July
2010
LABOUR LAW
1.Registration of collective agreements on partial retirement
Order TIN/1827/2010 of 6 July of the Ministry of Labour and
Immigration develops the second transitory provision of Royal Decree-Law
8/2010 of 20 May and establishes the procedure for keeping a record of
collective agreements on partial retirement. (More
information)
2. 33rd America’s Cup. Reductions of social security
contributions
Royal Decree 904/2010 of 9 July develops social security measures in
order to fulfil commitments derived from the organisation and holding of
the 33rd America’s Cup in Valencia. (More
information)
3. Salary revision based on the Consumer Price Index established in
the National Budget for pensions
In its decision of 26 January 2010, the Labour Chamber of the Supreme
Court stated that a salary revision agreed in collective bargaining
based on the CPI forecast can be calculated using official data of other
authorities if the CPI forecast has not been published by the competent
authority. (More information)
4. Public authorities can change their employees’ workplace within
the same town under the same conditions as a private employer
The Labour Chamber of the Supreme Court, in its ruling of 9 February
2010, recognises the right of the Government of Andalusia to change its
employees’ workplace as if it were a private employer, as long as it
does not involve a move to a different town or a change of professional
category or level. (More information)
5. Trade union report on suspicion of workplace harassment did not
infringe the accused’s right to honour
The Civil Chamber of the Supreme Court, in its ruling of 16 February
2010, held that it was not an infringement of an employee’s right to
honour for union representatives to inform a company of another employee’s
formal complaint of workplace harassment against him. (More
information)
6. Employees who have entered into hand-over contracts are not
excluded from receiving a severance payment in the event of the
termination of their contracts
On 11 March 2010, the Supreme Court held that employees who have
entered into hand-over contracts are not excluded from receiving the
severance payment established in article 49.1.c of the Statute of
Workers, which is equivalent to eight days of salary per year of service.
(More information)
7. Indemnity guarantee. Remuneration
According to the so-called indemnity guarantee, the Labour Chamber of
the Supreme Court held in its decision of 18 May 2010, that union
representatives are still entitled to travel allowance when they make
use of their hour credits and do not physically attend their workplace.
(More information)
8. Collective bargaining agreement for Repsol Química S.A. Double
pay scale contrary to the principle of equality
According to the decision of the Labour Chamber of the Supreme Court
of 18 June 2010, a double pay scale for length of service based on the
starting dates of the employees constituted an unjustified violation of
the principle of equality. (More information)
9. The non-fulfilment of the termination agreement by the employer
is not sufficient for a dismissal to be declared unfair
In its decision of 9 April 2010, the Labour Chamber of the Supreme
Court held that an employer’s failure to make the agreed payments was
not sufficient to render the dismissal unfair. (More
information)
Portuguese Labour Law Newsletter
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1. Registration of collective agreements on
partial retirement
Order TIN/1827/2010 of 6 July 2010, which develops, in accordance
with collective agreements on partial retirement, the second transitory
provision of Royal Decree-Law 8/2010 of 20 May adopting extraordinary
measures to reduce the public deficit (Official Spanish Gazette of 8
July 2010).
The second transitory provision of Royal Decree-Law 8/2010 of 20 May
establishes that, until 31 December 2012, employees affected by
retirement undertakings adopted in collective redundancy procedures or
collective bargaining agreements prior to 25 May 2010, can apply the
partial retirement methods regulated in article 166.2 of the General
Social Security Law.
To enforce the provision, a procedure has been created to communicate
collective agreements to the Social Security. The affected employees,
employee representatives and employers have one month from 9 July 2010
to make the agreements available to the Regional Offices of the National
Institute of Social Security or the Social Security General Treasury.
Legal and natural persons subject to the procedure must also attach a
document which states the timeframe for the validity of the agreement,
the applicable geographical area and the social security contribution
codes of the agreements.
2. 33rd America’s Cup. Reductions of
social security contributions
Royal Decree 904/2010 of 9 July developing tax and social security
discounts to fulfil commitments derived from the organisation and
holding of the 33rd America’s Cup in Valencia (Spanish
Official Gazette of 20 July 2010)
Legal entities domiciled in Spain and created by the organising
entity or teams participating in the 33rd America’s Cup or in
the 2007 America’s Cup and acting as employers for tasks directly
related to the event may benefit from a reduction of social security
contributions as stipulated in Royal Decree 904/2010.
Qualifying employers will receive a 100% reduction of social security
contributions for common contingencies and joint deductions accrued
between 1 January 2009 and 31 August 2010. Reductions may not be applied
in conjunction with any others.
3. Salary revision based on the Consumer Price
Index established in the National Budget for pensions
Judgment of the Labour Chamber of the Spanish Supreme Court dated
26 January 2010
This ruling confirmed the decision of the Labour Chamber of the
National Court and held that, in the event there is no official and
specific Consumer Price Index (“CPI”) forecast, the revision can
be based on the increase of pensions established in the National Budget.
According to article 48.1.1 of the General Social Security Law,
pensions are revised based on the CPI and, therefore, even if the CPI is
not available in a separate official declaration, the increase to
pensions in the National Budget corresponds exactly to the CPI. This is
consistent with the principle of authority and can be considered
official and, on that basis, used for the agreed salary increases in
place of the CPI provision established in the collective bargaining
agreement.
4. Public authorities can change their employees’
workplace within the same town under the same conditions as a private
employer
Judgment of the Labour Chamber of the Supreme Court dated 9
February 2010
The issue under discussion in the appeal lodged by the Government of
Andalusia was whether or not a public authority can move employees to a
different workplace without having to justify the invoked reasons for
the move (provided that it does not involve the employees moving home or
changing professional category or level), just as any private employer
could do under article 40.1 of the Statute of Workers (“SW”).
Having checked that there is no legislation, regulation or convention
that improves the government employees conditions established in article
40.1 of the SW, the Supreme Court upheld the Government of Andalusia’s
appeal, finding that a move to a different workplace in the same town or
city is an incidental change to employment conditions that does not
require the fulfilment of any conditions other than those stipulated in
the SW. As the relevant notifications had been made, no further
conditions could be imposed or additional accreditation of the
circumstances justifying the change sought.
5. Trade union report on suspicion of workplace
harassment did not infringe the accused’s right to honour
Judgment of the Civil Chamber of the Supreme Court dated 16
February 2010
In this case, the union representatives in a company received a
report from an employee who claimed he was being harassed by a more
senior colleague. The representatives submitted this information to the
company’s health and safety committee and to the human resources
department. The situation was already common knowledge among the
employees. In response, the person accused of harassment sued the union
representatives for breaching his right to honour and privacy.
The Supreme Court (“SC”) held that the behaviour of the trade
union representatives was appropriate, given their functions, because
they only informed the company in writing of a case of harassment so
that measures could be taken to resolve the situation. Furthermore, the
communication did not contain any offensive or slanderous statement that
was contrary to the employee’s right to honour. It was also relevant
that the other employees were already aware of the situation.
The SC held that when faced with a confrontation between the
plaintiff’s right to honour and the defendants’ information right, the
latter clearly took precedence. The representatives acted within the
framework of their right to freely communicate truthful information
protected by article 20.1.d of the Spanish Constitution, and therefore,
they could not have breached the right to honour.
6. Employees who have entered into hand-over
contracts are not excluded from receiving a severance payment in the
event of the termination of their contracts
Judgment of the Labour Chamber of the Supreme Court dated 11 March
2010
After examining the nature of the hand-over contract (i.e. contracts
to replace employees who retire partially) and its possible resemblance
to a temporary substitution contract, the Supreme Court concluded that,
except for the temporary aspect, the contracts are different in nature.
In any case, the SC stated that a rule that restricts rights (i.e.
article 49.1.c of the Statute of Workers) cannot be widely interpreted
and, consequently, an employee contracted by means of a hand-over
contract cannot be excluded from receiving a severance payment in the
event of the termination of the employment contract. The SC therefore
upheld the National Court’s judgment.
7. Indemnity guarantee. Remuneration
Judgment of the Labour Chamber of the Supreme Court dated 18 May
This decision reiterates the Supreme Court’s doctrine in its judgment
of 25 February 2008.
Pursuant to established constitutional doctrine, trade union freedom
implies a remuneration indemnity guarantee, by means of which, an
employee’s union activity cannot result in a decrease in his/her
remuneration. Therefore, in the case at hand, whether or not the union
representative physically attends the workplace is irrelevant for the
purpose of receiving travel allowance. The essential element here,
taking into consideration trade union freedom, is that there should be
no negative consequences, such as a reduction in salary, deterring
representatives from carrying out their union functions. Travel
allowance must be paid to union representatives even when they do not
physically attend their workplace.
8. Collective bargaining agreement for Repsol
Química S.A. Double pay scale contrary to the principle of equality
Judgment of the Labour Chamber of the Supreme Court dated 18 June
2010
Following the doctrine of the Constitutional Court (“CC”)
established by decision 27/2004 of 4 March, the Supreme Court held that
different pay scale treatment depending on the date of hiring is
discriminatory if no other reasonable justification applies.
Taking into account the doctrine from the CC, the SC held that, in
view of the attendant circumstances, there was no justification for the
different treatment in salary supplements for length of service
established in the two different frameworks in the collective bargaining.
The agreement provided one set of conditions for employees hired before
31 December 1994 and another for employees hired after that date. The SC
stated that the company could have used other mechanisms which would
have guaranteed the rights of employees belonging to the first group but
which would have also been consistent with the right to equality, such
as a freezing of the consolidated salary supplements to avoid an
increase in pay differentials.
The SC confirmed the decision of the National Court and declared the
double pay scale related to seniority void.
9. The non-fulfilment of the termination agreement
by the employer is not sufficient for a dismissal to be declared unfair
Judgment of the Labour Chamber of the High Court of Justice of
Madrid dated 9 April 2010
In this case, the High Court of Justice of Madrid (“HCJ”)
decided on a matter in which a company dismissed an employee based on
objective economic grounds and recognised the unfairness of the
dismissal. On the same day, the two sides reached an agreement
establishing that the company would make specific payments to the
employee for the termination of the employment relationship. The company
later failed to pay the agreed sums.
In its decision, the HCJ confirmed the decision at first
instance and rejected the employee’s argument that the dismissal was
unfair. The HCJ held that the employer’s failure to make the payments
did not imply that the employment relationship remained in force. The
relationship ceased to exist as a consequence of the termination
agreement, without prejudice to the outstanding sums due to the employee.
