We will first look at which jurisdictions may be involved in work-related accident proceedings, then who pays the damages, and finally, the liability of the director.
When a work-related accident occurs, proceedings may be opened in several jurisdictions:
- Administrative: because the Labour Inspectorate may impose a penalty.
- Employment:
- Because a disability pension is being claimed
- Because a benefits surcharge is being claimed for failure to implement safety measures, applied to the amount of that disability benefit
- Because damages are being claimed through the employment courts
- Criminal: because the employee believes that a criminal offence has been committed.
- Civil: because there may subsequently be an intention to bring a claim against third parties responsible for the accident.
Written by Albert Perez
Employment Law Adviser
WHO PAYS THE DAMAGES IN A work-related accident
In a work-related accident, there may be several parties liable for payment:
- The administrative penalty: This will be borne by the company (whether a company or a self-employed individual). The amount may vary depending on what is established under the LISOS (Spanish Law on Social Offences and Sanctions) and the severity of the facts. This is a cost that no insurer would cover.
- The disability pension: The National Social Security Institute (INSS) is responsible for payment, but the company will be required to participate in the process. If the employee was not registered with Social Security, the National Social Security Institute (INSS) will claim the capitalised value of the pension directly from the company. Should this occur, it is a cost that no insurer would cover.
- The benefit surcharge: This will be borne by the company. The National Social Security Institute (INSS) will claim a surcharge of between 30% and 50% of the capitalised pension from the company (see this link for full information on the benefit surcharge and how it is calculated). This is a cost that no insurer would cover.
- Damages: The insurer will cover the amount of damages up to the limit set out in the Civil Liability Policy.
- Criminal liability: The company cannot be sentenced to imprisonment or any other criminal penalty. Criminal liability rests with the individual who, through intent or negligence, is responsible for the acts giving rise to the criminal offence. In such cases, the director of the company and any individuals involved in the accident may be called as suspects during the initial phase of the criminal proceedings, the investigative stage, where the Investigating Court will examine whether a criminal offence has taken place. If it determines that one has, it will formally charge the individuals responsible for the accident (whether or not they are directors of the company), and the Criminal Court will then hold a trial to determine guilt or innocence, and, if guilty, the sentence to be served and the damages to be paid. Where a criminal penalty is imposed, no administrative penalty will apply; equally, damages will not be re-examined in employment proceedings, having already been quantified and claimed during the criminal process. See our article for full information on this point.
LIABILITY OF THE director IN A work-related accident
As noted above, the director of the company is not always personally liable for a work-related accident. If the director acts in a managerial capacity and, in doing so, permits or tolerates an unsafe working environment, or is directly responsible for issuing an instruction that requires work to be carried out in a manner that endangers employees, then they will bear personal liability for the accident. However, if the director has no involvement in day-to-day operations and it is others within the company who carry out those operations and/or are responsible for ensuring compliance with occupational health and safety obligations, it may be those individuals who face legal claims instead.
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