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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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Labour reinsertion. State aid for the textile and tailoring sector
Royal Decree 5/2008 of 11 January 2008 sets out measures to help the workers from the textile and tailoring sector adapt to the structural changes occurring in the global market. (More information)
Financially dependant self-employed workers. Affiliation and registration with the Social Security
The General Treasury of the Social Security issued a resolution providing guidelines for the correct affiliation and registration of financially dependant self-employed workers with the special regime of the Social Security for self-employed workers. (More information)
Mandatory leave of absence. Public office
According to the Labour Chamber of the Supreme Court of 18 September 2007, the appointment of an employee as manager of a municipal corporation (Sociedad Anónima Municipal) does not entitle her to mandatory leave of absence in her former employment. (More information)
Employment agreement termination. Additional compensation
The judgment of the Supreme Court of 20 September 2007 acknowledged the right of an employee to additional compensation for breach of fundamental rights in proceedings for the termination of a labour relationship. In this case, the employer did not comply with its obligation of properly evaluating the prevention of potential risks at work. (More information)
Vacation time and temporary disability
The decision of the Labour Chamber of the Supreme Court of 3 October of 2007 establishes that an employee may not benefit from vacation time when a period previously agreed upon for that purpose coincides with the temporary disability of the employee. (More information)
Age discrimination. Collective dismissal
In its judgment of 17 October 2007, the Contentious-Administrative Chamber of the Supreme Court held that it is reasonable to use age criteria in collective dismissals given that this has a lesser/minor damaging effect on work. (More information)
Unfair dismissal. Calculation of severance payment
The judgment of the Labour Chamber of the Supreme Court of 31 October 2007 held that the severance payment for unfair dismissal must be calculated on a monthly and not a daily basis for periods of less than one year. (More information)
Pension plans. Legal capacity of insurance companies to be sued
The decision of the Labour Chamber of the Supreme Court of 3 October 2007 established that insurance companies, as administrative entities of pension plans, can be sued before labour courts in proceedings involving the supplementary benefits of a pension plan. (More information)
Declaration of dismissal as unfair but not void. Temporary disability of an employee
The judgment of the Labour Chamber of the Supreme Court of 22 November 2007 held that the dismissal of an employee while suffering from temporary disability was unfair but not void as the employee’s rights to equality, non-discrimination, dignity and physical integrity were not violated.
In this regard, the plenary session of the Labour Chamber of the High Court of Justice of Madrid in its judgment of 4 December 2007, changed the criteria adopted in previous cases, declaring that the decision of the company to dismiss an employee on grounds of excessive sick leave or actions against the company’s economic or production interests, did not constitute a detriment of the employee’s right to physical integrity or dignity. Nevertheless, there have been several dissenting opinions within the Labour Chamber regarding this judgment. (More information)
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Labour reinsertion. State aid for the textile and tailoring industry
Royal Decree 5/2008 of 11 January 2008 sets out measures to help workers from the textile and tailoring sector adapt to the structural changes occurring in the global market. Official Spanish Gazette of 24 January 2008
Royal Decree 5/2008 of 11 January 2008 (the “RD”) is applicable to employees of companies that are subject to the collective bargaining agreement of the Textile and Tailoring Industry. The purpose of the RD is to establish measures for the reinsertion of workers in this industry into the labour market and to set up special assistance for employees aged 55 or over that may have problems finding employment.
According to the RD, surplus labour includes any employee whose employment agreement has been terminated as a result of a collective dismissal procedure for economic, technical, organisational or productive reasons, or for the dismissal reasons set out in article 52 c) of the Statute of Workers. The employee must also meet the requirements established in the RD in order to benefit from the different types of subsidies available from the State Employment Public Service budget.
The following are some of the measures facilitating labour reinsertion from the sector:
(i) Subsidy during the job search: a monthly amount of EUR 350 for employees taking part in professional career advisory activities. The maximum period that an affected worker may benefit from the subsidy is three months (six months for workers aged 55 or over). Alternatively, a grant of EUR 10 for each day of tuition will be available for affected workers that attend professional retraining courses.
(ii) Subsidies to facilitate geographic mobility: granted to workers whose employment contract requires geographic mobility. This subsidy is granted for expenses in which a worker incurs when relocated, or in order to compensate for salary differences when the base salary of the new employment agreement within the same sector is less than that of the previous employment agreement.
(iii) Subsidies for reinsertion into the labour market: available to employees aged 52 or over with at least six years’ experience in the sector and whose new employment agreement implies a salary decrease, following the abovementioned criteria.
(iv) Special subsidies for employees aged 55 or over: available to employees who have taken advantage of unemployment benefits and who have at least six years’ experience in the sector. These employees may receive a subsidy of an annual amount of up to EUR 3,000 from the moment unemployment benefits have ended and two years have elapsed since the termination of the labour relationship. The subsidy for workers who have not found employment within two years from the conclusion of unemployment benefit will increase up to an amount of EUR 2,500. Moreover, these employees may enter into a special agreement with the Social Security using the same contribution base that has been considered for the calculation of the unemployment benefits.
(v) Subsidies to promote self-employment: this subsidy is governed by Order TAS/1622/2007 of 5 June.
Financially dependant self-employed workers. Affiliation and registration with the Social Security
Resolution of 16 January 2008 of the General Treasury of the Social Security on the implementation guidelines for the classification of financially dependant self-employed workers within the special regime of the Social Security for self-employed workers. Official Spanish Gazette of 31 January 2008
The affiliation of financially dependant self-employed workers with Social Security and initial and successive registrations, cancellations and modifications of data with the special regime of the Social Security for self-employed workers will be carried out in accordance with the general regulations governing company and employee registration, affiliation, cancellation and modification of data with Social Security. Nevertheless, the following particularities apply:
(i) Applications will be made by means of a statement by the relevant employee that he/she satisfies the conditions of economically dependant self-employed workers, indicating the client on which he/she is dependant.
(ii) The registration of these employees will determine the mandatory coverage and contributions for temporary disability benefits resulting from common illnesses or labour and non-labour accidents.
Mandatory leave of absence. Public office
Judgment of the Labour Chamber of the Supreme Court of 18 September 2007
In this case, an employee claimed that she was entitled to mandatory leave of absence within the employment relationship on the basis of having been appointed manager of a municipal corporation, which the employer company rejected.
Pursuant to article 46.1 of the Statute of Workers, a mandatory leave of absence will be granted where an employee occupies a public office and as a consequence cannot attend work. In this regard, public office will be considered a temporary and impermanent political position to which one is voted in, assigned or appointed by the relevant authority and not a permanent or professional position.
However, in the case at hand, the claimant had entered into a senior executive employment relationship, having been hired as manager of a corporation according to private law rules. Thus, the Supreme Court (“SC”) has declared that she was therefore not appointed by the relevant authority to occupy a public office as established under article 46.1 of the Statute of Workers and thus was not entitled to the leave requested.
Employment agreement termination. Additional compensation
Judgment of the Labour Chamber of the Supreme Court of 20 September 2007
The claimant was the only employee of the City Council (Ayuntamiento) rendering services in a municipal library. She was assaulted several times by a minor, as a result of which she suffered post-traumatic stress that rendered her temporarily disabled for six months.
The City Council thus hired the services of a security company during the following six months. Despite a petition by the trade union, the City Council did not re-hire the security service. Subsequently, the employee suffered a new assault, causing her to relapse into a state of temporary disability.
According to the employee’s claim, the labour authority ordered the City Council to include the risk of further potential assaults in its evaluation of risk and hazards prevention and in its preparation of precautionary measures. The City Council did not comply with this requirement.
The employee brought a claim against the City Council requesting the termination of her employment relationship in accordance with article 50 of the Statute of Workers and requested additional compensation for the damage caused by the City Council by failing to prevent the assaults through a proper evaluation of the prevention of potential risk and hazards.
The judgment of the SC of 20 September 2007 acknowledged the right of the employee to additional compensation for breach of the fundamental right to physical integrity. It determined that in the case at hand the employer had not complied with its obligation of properly assessing the prevention of potential risks.
Vacation time and temporary disability
Judgment of the Labour Chamber of the Supreme Court of 3 October 2007
The Labour Chamber of the SC analyses whether or not the temporary disability of an employee during a period previously agreed upon for the enjoyment of holidays enables the employee to designate different holiday periods within the year.
In the case at hand, the vacation period designated by the claimants coincided with their temporary disability. Once their condition of temporary disability ended, the claimants requested that they be able to designate a different period as vacation time. The company rejected this request on the basis that the claimants’ vacation time had elapsed.
The SC declared that free and rest time are compatible with the temporary disability of an employee. Therefore it held that, as the claimants were not present at work, they did not require additional vacation time to compensate for the accumulated fatigue associated with the rendering of services.
The SC noted that the Statute of Workers does not expressly deal with this issue.
Therefore, the SC rejected the appeal for the unification of criteria filed by the claimants and also rejected their request to benefit from holidays during a period other than that which was previously agreed upon with the company.
Age discrimination. Collective dismissal
Judgment from the Contentious-Administrative Chamber of the Supreme Court of 17 October 2007
The multi-plant workers’ committee of the company appealed the resolution of the General Directorate for Labour approving the termination of 143 employment contracts before the Contentious-Administrative Chamber of the SC. The employee representatives maintained that the resolution was discriminatory based on age in consideration of the fact that the only criteria on which the resolution was based was age, thus in violation of article 14 of the Spanish Constitution in connection with articles 4.2 c) and 17 of the Statute of Workers.
The SC stated that this issue had been previously resolved by the Contentious-Administrative Chamber’s judgment of 15 June 2005 stating that the principle of equality not only demands an objective justification for the divergent treatment but must also pass a constitutional test of proportionality as among the measures adopted, the resulting consequences and the intended purpose.
The SC concluded that, as the difficulties of the company and the economic and organisational reasons causing these difficulties were acknowledged by the parties, it was necessary to reduce and adapt the workforce of the company by developing a set of measures to resolve the structural excesses within the company. Nevertheless, the measures had to cause, as far as possible, minimum harm to the collective employment of the company and to the employees affected by the resolution. The Supreme Court held that the measures taken by the company fulfilled these requirements and were not groundless, irrational or subjective.
Unfair dismissal. Calculation of severance payment
Judgment of the Labour Chamber of the Supreme Court of 31 October 2007
The Labour Chamber of the SC analysed whether a severance payment for services rendered during a period of less than one year for unfair dismissals should be calculated on a monthly or daily basis.
The employee had been rendering services for the company for a period of one month and eight days when the company notified him of his disciplinary dismissal on the basis of a continuous decline in the services rendered by him. The company acknowledged that the dismissal was unfair and deposited the relevant severance payment (equivalent to 45 days of salary per year of work) within the labour court, following the applicable procedure, as calculated according to the exact number of days that the employee had been rendering services.
Pursuant to article 56 of the Statute of Workers, in the event of unfair dismissal, the employee will receive: “A severance payment equivalent to 45 days of salary per year of service, to be calculated on a monthly basis for periods of less than one year, with a maximum limit of 42 months.”
Taking a literal interpretation of article 56.1 a) of the Statute of Workers, the SC stated that, regardless of the number of days that the employee actually worked during his last month of employment, the severance payment should nevertheless be calculated on a monthly basis and as a whole month. As such, the appropriate severance payment should be calculated as if the employee had rendered services for two months.
Pension plans. Legal capacity of insurance companies to be sued
Judgment of the Labour Chamber of the Supreme Court of 19 November 2007
The Labour Chamber of the SC analysed the legal capacity of insurance companies to be sued before labour courts in proceedings involving supplementary benefits of a pension plan in favour of the employees of a savings bank (caja de ahorros).
The savings bank terminated the employee’s labour relationship by means of an objective dismissal which the former acknowledged as unfair. The employee was subsequently declared to be suffering total permanent disability.
At the time of the employee’s dismissal, the savings bank had in place a voluntary labour plan in addition to the protective measures of the Social Security. These supplementary measures were improved and substituted by means of the implementation of a pension plan in favour of the employees of the savings bank. The employee claimed the supplementary benefits corresponding to total permanent disability.
The SC held that the insurance company had the legal capacity to be held liable for the supplementary Social Security benefits. The SC made a clear distinction between the legal capacity to be sued before labour courts and potential liability. The SC declared that the bank should not be considered liable in these types of proceedings, since the bank had made the relevant contributions to the pension fund in order to guarantee the supplementary benefits claimed in the proceedings.
Declaration of dismissal as unfair but not void. Temporary disability of an employee
Judgment of the Labour Chamber of the Supreme Court of 22 November 2007 and judgment of the Labour Chamber of the High Court of Justice of Madrid of 4 December 2007
These two judgments analysed whether or not a dismissal in the abovementioned circumstances must be declared void or unfair, in view of the unjustified termination of an employment agreement.
The judgment of the SC unified criteria concerning dismissal during the temporary disability of an employee. The SC declared such a dismissal to be unfair but not void as the employee’s rights of equality, dignity and physical integrity had not been violated.
The dismissal in the case heard by the SC occurred while the employee was suffering from temporary disability as a result of a heart attack. The High Court of Justice of Madrid (the “HCJ Madrid”) declared the dismissal to be void on the basis of previous judgments, as it held that the company’s measure violated the employee’s rights to health and dignity.
However, in the appeal for the unification of criteria, the SC held that: (i) the right to equality enshrined in article 14 of the Spanish Constitution had not been violated, as an illness that makes it impossible to attend work is not a discriminatory factor within the strict understanding of such right; (ii) the right to physical integrity contained in article 15 of the Spanish Constitution had not been violated, as dismissal does not cause harm to the physical health of an employee. In addition, the SC declared that the dismissal is not linked to the employee’s state of health and that there had been no violation of the employee’s right to dignity (protected by article 10.1 of the Spanish Constitution), as the latter is not a fundamental right which ought to be protected.
For the abovementioned reasons, the SC declared the dismissal that took place during the temporary disability of the employee as unfair but not void.
The HCJ Madrid then followed the above criteria in a subsequent judgment dated 4 December 2007.
In this case, the employee filed an appeal against the ruling issued by the labour court, which had rejected the voidness of the dismissal but had declared it unfair. The labour court understood that the company’s decision to dismiss an employee based on the fact that the employee was suffering from temporary disability did not constitute discrimination.
The employee cited articles 10 and 15 of the Spanish Constitution, and relied on the doctrine of two judgments of the Labour Chamber no. 2 of the HCJ of Madrid, which had declared void the dismissal of employees suffering from temporary disability for breach of article 15 of the Spanish Constitution.
The employee alleged that the dismissal affected her fundamental right to physical integrity and dignity, based on the dismissal letter which stated that during the last period the actual rendering of services by the employee was very short, since in the year and a half between her medical discharge in March 2005 and the dismissal date the employee had not rendered services for over eleven months, thus her level of productivity and efficiency was lower than that of her colleague.
The HCJ Madrid, in modifying the criteria followed by the Chamber in previous judgments, stated that the right to physical integrity initially protects persons from any physical acts against the person, when there is a serious and clear danger to health, or when these acts take place without the consent of the relevant person. Moreover, the constitution has extended the protection to circumstances involving non-physical acts (e.g., company decisions) that fail to meet the legal requirements imposed on the company regarding the prevention of occupational hazards. For these reasons, the HCJ Madrid declared that a company’s decision to dismiss an employee suffering from temporary disability did not violate that employee’s right to physical integrity. Moreover, it could not conclude that such a termination measure put in serious and clear danger the continuity of the medical treatment or health of the employee.
Finally, the HCJ Madrid stated that it is excessive to link human dignity to a dismissal based on grounds of illness. While such a dismissal is clearly unfair, as are many other terminations in which the law is violated, there are compensatory mechanisms that may be used against the infringing company which are not considered contrary to human dignity and therefore do not require the dismissal to be declared void. The judgment further highlighted the fact there are no rules, be they international or community in scope, establishing that a dismissal based on grounds of illness necessarily violates such constitutional right. Moreover, the judgment referred to the legal possibility of terminating the employment contract for reasons of absenteeism, even if this is caused by temporary disability.
It is important to stress that there have been dissenting opinions as to the interpretation and content of this judgment. Nevertheless, in light of the abovementioned judgment of the SC, it would seem that the judicial approach on this matter has been clarified.
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The information contained in this Newsletter is of a general nature and does not constitute legal advice