An overview of employer liability risks if employees become infected at work

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Introduction
With the world still in the throes of COVID–19, a return to normalcy remains far from sight. Still, the gradual resumption of everyday work is on the horizon. More and more employees are returning to the workplace after having worked from home. On the one hand, both working from home and mobile working have proven their feasibility for many job profiles, and both employees and employers alike have experienced the various advantages of such forms of workplace flexibility. On the other hand, the “old office” has also had an opportunity to remind employees and employers of its many advantages inasmuch as it is a marketplace for ideas, provides the opportunity to coordinate and facilitate the exchange of work results among team members and provides the chance to strengthen employer identification and branding. In addition, the housing situation of many employees will not allow them to work from home on a permanent basis. Regardless of when the virus is defeated, it is not hard to predict that COVID–19 will entail some fundamental changes to workplace flexibility and office concepts. The question for now is: What liability risks actually threaten employers if employees become infected with the virus at work? And what precautions can employers take to minimize their liability exposure? Some recent cases, especially in the meat processing industry, have moved these questions into the spotlight.

A short overview:
Liability of the employer
Under the employment relationship, not only the primary performance obligations (“work for pay”), but also peripheral obligations, particularly the employer’s duties of care under Sec. 618 German Civil Code, must be observed. These duties oblige the employer to protect employees against risks to life and health. The standard to be complied with by the employer is specified more closely in the public law occupational safety regulations such as the Occupational Safety Act. With respect to the coronavirus, this means that the employer must implement the required measures of health safety in his business in order to protect employees from contracting infections at their place of work.

If an employer does not comply with this duty of care, there is the risk of liability for the employer under Sections 280 (1), 823 et seq. German Civil Code for personal injury in the event of the illness or even death of an employee, provided his conduct was culpable, that is, intentional or negligent (Sec. 276 German Civil Code). The reimbursable costs include the costs of treatment, the loss of income, the costs of possible long-term effects and their related loss of earnings. If an employee dies, it may be necessary to pay maintenance to his survivors and to assume burial costs.
As developed early on in several groundbreaking decisions, the Federal Labor Court has ruled that an employee who raises such claims must merely substantiate and prove that he has incurred damage and that an irregular situation existed that is generally capable of causing the incurred damage (see, for instance, Federal Labor Court, judgment of February 27, 1970 – 1 AZR 258/69 or the judgment of May 8, 1996 – 5 AZR 315/95). With regard to the current situation, this means that an employee must only present that he is sick with COVID–19 and that the standard of protection at his place of work was insufficient in order to successfully assert his claims. It is then the duty of the employer to refute that the asserted damage was based on an irregular situation or to show that he is not at fault. This will likely present a special challenge in the litigation.

corona as occupational disease and thus application of statutory accident insurance?
The fatal issue in this scenario: The German statutory accident insurer, Deutsche Gesetzliche Unfallversicherung (DGUV), rejects that it has a duty to become involved in cases of injury to health due to COVID–19 infections in the workplace. The DGUV justifies this stance by arguing that illness based on the coronavirus, which has been classified as a pandemic by the World Health Organization (WHO), does not constitute a risk specific to the workplace, but is realised as an illness presenting as a public hazard. The rule (cf. Sec. 104 (1) sentence 1 Social Code VII) that employers are not liable for work accidents and occupational disease – save in the event of willful misconduct –, which is otherwise very useful for employers, will not help in the event of COVID–19 infections in many cases, if one assumes that argument is correct.
According to the DGUV, a different situation can apply, however, to healthcare workers. Here, COVID-19 infections can be recognized to be occupational illnesses under the following conditions:

  • contact with individuals infected with ­SARS-CoV-2 ­under the scope of occupational activities in health care and
  • relevant manifestations of illness such as fever and coughing and
  • positive evidence of the virus through a PCR test.

It remains to be seen whether the stance of the DGUV regarding the general non-acceptance of COVID–19 as an occupational disease will prevail in the courts. Doubts could be particularly justified if several employees become infected at the workplace. As long as no other clarification by court rulings exists, there is the risk, however, that employers will also be made liable for merely negligently caused infections in their employees.

Liability of company management
Not only companies, but also their management could be made liable, as management must also institute new measures to protect employees from infection at work if no such sufficient measures previously existed. This duty is particularly derived from the duty of company management to use care in conducting the business of the company. In the event of breaches, there will at least be liability exposure in relation to the company, e.g. under Sec. 93 (2) Joint Stock Companies Act or Sec. 43 (2) Limited Liability Company Act. While personal liability is primarily directed to the members of the management board, board members are entitled to delegate responsibilities to other personnel, including – to a certain extent – external staff. However, because this does not include selection, instruction and monitoring obligations, which cannot be delegated, board members are well advised to establish an efficient and reasonably equipped health & safety organization with responsibilities for COVID–19. Companies and management staff who have already implemented Compliance Management Systems (CMS) are familiar with these mechanisms, as such concepts are based on the same legal foundation.

Miscellaneous
In addition, violations of occupational safety regulations may constitute an administrative offence according to Sec. 25 Occupational Safety Act, which may entail fines of up to EUR 25,000, or Sec. 130 Administrative Offences Act with the threat of substantially higher fines if the owner of an undertaking omitted to take necessary supervisory measures. The latter legal requirement is again well known as one of the most important triggers for CMS.
Even more drastic consequences may arise for the individuals in charge on the employer side if a violation of occupational safety regulations triggers criminal liability, e.g. for negligent bodily harm under Sec. 229 German Criminal Code or involuntary manslaughter under Sec. 222 German Criminal Code. In these cases, there is even the risk of incarceration.
Furthermore, employees may refuse under some circumstances to perform work obligations under Sec. 273 (1) German Civil Code without losing their claim to pay if occupational safety requirements are not met by the employer.

Codetermination of the works council
The works council also plays an important role if employers want to take steps to prevent COVID–19 infections. According to Sec. 87 (1) No. 7 Works Constitution Act, internal regulations which specify statutory occupational health & safety provisions are subject to co-determination. As the German health & safety laws are full of “catch-all” provisions, Sec. 87 (1) No. 7 Works Constitution Act has a broad scope of application. One example of such catch-all provisions is Sec. 3 (1) Occupational Safety Act, which requires employers to take the necessary steps to protect employee health in the workplace. It is very likely that courts will deem the prevention of COVID–19 to be this kind of measure, making it no surprise that ­COVID–19 works agreements have been circulating among employers in recent months.

Recommended action
In addition to compliance with the statutory occupational safety regulations, it is highly recommended to follow the “non-binding recommendations“, specifically the SARS-CoV-2 Occupational Safety Standards of the Federal Ministry of Labor and Social Affairs of April 16, 2020, to minimize a company’s liability exposure as much as possible.
Although there might not be a direct duty to follow the measures provided for therein (including social distancing of 1.5 meters, possible provision of nose/mouth coverings, working from home where possible) since the occupational work standard has not been passed as either a statute or ordinance, the occupational safety standard has been attributed significant relevance because it is clear that it will be taken into account when a review of “required” protective measures under Sec. 3 (1) sentence 1 Occupational Safety Act is made. To such extent, its implementation will also be relevant for the question of whether the employer has complied with his duties of care and diligence. The DGUV, for instance, views the occupational safety standard, together with its specific implementations in the specific industries to be “specific ­requirements“ of occupational safety. If there is compliance with the occupational safety standards and any industry-specific requirements when occupational safety measures are introduced and implemented with regard to COVID–19, there will likely be the assumption to the benefit of the employer that he has taken the “required action“. The employer will then be more easily able to refute a possible connection between an irregular situation and the illness of employees. Furthermore, works council co-determination has to be taken into account and ­COVID–19 is definitely one more opportunity to review the efficiency and appropriateness of the health & safety organisation.

t.mahnhold@justem.de

s.schulte@justem.de

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