August
2009
LABOUR LAW
1. Private insurance
Royal Decree 1298/2009 of 31 July amends the regulations on the rules
and supervision of private insurance, approved by Royal Decree 2486/1998
of 20 November, and the regulations on mutual insurance companies,
approved by Royal Decree 1430/2002 of 27 December, by reducing the
administrative costs that companies have to pay, while redrafting the
regulations on mutual insurance companies in order to simplify the
regulations on notifications to the General Directorate for Insurance
and Pension Funds. (More information)
2. Pension plans and funds
Royal Decree 1299/2009 of 31 July amends the regulations on pension
plans and funds, approved by Royal Decree 304/2004 of 20 February, to
facilitate the cashing-in of pension plans when a worker has been
unemployed for an extended period of time. (More
information)
3. Temporary disability and holidays
The judgment of the Labour Chamber of the Supreme Court dated 24 June
2009, held that an employee who was unable to exercise his right to paid
annual holidays due to his temporary disability was able to enjoy
holidays at another time. This judgment gives rise to a change in case
law as regards paid annual holidays based on the criteria established by
the European Court of Justice. (More information)
4. Right to weekly rest period. Compensation
The judgment of Labour Court no. 19 of Madrid dated 30 June 2009
determined that a company had infringed the rights of certain employees
regarding their weekly rest period. The employer was ordered to pay
compensation for damages. (More information)
1. Private insurance
Royal Decree 1298/2009 of 31 July amends the regulations on the
rules and supervision of private insurance, approved by Royal Decree
2486/1998 of 20 November, and the regulations on mutual insurance
companies, approved by Royal Decree 1430/2002 of 27 December (Official
Spanish Gazette of 1 August 2009)
The main purpose of Royal Decree 1298/2009 of 31 July (the "RD")
is to reduce the administrative costs that companies have to pay.
Moreover, the RD modifies the Regulation on the rules and supervision of
private insurance by introducing a specific regulation on prior
information to the insured party within the scope of life insurance. The
RD also redrafts article 13.2 of the regulations on mutual insurance
companies in order to simplify the regulations on notification to the
General Directorate for Insurance and Pension Funds regarding the
amendment of the documents submitted for the granting of administrative
authorisations to start the business activity.
The RD came into force on 2 August 2009.
2. Pension plans and funds
Royal Decree 1299/2009 of 31 July, which amends the regulations on
pension plans and funds approved by Royal Decree 304/2004 of 20 February
(Offical Spanish Gazette of 1 August 2009)
The main objective of Royal Decree 1299/2009 of 31 July ("RD
1299/2009"), in force since 2 August 2009, is to facilitate the
cashing-in of pensions when an individual has been unemployed for an
extended period of time.
RD 1299/2009 does away with the requirement that an individual must
have been unemployed for an uninterrupted period of at least 12 months
before they can access their pension pot (assuming that they are no
longer entitled to unemployment benefit or never were). RD 1299/2009
therefore equates these individuals to self-employed workers who have
stopped working and are registered as jobseekers.
For the purposes of RD 1299/2009, a participant of a pension plan is
considered to have been unemployed for an extended period of time if he/she
fulfils the following conditions:
a) he/she has been unemployed in the terms established in article
208.1.1 and 2 of the General Social Security Law and its secondary
legislation;
b) he/she is no longer/not entitled to the unemployment benefit
corresponding to the contributions he/she has made during his/her
working life; and,
c) he/she is registered as a jobseeker when the pension cash-in
application is made.
Finally, self-employed workers who have at some point contributed to
the social security as such but are not currently working and meet
requirements b) and c) may also exercise the pension cash-in right.
3. Temporary disability and
holidays
Judgment of the Labour Chamber of the Supreme Court dated 24 June
2009
This judgment was issued in response to a claim by an employee that
he should be entitled to exercise his right to paid annual holidays
which he was unable to take during the year because he was on sick leave.
The judgment upheld the employee’s claim and gave rise to a change in
case law as regards paid annual holidays. In doing so, the Supreme Court
for the first time applied the criteria of the European Court of Justice
in relation to the right to paid annual holidays as established in its
judgment of 20 January 2009 (Shultz-Hoff Case).
The sheer number of claims on this subject along with the coverage
given to them by the media justified the Court’s decision to allow the
appeal when it would not have normally.
This judgment therefore studies the scope of the employer’s
obligation to respect the employee’s right to enjoy paid annual holidays
and concludes that such obligation must not be limited to agreeing the
date on which the employee can take them, but instead that such date
must be changed if the employee subsequently cannot enjoy them as agreed,
even if it is taken after the year. This represents a change in the
current case law.
The Spanish Supreme Court reached this conclusion on the basis of the
European Court of Justice judgment of 20 January 2009, which interprets
Directive 93/104/EC. Thereby, the Labour Chamber of the Supreme Court
confirmed the entitlement to exercise the right to take annual holidays
which could not be taken as agreed on account of a temporary disability
to work. The Supreme Court held that: (i) the right of every employee to
enjoy holidays must be considered a principle of EU social law, (ii) the
purpose of such right is to allow employees to rest, which cannot be
done during a period of sick leave, and (iii) the national regulations
cannot infringe such principle by disallowing the right to paid annual
holidays.
The judgment argues in favour of the right to enjoy the holidays in
the circumstances already referred as regards the balance between work
and personal life, a basic principle of Spanish labour law.
4. Right to weekly rest
period. Compensation
Judgment of Labour Court number 19 of Madrid dated 30 June 2009
In its decision, Labour Court number 19 of Madrid (the “Court”)
considered a claim initiated by several employees seeking compensation
for specific days of rest not enjoyed due to conflicting calendars for
daily and weekly rest. The Court determined that the employer’s work
calendar conflicted with the daily and weekly rest periods, which
therefore implied an illegal reduction of the employees’ right to rest
periods.
The Court then ruled that the employer’s infraction was not excluded
from the general compensation system established in article 1101 et
seq of the Civil Code. The Court stated that, for the compensation
system to apply, it is sufficient that the employer is aware that the
conduct constitutes an illegal act. The Court further stated that the
absence of a reference to compensation for damage in the Statute of the
Workers does not imply its rejection. Rather, the Court held that
general principles on the right to compensation for damages must be
applied in such circumstances. Therefore, any determination on such
issues would depend on the type of damage caused.
The Court confirmed the legality and proportionality of the
compensation sought by the employees for the damage suffered and
rendered judgment against the company accordingly.
