Octubre 2008
LABOUR
LAW
1. Dismissal based on illness is not discriminatory
The judgment of the Constitutional Court, dated 26 May 2008, declares
that dismissal based on illness is not discriminatory when the employer
dismisses the sick employee due to his/her incapacity to do his/her work.
In these cases, when there are no signs of discrimination, the dismissal
may be considered fair or unfair, but not void. (More
information)
2. Unfair dismissal: term for readmission against term for
reinstatement to the previous position
The Supreme Court in its judgment dated 23 July 2008 resolves a
conflict between two contradictory judgments regarding the legal
requirements for the readmission of a dismissed employee when the
dismissal has been declared unfair and the employer has opted for
readmission. The Supreme Court upholds that when the term given by the
employer to the employee for the reinstatement in his/her former job
position is shorter than the legally established term (three days), such
legal term of will apply. (More information)
3. Adjustment of the working day to care for a disabled child. It is
unfeasible if the reduction of working time is not requested
The Supreme Court rejects the appeal submitted by a female employee
who requested a modification of her working day to care for her disabled
child. The Supreme Court upheld that article 37.5 of the Spanish Statute
of Workers could not be applied in this case as the employee did not
request a reduction of the working time for such purposes, but only an
adjustment of such working time. (More information)
4. Temporary employment contract to perform specific work. Transfer
of outsourcing agreements
The judgment of the Supreme Court dated 17 June 2008 which applies
the doctrine of transfer of outsourcing agreements, upholds the decision
that the term of temporary employment contracts depends on the length of
the outsourcing agreement, and therefore, these do not conclude until
the outsourcing agreement ends. (More information)
5. Individual dismissal based on economic reasons
The Supreme Court, in its judgment dated 11 June 2008, declares that
in the event of redundancy for economic reasons, it is only necessary to
evidence the existence of substantial and considerable economic losses,
and therefore, it is not necessary to evidence that the redundancies
would mean overcoming the relevant difficulties of the employer.
(More information)
6. Salary accrued from the date of dismissal to the notification
date of the ruling (back pay accrued during dismissal proceedings).
Effect on the profits obtained from stock options
The Supreme Court analyses, in its judgment dated 16 May 2008, back
pay accrued during dismissal proceedings. The Court emphasised the
difference between insufficient allocation of the severance payment due
to a justifiable mistake and its insufficient allocation due to an
unjustifiable mistake or negligence. The Supreme Court established that
the company’s behaviour was correct in the case in question, as the
mistake made in the allocation of the profits on the stock options was
totally justifiable, and in addition, the company rectified the mistake
in a later allocation. Therefore, the company could not be penalised to
pay salaries accrued during the proceedings. (More
information)
7. Equality between women and men. Promotion
The Labour Court number 7 of Zaragoza confirmed a sanction imposed on
a credit entity by the Provincial Labour Inspectorate of Zaragoza, based
on the company’s system of promotion which discriminated against women.
(More information)
1. Dismissal based on
illness is not discriminatory
Judgment 62/2008 of the First Chamber of the Constitutional Court,
of 26 May
This judgment considered a case of disciplinary dismissal based on
the breach of contractual good faith. The dismissed employee concealed
from the company the illness which prevented him from working. If the
employee had made the company aware of his illness he would not have
been hired.
The Labour Court declared the dismissal unfair. The employee appealed
to the High Court of Justice against this decision, requesting the
nullity of the dismissal as he believed it was discriminatory. However,
the High Court of Justice upheld the decision of the Labour Court,
declaring the dismissal unfair but not void.
The employee appealed to the Constitutional Court, requesting the
nullity of the dismissal as it breached the right to equality and the
right not to be discriminated against on the grounds of health.
The Constitutional Court found that the company had dismissed the
employee because his illness meant he was unable to work. Therefore,
this kind of dismissal is not discriminatory, it may be considered fair
or unfair, depending on the specific circumstances, but not void.
2. Unfair dismissal: term
for readmission against term for reinstatement to the previous position
Judgment of the Labour Chamber of the Supreme Court, dated 23 July
2008
In this decision, the Supreme Court examined the dismissal of an
employee, which was declared unfair. The employer opted to readmit the
employee to his previous position. The employer subsequently informed
the employee that he had to return to his position within 24 hours. As a
consequence, the employee requested the enforcement of the judgment in
order to be indemnified as he considered that the term to return to his
position was illegal, on the basis that it was shorter than the legally
established term. The Court declared that the labour relationship had
come to end due to inappropriate readmission. The company appealed
against this decision to the High Court, which overturned the decision
of the Labour Court and rejected the request for enforcement.
The employee appealed to the Supreme Court that rejected the appeal,
stating that there is a difference between the term of 10 days to
communicate the option to readmit the employee, and the term provided by
the employer for the employee to return to their previous position. The
breach of the former term would imply the failure of the readmission and
the payment of the severance to the employee. However, if the second
term is breached and is shorter than the legally established three day
term, the latter term will apply, and this would not be considered a
failure to readmit.
3. Adjustment of the working
day to care for a disabled child. It is unfeasible if the reduction of
working time is not requested
Judgment of the Labour Chamber of the Supreme Court, dated 18 June
2008
This judgment is based on the request of an employee to adapt her
working time to care for her disabled child, without requesting a
reduction of working time.
The Labour Court rejected the claim, on the basis that the employee
did not request the reduction of working time, but rather, an adjustment
of her working day. The employee appealed to the High Court of Justice,
but this upheld the decision of the Labour Court. The employee
subsequently appealed to the Supreme Court, which considered that, if
the employee’s claim were upheld, it would mean that professional and
personal life could be combined better, but would constitute a breach of
article 117 of the Spanish Constitution. The reason for this is that the
interpretation of article 37.5 of the Statute of Workers (the “SW”) does
not imply a breach of the Government’s duty to ensure social welfare and
family protection, as the modification of working time is not comparable
to the reduction of working time established in article 37 of the SW.
It should be noted that two Supreme Court judges gave a dissenting
opinion in this judgment.
4. Temporary employment
contract to perform specific work. Transfer of outsourcing agreements
Judgment of the Labour Chamber of the Supreme Court, dated 17 June
2008
In this judgment, the Supreme Court analyses a case of transfer of
outsourcing agreements and the subsequent termination of the temporary
employment contracts linked to them. In this case, when the outsourcing
agreement ended, the temporary employment contracts linked also
concluded. After several days, the employer proposed an extension of the
employment contract, but the claimant employee did not accept. At a
later date, the outsourcing agreement was awarded to the same company,
and this company again hired all the employees of the first outsourcing
agreement, except for the employee who did not sign the extension.
The claimant employee claimed that her employment contract had not
terminated, even though she did not sign the extension since, according
to the doctrine of the transfer of outsourcing agreements, such transfer
implies a degree of continuity.
The appeal judgment rejected the arguments of the employee as the
court upheld that if the outsourcing agreement ended, the temporary
employment contracts linked to the outsourcing agreement would also come
to an end.
However, the Supreme Court upheld that the Labour Court had to apply
the doctrine of transfer of outsourcing agreements, since the term of
the temporary employment contracts depended on the term of the
outsourcing agreement, and this had not ended.
5. Individual dismissal
based on economic reasons
Judgment of the Labour Chamber of the Supreme Court, dated 11 June
2008
In this judgment, the Supreme Court analyses the justification of the
economic reasons which allow companies to make employees redundant.
In this case, the Labour Court declared a dismissal unfair which was
based on the company’s economic losses and the need to make lays off.
The Court held that although the economic losses had been evidenced, the
reduction of staff expenses did not justify the employee’s dismissal, as
this did not help improve company profits. The High Court of Justice
upheld the decision of the Labour Court.
The Supreme Court declared that the appeal judgment had not followed
the doctrine of the Supreme Court in this kind of cases. This doctrine
establishes that it is only necessary to evidence economic losses and
not that the dismissal helps to overcome difficulties; the burden of
proof as to whether the measures taken were appropriate to combat the
crisis does not rest on the company.
6. Salary accrued from the
date of dismissal to the notification date of the ruling (back pay
accrued during dismissal proceedings). Effect on the profits obtained
from stock options
Judgment of the Labour Chamber of the Supreme Court, dated 16 May
2008
In this judgment, the Supreme Court analysed the effect on the
profits obtained from stock options when calculating the statutory
severance payment for unfair dismissal.
In the case at hand, the employee exercised stock options the day
after he was dismissed; these stock options had been consolidated three
days prior to the dismissal. The company acknowledged that the dismissal
was unfair and made the requested judicial deposit of the severance
payment in order to avoid the payment of salaries during the proceedings,
but such severance did not include the amount corresponding to the
profits on the stock options. However, several days later the company
deposited the additional amount for reasons of caution.
The employee brought a claim against the company before the Labour
Court, requesting that the company include the amount corresponding to
the stock options in the severance payment and the payment of salaries
from the termination date. The Court rejected the employee’s request, as
the employee exercised these options one day after the dismissal. The
employee appealed against this decision before the High Court of Justice,
which accepted the request. This amount was included in the severance
payment, and imposed on the company was ordered to provide the back pay
accrued during the dismissal proceedings.
The company appealed to the Supreme Court, which analysed the amount
allocated to the company. The Supreme Court emphasised the difference
between an incorrect deposit due to a justifiable mistake and incorrect
deposit due to an unjustifiable mistake or negligence. In the first
case, exoneration of paying salaries accrued during the dismissal
proceedings is possible, while in the second case it is not.
The Supreme Court held that the company’s behaviour was appropriate,
since the initial mistake in the amount deposited was justifiable.
Furthermore, the company rectified the mistake. Therefore, in this case,
it was decided that the payment of back pay accrued during the dismissal
proceedings should not be imposed to the company.
7. Equality between women
and men. Promotion
Judgment of the Labour Court number 4 of Zaragoza, dated 11
September 2008
The Labour Court number 4 of Zaragoza analysed and confirmed a fine
imposed on a credit entity by the Provincial Labour Inspectorate, based
on the company’s system of promotion which discriminated against women.
Employees for the highest positions were freely chosen by taking into
account the length of services and merits of the employee. However, a
clear majority of men held the highest positions.
The Court held that the employer’s promotion system was indirectly
discriminatory, and although it was apparently neutral, it put women at
a disadvantage with regard to men. Therefore, the Court decided that the
credit entity’s promotion system was discriminatory.
