1. Social
security. Temporary disability benefits
Royal Decree 1430/2009 of 11 September
develops Law 40/2007 on social security measures in connection with
temporary disability benefits (Spain’s Official Gazette of 29 September
2009)
This Royal Decree (“RD”) develops the
procedures to reduce companies’ social security contributions resulting
from employees suffering from a level of professional illness for which
no economic social security benefit is foreseen (unpaid sick leave).
Companies will be able to reduce their social
security contributions if the employees are assigned to another
compatible job within the company. The purpose of the measure is to
avoid the exclusion of these workers from the market.
The RD also governs electronic communications by
the public authorities of the autonomous regions when an employee has
been in a situation of temporary disability for twelve months, avoiding
any lack of coordination in the payment of the benefit. In this respect,
once the temporary disability period of twelve months lapses, the Social
Security will pay the benefits that the company was paying until that
moment.
Finally, the RD establishes a review procedure
for temporary disability processes at the request of the interested
party and collaborating entities.
2. Social
security. Agreement between Spain and Japan
Spain and Japan signed a social security
agreement in Tokyo on 12 September 2008 (Spain’s Official Gazette of 30
September 2009)
This agreement governs international relations
between Spain and Japan in the area of social security.
Previously, seconded workers were under the
obligation to pay social security contributions in both countries and
the agreement aimed to resolve this issue. In this regard, employees who
are seconded for a period of less than five years will pay contributions
to the Social Security in their country of origin. If employees stay
longer, the competent Spanish and Japanese authorities may agree to
allow the employee to continue being subject to the regulations of the
country of origin. Moreover, the years of contribution in both countries
will accrue for the purpose of a right to a pension.
3. Personal
data protection. Subcontracting. Transfer of TC2 forms and payslips
Report 0412/2009 of the Data Protection
Agency
The Data Protection Agency (“DPA”)
published a report (0412/2009) in which it rectified its opinion that
the delivery of TC2 forms and payslips by a subcontractor company to the
principal company was unlawful on the basis that this transfer did not
fall within the scope of article 42.1 of the Statue of Workers (“SW”)
or article 24 of Law 31/1995 on health and safety at work.
The DPA’s analysis of the legitimacy of this
transfer of data was based on article 7.3 of Law 15/1999 of 13 December
on Data Protection (“DP”), which establishes that transfers of
sensitive data must be governed by a legally binding rule or have been
consented by the data subject (TC2 forms and payslips may contain health
data and union membership data).
In previous reports, the DPA stated:
“(...)in no event can TC2 forms, payslips and
medical reports be communicated, since the information contained in
these documents is specially protected data and article 7.3 of DP
establishes that the transfer of this type of data is subject to the
consent of the affected person or to a specific law permitting such
transfer. Neither the SW nor the Health and Safety Law in force requires
the communication of these data to the contracting party, the indemnity
of the contractor being certain if the certification mentioned in
article 42.1 of the SW is provided, without further information about
the employees working in the subcontractor company being necessary.”
However, the DPA amends its last opinion
establishing that:
(i) The communication of the TC2 forms of the
employees of the subcontracted company to the main company is permitted
under article 42.2 of the SW (“the transfer of TC2 forms will fall
within the scope of article 7.3 of the DP related to article 42.2 of the
SW and of the joint and several liability governed by the Civil Code”),
and
(ii) the treatment of union membership data
contained in certain payslips is not an impediment for their provision
to the principal company (provided that it refers to subcontracted
employees), since the main purpose of the inclusion of this type of data
in the payslip is not altered (i.e., to deduct the relevant union fees)
and, “since the purpose is the same,(...) the transfer of data is in
accordance with article 7.2 related to article 4.2 of the DP and the
obligation set out in article 42.2 of the SW.”
4. Temporary
disability and holidays
Judgment of the Court of Justice of the
European Communities dated 10 September 2009
This judgment of the Court of Justice of the
European Communities (“ECJ”) resolves a preliminary issue
proposed by Labour Court number 23 of Madrid.
On the basis of protecting the health and safety
of employees, the ECJ reaffirmed (see its previous judgment of 20
January 2009) its interpretation of Article 7 Section 1 of Directive
2003/88 and recognised the right of an employee to enjoy holidays in a
period other than that established by the company, even when this occurs
outside the established reference period.
The ECJ stated that the purpose of the right to
annual paid holidays is to allow employees to rest and have time for
leisure and recreation. This purpose is different than that
corresponding to temporary disability leave, which purpose is to allow
the employee time to recover.
5. Work
related accident. Civil jurisdiction
Judgment of the Civil Chamber of the Supreme
Court dated 23 April 2009
The Supreme Court (“SC”) stated that
liability claims against an employer arising out of a breach of an
employment contract fall under the jurisdiction of the labour courts.
Nevertheless, the SC stated that, if the event involving the employee
giving rise to the claim occurs while the employee is working in a
building of a company that has no labour relationship with the employer,
the civil courts will be competent to hear the action involving
liability.
In the case analysed by the SC, both the
employing company and that corresponding to the building in which the
accident occurred were sued. In the opinion of the SC, the case should
have been heard by the civil courts, given that the defendants were
legal persons between which there was no labour link. It was therefore
possible to deduce that the civil courts have jurisdiction to hear the
action for liability given that, when the cause cannot be separated,
“vis atractiva” of civil jurisdiction should apply if the employee has
not entered into an employment contract with the defendant company.
6. Paid leave
of absence. Maternity hospital stay
Judgment of the Labour Chamber of the Supreme
Court dated 5 May 2009
In this judgment, the SC established an employee’s
right to paid leave under article 37.3b) of the SW when patients with a
second degree of consanguinity or affinity are in hospital and that,
furthermore, only proof of hospital admission is necessary, not the
reasons for the same.
In the case analysed, the hospital admission
involved a birth without complications and while childbirth is not
considered an illness, the SC stated that the woman’s hospital admission
should be treated the same as that of an ill person. As such, the SC
interpreted article 37.3 b) of the SW literally and declared the right
to paid leave even when childbirth occurs without complications.
7. Transfer
of undertaking. Subrogation of business
Judgment of the Labour Chamber of the Supreme
Court dated 28 April 2009
Referring to EU law, the judgment of the SC
dated 28 April 2009 established that the continuance of the activity and
the transfer of the workforce is not sufficient for the purposes of
determining if a transfer of companies has occurred despite the
importance of such circumstances for the development of the business.
The transfer of the company’s assets was the determining factor.
The judgment analysed a public tender to supply
radiopharmaceuticals and the management of toxic waste from specific
public hospitals. The award was given to a specific company and the
hospitals proceeded to provide the company with radiopharmaceutical
materials in order that the former carry out the necessary tasks. The
public tender was subsequently awarded to a new entity established
within the hospitals. The new company paid the previous company for the
pharmaceutical stock and received from the hospital the building and the
work instruments for the rendering of services.
Thus, the SC concludes that a transfer of
undertaking occurred given that there was a transfer of assets -units
and instruments of the public health service and pharmaceutical stock
acquired by the second successful bidder- and not because there was a
transfer of a significant number of employees and the business activity
continued.
8. Bonus.
Proportional payment
Judgment of the Labour Chamber of the Supreme
Court dated 5 May 2009
In this case an employee had voluntarily
resigned from her post and sought payment of the variable remuneration
corresponding to the first eight months of the year.
In the employment contract the parties had
agreed that the employee would be paid twelve thousand euros per year in
variable remuneration if she met the targets set by the company. The
company had to establish the targets and how much of the variable would
be paid for their fulfilment. In addition, the parties agreed that
during the first year of the contract, the remuneration would be paid in
proportion to the time worked.
The claimant only achieved 90.54% of her targets
in the period for which the variable compensation was claimed, but she
nonetheless sought payment of the variable remuneration corresponding to
the length of time worked and the targets achieved.
The judgment of the Labour Court dismissed the
claim at first instance, but at appeal the claim was upheld on the
grounds that there is a right to receive the variable remuneration
corresponding to the targets achieved.
The company appealed to the SC to set aside the
judgment. The SC dismissed the appeal and upheld the Appeal Court
judgment, declaring that the payment must be proportional to the
variable targets achieved each year. The SC stated that:
“(...) the term variable salary, indicates
that the amount of money is variable and it is not necessary that all
the targets are met because it can be paid in proportion (variable) to
the targets achieved, because otherwise, the bonus would be fixed as
opposed to variable, for the achievement of targets (...) When it is
said that the variable salary «will be paid in accordance with
the fulfilment of the targets set», the intention of the parties
is that the achievement of all or part of the targets or aims determines
the amount of the variable remuneration paid that is established in
accordance with the achievement of the target because, if this were not
the case, the remuneration would not be variable and it would not be
paid in accordance with the targets achieved (...) By providing that
during the first year the amount of variable remuneration would be fixed
in accordance with the length of time worked, the intention of the
parties was to pay the bonus in proportion to the targets achieved each
year.”
9. Validity
of a non-statutory collective agreement. Professional category
Judgment of the Labour Chamber of the Supreme
Court dated 11 May 2009
In this case the SC had to determine if the
professional category recognised by a non-statutory collective agreement
should be maintained (i) when such agreement expires, and (ii) after a
statutory agreement has entered into force.
The SC established that non-statutory collective
agreements have contractual force, are of limited scope and temporary.
Therefore, a non-statutory collective agreement cannot create more
beneficial conditions for employees that must be maintained after it
expires or a new statutory collective agreement enters into force.
The SC held that if the rights established in a
non-statutory collective agreement remain in force after the agreement
expires, it would be contrary to the rules on promotion established in a
statutory collective agreement, and would place the employees to whom a
non-statutory agreement applies in a more advantageous position.
10.
Termination of employment contract. Constructive dismissal. Failure to
pay salary or continuous delay in payment of the same
Judgment of the Labour Chamber of the Supreme
Court dated 10 June 2009
In this case, an employee sought to terminate
her employment contract owing to the employer continuously making late
salary payments.
The claim was rejected by the Labour Court but
the Appeal Court declared the termination of the contract and ordered
the company to pay the employee compensation, due to constructive
dismissal.
The company appealed to the SC on the ground
that the action was inadmissible and that prior notice should have been
given pursuant to the requirements of good faith.
The SC held that article 50 of the SW is the
application in an employment context of article 1124 of the Civil Code,
which allows the injured party to choose between the performance of the
obligation or the recovery of damages and interest. The SC held that the
exercise of rights is conditioned by the inactivity of their holder when
the legislator considers it appropriate to establish an expiry or
prescription period. However, in this case the legislator had not
established a period of time within which the request to terminate the
employment contract based on constructive dismissal must be made.
Therefore, it is possible for an employee to claim for constructive
dismissal (without having to notify the employer) when there is a repeat
delay in the payment of salaries.
11. Legal
transfer of workers within a group of companies
Judgment of the Labour Chamber of the Supreme
Court dated 25 June 2009
The SC upheld the appeal against a judgment of
the National Court (“NC”) which rejected a labour claim.
The claim affected around forty workers who were
initially hired by companies in which one main company had the majority
shareholding. The workers provided services based on the commercial
contracts agreed between the main company and the direct employers.
Subsequently, the workers signed employment contracts with the main
company, which did not acknowledge their previous length of service.
The labour claim was filed to determine whether
the contracting period with the subsidiaries should be borne in mind
when calculating certain pay supplements and the length of service bonus
to be paid by the main company.
The NC rejected the claim, which was appealed on
the grounds of the breach of articles 42 and 43 of the SW, and therefore
that there had been an illegal transfer of workers.
The SC held that there is no illegal transfer of
workers when a “group of companies” exists and group is understood in
its widest sense, i.e., when the companies actually form part of a group
even though not formally.
The SC also held that this situation was a legal
transfer of workers as it was possible to establish direct contracting
mechanisms between a real group of companies. This practice should be
considered lawful when the workers’ rights are not limited. The workers’
rights were guaranteed in this case and therefore the SC upheld the
appeal as it held that the length of service of the affected workers
must be calculated from the start of the transfer.
12. Danger
money. Only payable for the number of days worked
Judgment of the Labour Chamber of the Supreme
Court dated 29 June 2009
The SC held that danger money must be paid only
for the number of days worked under these circumstances as opposed to on
a calendar days basis.
The employee worked for a cleaning company and
had been receiving an additional payment for working under dangerous
conditions on a calendar day basis until a particular date on which she
began receiving the payment per number of days worked. In response to
this change, the employee claimed the additional payment, which was
upheld at first instance and at appeal.
However, the SC held that as the additional
payment was not regulated in the collective bargaining agreement, it
should be treated as a pay supplement. Therefore, unless the employee’s
contract stated otherwise, the additional payment for dangerous working
conditions could only be made for the days on which the activity was
carried out under these circumstances, as opposed to on a calendar days
basis.
13. Unfair
dismissal. Outsourcing termination
Judgment of the Labour Chamber of the Supreme
Court dated 2 July 2009
The SC held as an unfair dismissal, the
termination of a temporary employment contract that was linked to the
duration of an outsourcing.
The case related to a non-governmental
organization which had implemented a project in an autonomous region.
The non-governmental organization decided to end the project early and
as a result informed one of its employees that his contract would be
terminated.
The SC held that “as the contract was
terminated early due to the will of the contractor, the cause of
termination was not the termination of the works or service forming the
purpose of the contract but rather the early termination by the
contractor.”
The SC therefore concluded that the
contractor was liable for the termination without cause of the
employment contract.
14.
Collective dismissal. Priority of employee representatives to retain
their posts
Judgment of the Labour Chamber of the High
Court of Justice of Aragon, dated 9 June 2009
This judgment held that the priority that the
employee representatives have to remain in a company or workplace is
limited by the redundancy procedure. If a redundancy procedure which
suspends or terminates employment contracts affects practically all
staff or a majority of employees who perform the same or similar
activities, members of the employee representatives no longer have
priority to retain their posts.
This judgment made reference to the case law of
the SC of the early 90s, which stated that the priority of employee
representatives to retain their posts is not unconditional or absolute,
and that the mere suspension of their employment relationships does not
give rise to the suspension of their representative activities. The SC
held that such priority right cannot be enforced against other employees
who have different qualifications and whose activity in the company is
necessary for the company’s survival, as this would diminish or
eliminate the effectiveness of the technological, economic and
organisational measures. Therefore it is necessary to continue the
employment contracts of employees who are qualified for such posts.
