The hospitality-leisure industry and codes of conduct: objective liability
It is generally understood that legislation in any area can be enacted in response to the vagaries of various factors, including: the need for regulation in a specific area, popular acclaim, social protest, or so-called “consequence-legislation”. Concepts such as “corporate social responsibility“, so-called “compliance“, and other good governance and transparency measures have led to the emergence of so-called “codes of conduct”, laying down a series of rules that serve as a statement of the values or principles of a company, a policy linked to such values or principles, and a set of requirements aimed at regulating the conduct and performance – both current and future – of executives and/or employees, whether in relations between each other, or between them and the company, external stakeholders or society in general. In the hospitality-leisure industry, companies are increasingly approving these types of rules of conduct or internal circulars establishing obligations and procedures that, in practice, not only involve duties for the employees (including executives), but also duties towards employees, since they help to define the values and principles that are required for harmonious co-existence within the company and to help transmit the company’s image externally.
On January 22, 2016 the Public Prosecutor’s Office enacted Circular 1/2016, on the criminal liability of legal entities, pursuant to the reform of the criminal code by Organic Law 1/2015.
Said circular, determines the grounds for charges in respect of breaches of criminal law that may be committed by legal entities, clarifying what charges can be levelled against them and the individuals with authority at the legal entities, either due to their position as shareholders-directors at the company and/or as employees on the payroll.
It should be underscored that not only said Organic Law 1/2015, but also the Public Prosecutor’s Office, endorse the exclusion from liability of legal entities provided that they have set in place organization and management standards that include monitoring and control measures suitable as a means of preventing offences or reducing the risk of their being committed, and provided that such standards have been correctly supervised and updated where necessary.
The more diligent organizations have already sought to implement so-called crime prevention plans (or “PPD”), in which “codes of conduct” tend to be included. As indicated, without these documents, the legal entity cannot be released from objective criminal liability. The most serious offences include influence peddling, bribery, terrorist financing, forgery of credit or debit cards, public health offences, drug trafficking, illegal financing of political parties, fraud, discovery and disclosure of secrets and computer hacking, etc.
Said Circular 1/2016 expressly envisages the “obligation to establish an appropriate disciplinary system that punishes the breach of measures adopted in the standard (…) [which] implies the existence of a code of conduct clearly establishing the obligations of executives and employees (…). It should also envisage forms of conduct aimed at preventing or hindering the discovery of breaches, as well as the breach of the specific duty to report violations detected to a control body, as set forth in requirement four”.
The avoidance by legal entities of the criminal liability that can result from acts perpetrated by their executives or employees therefore depends solely on the corporate will and the correct execution of the duties imposed by the Circular analyzed.
As far as the employees are concerned, in particular, codes of conduct are an expression of soft law, self-imposed rules prepared by the company itself, that with the surge in the new ethical corporate culture of CSR and compliance, have grown exponentially over the last few years.
From a legal perspective, paradoxically (since at the present time they can circumvent the ultima ratio of punitive law, namely criminal liability), codes of conduct are classified in labor and employment legislation as “internal rules”, supported by articles 5, 20 and 54 of the Workers’ Statute. There are also some industry-wide collective labor agreements that already include, together with a disciplinary regime, some form of code of conduct.
In an industry as sensitive as the hospitality industry, tools such as these become extremely important since they enable obligations and procedures to be implemented that impose actual duties on workers who often become the public face of the company.
However, it should be highlighted that the current obligation to have a code of conduct in place is not met merely by the existence of a disciplinary regime. A code of conduct is a much broader concept, although the two may complement each other. Codes of conduct must cover: employee-supplier relations, employee-client relations, employee-authorities relations, employee-employee relations, the establishment of an Ethics Channel/whistle-blower channel, establishment of critical standards (protocols or work systems required due to the nature of the activity), so-called conflicts of interests, unfair competition, the use of goods and services of the company, the use of intangible assets (Internet, wifi…), confidentiality, data protection, dress code, a list of prohibited practices (list of actions that are not permitted), questions related to the environment (for example, reducing paper, electricity, water consumption), etc.
In short, the approval of an integral code of conduct at your organization is essential. Remember that there could already be employees out there whose actions are making you, other colleagues or the legal entity they work for, criminally liable.
Garrigues Tourism and Hotels Department