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The information contained in this Newsletter is of a general nature and does not constitute legal advice |
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Non-contributory pensions. Annual supplements
Royal Decree 1400/2007 of 29 October 2007 establishes the rules for the granting of supplements for those who have non-contributory retirement and social security disability pensions and who reside in a rented house. (More information)
Seafarers. New guidelines for determining their retirement pension
Royal Decree 1311/2007 of 5 October changes the guidelines on the application of the reduction coefficient to determine the retirement pension of Merchant Navy employees from the current criterion of navigation area to the new one of type of vessel. (More information)
Health and safety at work. First aid kits provided by the Social Security
Order TAS/2947/2007 of 8 October establishes that companies will be provided with first aid kits by the Social Security and the mutual insurance entities. The cost of doing so will be assumed by the Social Security as it is considered that the kit is the first stage of the healthcare assistance that the Social Security must provide to employees. (More information)
2008 Work Calendar
The decision of 9 October 2007 of the General Labour Directorate approved the publishing of the work calendar and the public holidays for 2008. (More information)
Compulsory retirement. Justification of differences of treatment on grounds of age
The European Court of Justice in its judgment of 16 October 2007 holds that the termination of an employment contract owing to the employee reaching the normal retirement age does not constitute discrimination prohibited by Article 2 of Directive 2000/78/EC of 27 November because the Spanish law that makes it possible was passed in the framework of a national policy aimed at improving access to employment. (More information)
Industrial dispute on international assignment of employees. Judicial competence and applicable law
The decision of the Labour Chamber of the Supreme Court of 20 July 2007 resolved the appeal lodged by the Trade Union CC.OO., against the verdict of the Central Court of Appeal, which rejected the industrial dispute claim against two companies, one of Spanish nationality and the other of US nationality. (More information)
Controlling employees’ working hours. Use of new technologies does not infringe fundamental rights
A judgment of the Contentious-Administrative Chamber of the Supreme Court of 2 July 2007 considers that scanning employees’ palms with the aim of monitoring their compliance with their timetable does not breach their privacy and personal safety rights, or the right to the protection of personal data. (More information)
Individual dismissal for redundancy reasons. Failure to comply with formal requirements implies a null and void dismissal
The decision of the Labour Chamber of the Supreme Court, dated 18 April 2007 states that failure to deliver a copy of the dismissal letter to workers’ representatives will render the dismissal null and void. (More information)
Pension benefits. Termination of employment prior to the causation of the protected contingencies
A judgment of the Labour Chamber of the High Court of Madrid of 29 June 2007 (following a judgment of the Supreme Court of 31 January 2001) has held that employees cannot lose their right to the pension contributions made by their employer if their employment has been terminated prior to reaching retirement age. (More information)
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Non-contributory pensions. Annual supplements
Royal Decree 1400/2007 of 29 October 2007 on the rules for the granting of supplements for those who have non-contributory retirement and social security disability pensions and who reside in a rented house. State Official Gazette of 30 October 2007
This Royal Decree lays down the rules for the granting, processing and payment of annual pension supplements under article 40.2 of Law 42/2006 of 28 December on the 2007 State General Budget in favour of beneficiaries of non-contributory retirement and Social Security disability pensions. Such beneficiaries must evidence that they do not own any property and that their primary residence is a rented house, and the owner of the house must have no relationship with the pensioner up to the third degree of kinship. The Law also states that as regards family units where various beneficiaries of non-contributory pensions co-habit, only the holder of the lease, or if there are several, the first thereof, will be entitled to receive a supplement.
Seafarers. New guidelines for determining their retirement pension
Royal Decree 1311/2007 of 5 October, which establishes new guidelines for determining the retirement pension under the Special Regime of Seafarers. Spanish Official Gazette of 24 October 2007
In order to determine the reducing coefficient that is applied to the contribution base of employees of the Merchant Navy to calculate their retirement pensions, Royal Decree 1311/2007 establishes a new criterion. The reducing coefficient was previously determined according to the seafarer’s navigation area, but is now to be calculated according to the type of vessel on which the seafarer works. The Royal Decree sets out a list of different types of vessels and the reducing coefficient for each one, which may range between 0.2 and 0.4.
This new criterion is the same as that already being applied to fishing activities. The new system also simplifies the administration involved, as there is no longer any need to check the navigation area of every vessel. Finally, the level of legal certainty in this regard is increased as the same reducing coefficient applies to a vessel no matter where it sails.
Health and safety at work. First aid kits provided by the Social Security
Order TAS/2947/2007 of 8 October, which establishes that companies will be supplied with first aid kits in the event of a work accident as part of the protective action plan of the Social Security system. Spanish Official Gazette of 11 October 2007
Pursuant to annex VI.A).3 of Royal Decree 486/997 of 14 April, which establishes the minimum health and safety requirements that must be met in the workplace, the materials needed to provide first aid to injured employees must be available in every workplace, and in particular, a first aid kit containing the items specified in the Royal Decree.
This Order, which entered into force on 9 October 2007, establishes that the first aid kits referred to in the Royal Decree constitute part of the health care services provided by the Social Security and, therefore, will be supplied by the Social Security management bodies and the mutual insurance entities that cover professional contingencies on behalf of companies, and that the cost of the kits will be met by the Social Security.
2008 Work Calendar
Decision of 9 October 2007 of the General Labour Directorate sets out the work calendar and the public holidays for 2008. Spanish Official Gazette of 9 October 2007
The Ministry of Employment and Social Affairs has published the public holidays for 2008, which is based on the list of holidays submitted by the seventeen autonomous communities and the Autonomous Cities of Ceuta and Melilla.
Thus, apart from the holidays specific to each autonomous community, the following dates will be considered as public holidays throughout Spain: 1 January (New Year’s Day), 6 January (Epiphany), 21 March (Good Friday), 1 May (Labour Day), 15 August (Assumption of our Lady), 1 November (All Saints Day), 6 December (Spanish Constitution Day), 8 December (Immaculate Conception) and 25 December (Christmas Day).
Compulsory retirement. Justification of differences of treatment on grounds of age
Judgment of the European Court of Justice of 16 October 2007
The preliminary question asked by Labour Court number 33 of Madrid relates to Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation. Article 6.1 of the Directive establishes exceptions whereby Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.
In this case, the Madrid Labour Court questioned whether the principle of equal treatment regulated by Article 13 TEC and Article 2.1 of the Directive was breached by the Sole Transitory Provision of Spanish Law 14/2005 of 1 July (the “Provision”) on collective bargaining agreement provisions that refer to the reaching of normal retirement age. The Provision confirms the validity of clauses (in collective bargaining agreements adopted before Law 14/2005 entered into force) establishing the compulsory termination of the employment contract when the employee reaches normal retirement age if the worker has completed the minimum contribution period and satisfied the other requirements laid down in Social Security legislation to be entitled to a retirement pension under his/her contribution scheme. There is no requirement that the termination be expressly linked to a specific policy for the promotion of employment.
The ECJ holds that the less favourable treatment that the Spanish legislation offers employees who have reached normal retirement age compared with other people of working age and capacity does constitute a difference in treatment (and therefore discrimination) based directly on age. Nevertheless, the termination of an employment contract resulting from the application of the Provision would not amount to discrimination prohibited by Article 2 of the Directive, even though the Provision does not require that there be an express link between the compulsory retirement and a policy for the promotion of employment. The ECJ found that, given the context in which the Provision was passed, the Spanish law is part of a national policy aimed at facilitating access to employment by spreading employment across generations and reducing unemployment. Therefore, the Spanish law falls within the exceptions permitted in Article 6 of the Directive that aid the achievement of the objectives set out in Article 2 of the Treaty for the European Union and the TEC.
Industrial dispute on international assignment of employees. Judicial competence and applicable law
Decision of the Labour Chamber of the Supreme Court, dated 20 July 2007
This dispute resulted from the business practice between a Spanish company and a US company (both in the aeronautical sector) in which each company temporarily assigned employees to the other to provide services within the territory where each carried out their business activities.
The US company carried out the assignment of the employees by means of a collaboration agreement with the Spanish company. The US company committed to hire as many employees as agreed from time to time between the two companies, for the purpose of rendering services in the name of the Spanish company when operating in Europe. The Spanish company, on the other hand, assigned its employees by means of individual agreements granted upon application, by the employee, for a special “winter license”. Once this license was granted, the Spanish company and the employee would enter into an individual agreement which allowed the worker to render his/her services to the US company.
The claimant trade union claimed that the labour assignments between the two companies were illegal, and furthermore, that the court should recognise the right of the transferred employees to be deemed part of the permanent workforce of the transferor company or the transferee company. The first issue resolved by the Supreme Court was jurisdiction, specifically whether the court was the appropriate forum. The international law on jurisdiction must be born in mind in such situations. However, where it cannot be applied, the state law will apply, in this case article 25 of the Basic Law on Judicial Powers (“BLJP”).
In labour matters, this legal framework was created under the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters and, to a lesser extent, the Lugano Convention.
In this case, we must take into account the reference that EU Regulation 44/2001 makes to the national rules, obliging the Spanish judge to apply article 25 BLJP.
The second issue to be resolved was how to deal with the disparity between the competence of the Spanish courts to deal with the claim against the Spanish company, and the Spanish court’s lack of competence relating to the claim against the US company.
As regards the Spanish company, the national courts are presumed to have the appropriate competence regarding the Spanish employees displaced to USA, as well as the American employees displaced to Spain. In both cases, the domicile of the respondent is used as a reference when determining which court has jurisdiction. As regards the Spanish employees being displaced to the USA, the Spanish courts had jurisdiction as the employees habitually rendered their services in Spain.
The Spanish tribunal’s lack of legal competence in the claim against the foreign company (to whom the regulation cannot apply since its domicile is outside the EU) is supported by the fact that the company does not have contractual obligations with the Spanish company through a branch, agency or delegation in Spain.
The third issue considered by the court was regarding the applicable law for the Spanish employees rendering services in US territory. The Supreme Court concluded that Spanish law was applicable since the employees habitually rendered their services in Spain.
Regarding the American employees rendering his services in Spain, the Supreme Court also concluded that Spanish law applies, due to the application of the current doctrine of the Constitutional Court on the effect of lack of citation of, or evidence to suggest, the applicability of the foreign (in this case US) law.
The last issue considered by the Supreme Court was whether or not the two companies had illegally assigned the employees.
Regarding the Spanish employees who temporarily rendered services to the US company, the Court considered that there had not been an illegal assignment of employees because the parties were not trying to hide the identity of the company which was in fact rendering the services.
However, with regard to the US employees assigned to the Spanish company, the Court considered that they had been contracted by the US company specifically for the purpose of being assigned to the Spanish company, and although they were “received” by the Spanish company, it was the US company which continued to appear as if it were the employer with regards salary and Social Security payments, which indicated the existence of an illegal assignment.
Controlling employees’ working hours. Use of new technologies does not infringe fundamental rights
Judgment of the Contentious-Administrative Chamber of the Supreme Court of 2 July 2007
Two trade unions appealed a judgment of the High Court of Cantabria seeking to have it overturned on the grounds that a regional resolution that introduced a new system to control the hours worked by public-sector employees are null and void as they violate the employees’ fundamental rights of privacy and personal integrity, and the right to the protection of personal data.
The system in question is harmless from a health point of view. It consists of taking a biometric reading of the hand using a scanner. The scanner transforms the three-dimensional image in an algorithm called a “template”. This template is recorded in a database that enables the employees to be identified and therefore the hours they work to be monitored.
The Supreme Court (“SC”) held that this system does not breach the personal or moral integrity rights of the employees as they are not encroached upon against their will or physically or morally harmed. Nor did the SC find that the employees’ right to health had been breached as the appellants did not submit evidence of the same. Furthermore, the SC held that provided that the purpose of this system is to monitor the hours worked by the employees, and given that the employees are obliged to adhere to a timetable, the system cannot be considered an illegitimate interference in the employees’ right to privacy and therefore it is not necessary to obtain their consent beforehand.
The SC added that the novelty or complexity of the system is not in itself sufficient reason to find that it breaches fundamental rights, and that the use of this technology is acceptable given that there is no rule that prohibits the same.
Individual dismissal for redundancy reasons. Failure to comply with formal requirements implies a null and void dismissal
Decision of the Labour Chamber of the Supreme Court, dated 18 April 2007
When carrying out an individual dismissal based on redundancy reasons, the employer did not provide a copy of the dismissal letter to the company employee representatives, as required under article 53 of the Statute of Workers (“SW”) which sets out the need to provide employee representatives with copies of the “prior written notice of dismissal” pursuant to article 52 c) SW (job cuts for redundancy reasons).
The Supreme Court was asked whether failure to deliver a copy of the letter of dismissal to the employee representatives, can be considered a breach of the legal formalities provided under article 53 SW.
The Supreme Court concluded that there was an error in the drafting of article 53 SW since the copy to be provided to employee representatives, should not be a copy of the prior notice, but rather of the dismissal letter. Therefore, the requirement for the provision of information to union representatives under article 53.1.c) SW relates to the notice of dismissal referred to in paragraph a) of the provision. This letter should set out the cause of dismissal as well as references to the prior notice granted and the availability of compensation.
The prior notice need not be included in the documentation provided to the employee representatives regarding the employee’s dismissal since it is given to the latter for the sole purpose of looking for a new job. The Supreme Court draws this conclusion because it is necessary to inform employee representatives about dismissals for economic reasons. This is because without such information the representatives would have serious difficulties in verifying that the company is making correct use of the channels available to individual dismissals on economic grounds and, consequently, in avoiding the misapplication of individual (as opposed to collective) dismissals to greater numbers of employees than permitted under article 51.1 SW, which would render the dismissal null and void.
Pension benefits. Termination of employment prior to the causation of the protected contingencies
Judgment of the Labour Chamber of the High Court of Justice of Madrid of 29 June 2007
This judgment concerns an appeal filed by an employee of a bank on the grounds that he should be entitled to the pension contributions that had been made by his employer even though he had been dismissed before becoming entitled to draw his pension.
The collective bargaining agreement for the banking sector made provision for certain additional benefits that were payable in the event that an employee became ill, suffered a total or absolute permanent disability, retired or died. These benefits were guaranteed by an insurance contract. However, this contract did not regulate the situation in which an employee’s employment was terminated for other reasons.
The High Court of Justice of Madrid (hereon “HCJM”) held that the employee should not lose his right to these additional benefits because that would be contrary to the nature of the provisions of the collective bargaining agreement and mean that the receipt of the benefits would depend exclusively on a unilateral decision of one of the parties, such as a decision of an employer to dismiss an employee. Moreover, as the dismissal in this case was unfair and the employee was not responsible for this situation, it is unfair that he should be deprived of the benefits.
In its decision the HCJM refers to the judgment of the SC of 31 January 2001 (the “Caixa case”) in which it held that, as the additional benefits are a voluntary improvement of those offered by the Social Security, in accordance with their aim and the principles of labour law, once the improvements have been established, they cannot be lost if provision has not been made for the same in the document in which they are created.
Despite the above, in later judgments the SC changed its doctrine and held that additional benefits are subject to the provisions of collective bargaining agreements and, therefore, employees must consult them to verify the conditions under which the benefits can be enjoyed.
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The information contained in this Newsletter is of a general nature and does not constitute legal advice