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


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)

 

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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.

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