The current complexity of the global business environment, as a result of more dynamic commercial activity and personal relations, means that many companies have already implemented an internal code of conduct for their employees.
From a labor law perspective, whether they form part of more generic compliance or corporate social responsibility policies or are independent, these codes of conduct are an extremely useful tool for establishing an ethical-professional framework to be observed by workers, both in their inter-personal relations as well as those with third parties (suppliers, clients, etc.).
A recent study by the International Bar Association (IBA), following a survey carried out of 36 large multinationals, showed that the main issues regulated by the codes include inter-professional conduct, the protection of confidential internal information, handling of corporate assets, conflicts of interest and transparency and, recently, the use of social networks, amongst others.
Obviously, apart from constituting authentic declarations of principles, the underlying corporate intention is for their to be binding upon their employees.
However, what is the true legal status of a code of conduct? To what extent is a company legally entitled to penalize workers based on a code of conduct?
To reply to these questions, we should recall that the Spanish legal-labor system is governed by the principle of legality in relation to infringements and penalties. Unlike in the legal systems of other neighboring countries (such as France), Spanish legislators have granted the power to typify acts punishable by companies to collective bargaining agreements and to the law, without companies being able to create internal rules as a source of law in this regard.
Nevertheless, this legal reservation, which is established in art. 58 of the Workers’ Statute (“WS”), does not prevent companies from demanding that their workers comply with the rules set forth in their codes of conduct.
Indeed, our Supreme Court has acknowledged the possibility that compliance with the code of conduct forming part of the principles of contractual good faith and compliance with company instructions, principles that, in fact, are included in the WS and collective bargaining agreements, a serious breach of which can even lead to the maximum penalty of dismissal.
From this perspective, our case law has legalized the application of penalties for failure by a worker to comply with the code of conduct, not solely based on the code as a source of penalty, but considering, as the case may be, whether the infringement would be considered as such in the range of infringements –and penalties- set forth in the applicable collective bargaining agreement and/or WS.
In order to achieve this objective, it is therefore essential for company staff to be aware of and accept the code of conduct as a set of rules on behavior, values and principles that must govern labor relationships and, if infringed, must form part of the disciplinary regime of collective bargaining agreements and the WS, without overlooking the workers’ constitutional rights in the regulation of their conduct.
In short, codes of conduct are seen as efficient corporate self-regulation mechanisms that emphasize correct compliance by workers with certain specific internal policies that, if breached and provided the collective bargaining agreement or legal regime is taken into account, may give rise to disciplinary action.
Garrigues Labor and Employment Law Department