Individual Application

The Facts

The applicant received the payment order issued by the Provincial Directorate of the Social Security Institution for the social security contributions of the company where he is a shareholder and a Board member as well as for the incurred default interest. The applicant filed an action with the labour court for annulment of the payment order. Having an expert report obtained on the issue, the labour court dismissed the action relying on the expert report as a ground. On the applicant’s appeal, the first instance decision was upheld by the Court of Cassation.

The Applicant’s Allegations

The applicant maintained that his right to property had been violated as he had been held responsible for the debts to the public incurred by the company where he was a Board member but had no authority to represent.

The Court’s Assessment

The applicant’s being held responsible for the social security contributions and default interest incurred by the debtor company undoubtedly constituted an interference with his right to property. Such an interference may be found compatible with the provisions of the Constitution only when it was based on a law, served the aim of public interest and complied with the proportionality principle.

Both the abolished Law no. 506 and the Law no. 5510, which took effect on 1 July 2008, are intended for ensuring timely and regular collection of the contributions. The Social Security Institution’s ability to provide social security benefits is also contingent on the timely and full payment of insurance contributions which are the primary source of income.

In this sense, the practice whereby all members of the Board of Directors -even if they have no authority to represent and bind- are held responsible in order to secure effective, full and timely collection of contribution liabilities, as in the present case, is undoubtedly appropriate and necessary.  This statutory arrangement is designated to secure the collection of contributions and to promote timely payments.

It is undoubted that collection of the public receivables directly from the applicant was appropriate and necessary to attain the aim of public interest pursued. Besides, the applicant, bringing an action before the labour court and subsequently lodging an appeal, had the opportunity to effectively put forth all his claims and submissions.

The applicant could also demand the return of the amount he paid from the other shareholders in proportion to the shares they possess.  As for the amount corresponding to his own share, the applicant has the opportunity to recourse to the company’s legal entity.

As a result, it has been considered that no personal excessive and extraordinary burden was placed on the applicant for being held responsible for the public debts incurred due to the non-payment of the company’s social security contributions and the default interest.  It has been therefore concluded that the impugned interference with the right to property did not upset, to the applicant’s detriment, the fair balance to be struck between the public interest and the said right.

Consequently, the Court has found no violation of the right to property safeguarded by Article 35 of the Constitution.