The information contained in this Newsletter is of a general nature and does not constitute legal advice


February 2009

 

LABOUR LAW NEWSLETTER

 

1. European Union. Social security schemes applicable to posted workers

Commission Regulation no. 120/2009, of 9 February 2009, amends annexes 2 to 5 of Regulation no. 574/72 laying down the procedure for implementing Regulation no. 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community. (More Information)

 

2. Creditors’ meeting. Surcharges for outstanding social security contributions are considered subordinate in cases of creditor insolvency

The decision of the Supreme Court dated 21 January 2009 held the surcharges to be subordinate because of their punitive nature on the basis that they fall under the scope of “other monetary sanctions” of section 4 of article 92 of the Insolvency Law. (More Information)

 

3. Probationary period and temporary disability. Valid termination by the employer

In its ruling of 12 December 2008, the Supreme Court ruled on the termination of an employment during a probationary period. The Supreme Court found that the extension did not restrict the employer’s right to discontinue the contract and the termination of the agreement by the employer was therefore not abusive or discriminatory. (More Information)

 

4. Conciliation claim. Consequences for the calculation of the limitation period for dismissal claims

The High Court of Justice of Castilla-La Mancha’s ruling dated 4 December 2008 analysed the consequences of filing a settlement proceeding on the limitation period for filing a claim for dismissal. (More Information)

 

5. Reduction of working hours for legal guardianship. Reduction must be adjusted to the nature of the services

In its ruling of 30 January 2008, the Labour Court number 6 of Madrid dismissed a claim filed against a company’s decision to deny a reduction of working hours for legal guardianship. The Labour Court found that the reduction of working hours by excluding Saturdays was unfeasible on the basis that Saturdays were the days on which the company did most of its business. (More Information)


1. European Union. Social security schemes applicable to posted workers

Commission Regulation no. 120/2009, of 9 February 2009, amending Council Regulation no. 574/72 laying down the procedure for implementing Regulation no. 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (Official Journal of the European Union of 10 February 2009)

Commission Regulation no. 120/2009, which came into force on 2 March 2009, amends annexes 2 to 5 of Regulation no. 574/72 upon the request of some Member States or their competent authorities.

The amendment sets out the authorities responsible for ensuring that social security regulations are implemented in accordance with Community law, after certain Member States had made designations for this same purpose.

 

2. Creditors’ meeting. Surcharges for outstanding social security contributions are considered subordinate in cases of creditor insolvency

Judgment of the Civil Chamber of the Supreme Court dated 21 January 2009

In this appeal lodged by the General Treasury of the Social Security (“GTSS”), the Supreme Court (“SC”) examined whether surcharges for social security contributions that remained outstanding after the established payment term should be considered subordinate in cases of creditor insolvency.

The GTSS did not consider the surcharges subordinate given that they did not fall under the six requirements listed in article 92 of the Insolvency Law. Moreover, it considered them not to be punitive in nature, but rather as part of the contributions themselves.

In contrast, the SC held the surcharges to be subordinate precisely because of their punitive nature on the basis that they fall under the scope of “other monetary sanctions” of section 4 of article 92 of the Insolvency Law for the following reasons:

(i) the “monetary sanction” should be interpreted broadly;

(ii) the surcharge in question was an improper sanction because it operates as a penalty for the debtor;

(iii) the language of the Social Security Law regarding the resources of the Social Security links surcharges with sanctions.

 

3. Probationary period and temporary disability. Valid termination by the employer

Judgment of the Labour Chamber of the Supreme Court dated 12 December 2008

In this case, the SC ruled on the termination of an employment during a probationary period. The claimant had entered into a fixed six month term agreement with a company as a temporary employee including a 60 day probationary period. The company decided to terminate the agreement while the employee was on leave for temporary incapacity caused by general illness on the basis that the probationary period was unsuccessful.

The claimant alleged a violation of article 14.3 of the Statute of Workers (“SW”), which states that “the probationary period is suspended when the employee is on leave for temporary incapacity, maternity and adoption and foster care, provided that the parties so agree”.

The SC reiterated its view that the provision in article 14 of the SW to discontinue the agreement during the agreed probationary period is available for both parties and, particularly, the employer. Nevertheless, in the case at hand the parties had actually agreed to suspend the probationary period in the event of temporary incapacity. Therefore, the underlying issue was whether the probationary period was merely suspended or if the agreement instead implied a restriction of the right to discontinue the agreement in addition to the suspension.

The SC held that the agreement to extend the term of the probationary period is a guarantee for both parties provided that the probationary period can be extended beyond the legal term. However, it found that the extension did not restrict the employer’s right to discontinue the contract and the termination of the agreement by the employer was therefore not abusive or discriminatory.

 

4. Conciliation claim. Consequences for the calculation of the limitation period for dismissal claims

Judgment of the High Court of Justice of Castilla-La Mancha dated 4 December 2008

In this case, the High Court of Justice of Castilla-La Mancha (“HC”) analysed the consequences of filing a settlement proceeding on the limitation period for filing a claim for dismissal.

In this regard, the HC held that the filing for settlement before the Mediation, Arbitration and Conciliation Services (“MACS”) leads to the suspension of the limitation period (20 business days -Saturdays, Sundays and bank holidays are excluded-) on the date the settlement proceeding is filed with the MACS (not including the filing date). The HC also stated that the term of the limitation period elapsed prior to the filing of the settlement proceeding cannot be recovered. Therefore, upon filing the settlement proceeding, the claim must be filed within the remaining period.

Moreover, the limitation period will resume the business day after the settlement proceeding unless such proceeding has not taken place on the fifteenth day from the settlement request given that the limitation period will in all cases resume on the sixteenth business day after the filing for settlement.

In the case at hand, the claim was filed 22 business days after the termination of the contract and the HC therefore held that the limitation period had already expired.

 

5. Reduction of working hours for legal guardianship. Reduction must be adjusted to the nature of the services

Judgment of the Labour Court no. 6 of Madrid dated5 February 2009

The Labour Court number 6 of Madrid (“LC”) dismissed a claim filed against a company’s decision to deny a reduction of working hours for legal guardianship.

On the basis of article 37.5 of the SW, the claimant, a beauty advisor in a perfumery, requested a reduction of working hours in order to look after her child (under eight year old). She requested Saturdays be excluded from her normal working timetable in order that she could work from 9:30 to 13:30 hrs. Monday to Friday. The company rejected her request on the basis that most of the company’s business was carried out on Saturdays and there would be no qualified sales staff at the perfumery on those days if it were to accept her request.

The LC stated that the reduction of working time and timetable organisation must be done taking into account the ordinary working day as a reference, which in the case at hand was Monday to Saturday and not Monday to Friday. Likewise, the decision established that, even when the employee can choose to reduce working hours, the specific circumstances of each case must be examined when such right affects the employer’s right to manage and organise the company. The LC found that the reduction of working hours by excluding Saturdays was unfeasible on the basis that Saturdays were the days on which the company did most of its business.

The information contained in this Newsletter is of a general nature and does not constitute legal advice