CEOs in commercial companies are subject to the labor law or not?
Considering the fundamental differences between the relationship between the “CEO” and the “Company” and the employment relationship subject to labor law on the one hand, and the similarities between the said relationship and the power of attorney contract in civil law on the other hand, which can be considered as some of the following He pointed out these differences and similarities:
a) Differences between the work relationship subject to the work contract and the legal relationship between the CEO and the business company;
– The employment contract is one of the remuneration contracts and in it the wage (wage or salary) constitutes the main and fundamental part of the contract, while the “CEO” in commercial companies can perform his duties for free (Article 124 and the opposite meaning of the section the end of Article 134 of the Trade Law).
According to Article 134 of the Commercial Law, the “CEO” is also responsible to third parties, while in the labor contract, due to the worker’s obedience to the employer, such responsibility does not exist and the worker is only responsible to the employer.
– The management of the managing director continues even after the expiration of his mandate until the selection of a new manager (Article 136 of the Commercial Law), while in the employment contract, upon the expiration of the term, the contract is terminated and the worker no longer has any obligations towards the employer (Clause “D” » Article 21 of the Labor Law).
– The CEO can be dismissed either by the board of directors or by the database (note to Article 124 and Article 127 of the Trade Law), while the employer is deprived of such a right in the employment contract (Article 25 of the Labor Law).
b) The similarities between the attorney contract and the legal relationship between the CEO and the commercial company:
– The power of attorney contract may be free or paid (Article 659 of the Civil Code) and the performance of the duties of the managing director may also be free as mentioned above.
– In a power of attorney contract, one of the parties appoints the other party as his representative to do something (Article 656 of the Civil Code). Article 125 of the Commercial Law declares the CEO as the representative of the company and has the right to sign on behalf of the company.
– The client can dismiss the lawyer whenever he wants (Article 679 of the Civil Code). In the case of the CEO, the note of Article 124 of the Commercial Law has given the authority to dismiss the CEO to the company’s board of directors.
It seems that the relationship between the CEO and the business company is not the subject of the labor law and his responsibility towards the company is the same as that of the lawyer towards the client. In addition, in the legal bill related to the appointment of a manager or temporary managers to head production, industrial, commercial, agricultural and service units, both public and private sectors, approved on 4/23/59, the Islamic Revolution Council also states that the responsibility of the manager of each unit The unit is the same as the responsibility of the lawyer in front of the client, and since it does not seem that the managers of the units covered by the aforementioned law have any characteristics in comparison with the managers of the commercial units, in terms of the unity of the criteria, the aforementioned ruling can be extended to the recently mentioned managers as well.
This post is written by shadmanamini