLT (article 482 and subsequent).
2.1. Labor compliance and the impact on labor relations
As can be noted, the sanctions provided for in the Anticorruption Law may be enough to take it out of the market, since in addition to providing for a very high fine up to 20% of gross revenue, they can affect companies separately or cumulatively. Therefore, in addition to an administrative fine, the company may be compelled to suspend its business activities and even carry out the dissolution of the legal entity.
In this strict and recent scenario brought by the Anticorruption Law enacted in 2013, companies have found through Labor Compliance programs the main mechanism to combat corruption crimes and any other tort within the work environment, which do not fit with the company’s values and culture.
Labor Compliance is governed by implementing the Code of Conduct and Ethics, publication of the Internal Regulations and Company Policies, Internal Controls, Training of all employees and executive board, Complaint Channels, Internal Investigations, Analysis and review with third parties, Risk Assessment, among other measures.
Furthermore, Labor Compliance serves to curb not only corruption, but also discriminatory behaviors as: psychological harassment, sexual harassment and even to prevent occupational accidents, avoid liability in lawsuits and mitigate labor liabilities – the latter situations seen in the previous items.
The aforementioned measures comprise the main principles of the Labor Compliance and demonstrate that companies are not only concerned with adapting to the new legislation, but that they also operate based on moral and ethical values, rejecting any act of corruption or misconduct.
If it is proven that the Compliance program is robust, it shall be taken into account for the purpose of evaluating the mens rea of the legal entity (article 3, paragraph 2 of the
Anticorruption Law).
As aforementioned, the liability in the Anticorruption Law is objective, so that, if the tort is committed, it cannot fail to be held liable, but it may have a less severe influence on the amount of the administrative fine and on the limit of civil liability.
In the Criminal sphere, in turn, it can promote an acquittal in the criminal sphere, if it is found that all possible measures have been taken to maintain the good standing of the organization, pursuant to the previously established criteria, since the Criminal Code adopts the criterion of subjective liability – which depends on willful misconduct or fault in committing the tort.
On the other hand, if the infringing conduct is identified in advance, the company may apply the disciplinary sanctions provided for in the CLT (article 482) and dismiss the employee for gross misconduct.
Therefore, the use of Compliance programs with diligent compliance with the legislation, can lead to the prevention of infractions and reduction of company expenses and, consequently, the reduction of labor lawsuits and accountability in all spheres: civil, criminal, administrative and labor.
Gaia Silva Gaede Advogados
3. Disregard of legal personality
Until Act no. 13,467/2017 came into force, there was no provision in the labor legislation for the liability of the partners of a company to labor executions.
Consequently, on the basis of Article 8, paragraph 1 of the Labor Relations Code (“CLT”), the theories of Piercing the Corporate Veil within the scope of the Common Law to the labor process were used as a basis.
The difficulty found, which generated great discussions in legal theory and case law, consisted of which provision of law to be used to mitigate the gap in the labor legislation.
According to article 50 of the Civil Code, there will be piercing corporate veil in case of improper use of corporate status, characterized by deviation from purpose or co-mingling of assets. Therefore, for the application of the aforementioned legal provision, so that the partners or administrators are liable for the labor execution, it is imperative that there is a clear proof of the misuse of the legal entity, used with the intention of committing fraud.
On the other hand, article 28 of the Consumer Protection Code (“CDC”)1 is more comprehensive than the Civil Code, making it possible for partners to be held liable also in cases of infringement of the law, deed or tort. In summary, by the CDC, the liability of the partners is allowed whenever the legal entity is an obstacle for the compensation of the losses caused to the consumers.
The application of article 28 of the CDC in the labor sphere is defended by the fact that both Consumer Law and Labor Law are based on the weakness of one of the parties to the legal relationship, which is not verified in Civil Law.
However, according to the principle of the most favorable rule for workers, which governs the work process, the provision in the CDC would also be applicable to the detriment of the Civil Code.
In this scenario, despite the controversy on the subject, decisions in the Labor Court prevail, which hold partners or administrators liable for executions simply because there are credits in favor of the employee, of fringe benefits character, showing that there was a breach of the law by the employer.
Furthermore, the partners who benefited from the employee’s labor, even if they have already left the company, were also held liable.
Once held liable, the partner who considers themselves harmed by the absence of fraud or improper use of corporate status could file a recourse against the actual liable person for the obligation.
Upon the publication of Act no. 13,467/2017, article 10-A was included in the CLT, which provides that the retiring partner is liable for the labor obligations of the company related to the period in which they were a partner, and the judge must respect the following preference order: (i) the debtor company; (ii) current partners; and (iii) retiring partners.
To that end, after the Labor Reform, there is no longer any gap in the labor legislation regarding the liability of the partners, and the law published on the subject does not require the presence of any requirement for the liability of the partners for labor obligations. In other words, the liability of the partners is automatic in case of default by the debtor company.
It is worth emphasizing that, even with article 10-A2 of the CLT, the requirements of article 50 of the Civil Code must be fulfilled, since the absence of requirements for the piercing corporate veil would not be intentional, remaining a gap in the CLT in this regard that allows the application of Common Law.
The partner’s liability is possible from a procedural point of view, even if they have not participated in the process knowledge phase. However, for their liability in the execution phase, it is necessary to initiate the incidental lawsuit for legal entity, respecting the procedure provided for in article 855-A of the CLT. The said incidental lawsuit aims to guarantee the full right to defense of the partners.
3.1. Retiring partner
As aforementioned, until the publication of Act no. 13,467/2017, the CLT did not expressly regulate the retiring partner’s liability. However, it predicted that the “change in ownership or legal structure of the company shall not affect the employment contracts of the respective employees”.
Furthermore, the CLT guaranteed that the labor obligations contracted at the time when the employees worked for the predecessor company are the liability of the successor, and predecessor company and successor shall respond jointly and severally when fraud in the transfer is proven 3.
In this context, the retiring partner was jointly and severally liable to company and injured third parties (employees of the successor company/surviving company or those linked to the predecessor company/acquired company) for fault in the performance of their duties.
The discussion about the retiring partner dealt with the temporal limitation of their liability. On one hand, there are judgments in the sense that, partners present in the company during the employee’s employment contract, even if they had already left the company more than two years ago, could be held liable for having benefited from the employee’s labor.
On the other hand, there are those who applied the Civil Code, limiting the liability of the retiring partner to two years after registering the company’s resolution.
Act 13,467/2017 brought this discussion to an end, establishing that the retiring partner shall be liable for labor debts related to the lawsuits filed up to two years after the contract modification was registered.
The retiring partner’s liability is secondary, reached only after the default of the main debtor and the current partners. The liability becomes joint and several with the other current partners of the company only in the case of proven fraud in the alteration of the incorporation documents resulting from the modification of the contract.
1 – The judge may disregard of legal personality of the company when, to the detriment of the consumer, there is abuse of rights, excess of power, infringement of the law, deed or tort or breach of the by-laws or articles of association. The piercing the corporate veil shall also take effect when there is bankruptcy, insolvency, discontinuance of activities or inactivity of the legal entity caused by maladministration.
2 – The retiring partner responds in a secondary manner for the labor obligations of the company related to the period in which they appeared as a partner, only in lawsuits filed up to two years after the modification of the contract is annotated subject to the following preference order:
I – the debtor company;
II – current partners; and
III – retiring members.
Sole paragraph. The retiring partner shall respond jointly with the others when fraud in the alteration of the incorporation documents resulting from the modification of the contract is proven.
3 – Article 448-A. Characterizing the corporate or employer succession provided for in articles 10 and 448 of this Code, the labor obligations, including those incurred at the time the employees worked for the predecessor company, are the liability of the successor.
Sole paragraph. The predecessor company and successor shall respond jointly when transfer fraud is proven.
Authors: Maria Beatriz R. Dias ([email protected]) e Renata Gonçalves da Silva
Gaia Silva Gaede Advogados
Rua da Quitanda, 126
BR-01012-010 São Paulo – SP
Tel (11) 3797 7400
[email protected]
www.gsga.com.br
Authors: Maria Rosário Rocha e Deborah Monte
Fleury, Coimbra & Rhomberg Advogados
Rua do Rocio, 350 – 10º andar – Vila Olímpia
BR-04552-000 São Paulo – SP
Tel (11) 3294 1600
[email protected]
www.fcrlaw.com.br