February 2011
LABOUR LAW
1.
“Plan
of Action” to encourage stable employment and provide professional
retraining
Royal Decree Law 1/2011 of 11 February implements a number of short-term
measures included in the Economic and Social Agreement in order to
encourage stable employment and provide professional retraining.
(More information)
2.
Improving employability and the reform of active employment policies
Royal Decree Law 3/2011 of 18 February reforms current active employment
policies to enhance their efficiency and to improve the employment
market in accordance with the Economic and Social Agreement.
(More information)
3.
Insolvency declaration. Right to guarantee of outstanding claims
The
European Court of Justice confirmed the validity of a national law that
excludes an employee from the entitlement to collect outstanding claims
from an employer when, during the six months before the onset of the
employer’s insolvency declaration, the employee was an owner and had
considerable influence on the employer’s business activities.
(More information)
4. Collective transfers. Pre-retirement
The
Supreme Court held that the announcement of a collective transfer does
not imply its existence, particularly when the majority of a company’s
workforce agrees to take pre-retirement and the transfers that do take
place fall below the legal thresholds to be considered collective
transfers. (More information)
5. Ordinary proceedings. Calculation of
severance payments
The
Supreme Court holds that ordinary proceedings should be followed for
filing claims which are based solely on the calculation of severance
payments for unfair dismissal and which do not enter into the merits of
the case. (More information)
6. Void dismissal of a sick employee
The
High Court of Justice of the Canary Islands held that the dismissal of a
sick employee that was based on the mere existence of his illness was
null. (More information)
7. Second dismissal. Failure of first
dismissal to indicate that the employee was a member of the works
council
The
High Court of Justice of Murcia held that a second dismissal carried out
to correct flaws in the initial dismissal was valid. (More
information)
8. Joint and private property. Amounts
received for unfair dismissals, unemployment and retirement
The
Provincial Court of Valladolid held that amounts collected for unlawful
dismissals, unemployment and retirement can be considered as either
joint or private property depending on when they are collected.
(More information)
1.“Plan of Action” to
encourage stable employment and provide professional retraining
Royal Decree Law 1/2011 of 11 February on urgent measures to encourage
stable employment and provide professional retraining for unemployed
workers
The
Economic and Social Agreement entered into by the Spanish government and
the social partners included the “Plan of Action”, a series of short-term
measures to encourage stable employment and provide professional
retraining. Royal Decree Law 1/2011 of 11 February (“RDL 1/2011”)
develops some of the measures of the “Plan of Action”.
The
first measure allows companies to reduce social security contributions
by up to 100% if they create part-time employment, provided that the
worker is hired by virtue of an employment contract for a duration of at
least six months and the individual works for 50% to 75% of the ordinary
working timetable. The specific amount of the reduction depends on the
number of employees in the company.
RDL
1/2011 creates a professional retraining programme for workers whose
unemployment benefits have run out, with the aim of facilitating their
return to the labour market. Workers taking part in the programme whose
monthly income does not exceed 75% of the minimum wage will be entitled
to 75% of the monthly National Indicator of Earnings (IPREM) for up to
six months.
Finally, RDL 1/2011 implements a series of measures to enhance
employability by retraining groups of workers that have most suffered
the consequences of the financial crisis. These measures include
preparing tailored employment courses and allowing unemployed workers to
attend training sessions for employed workers.
2. Improving
employability and the reform of active employment policies
Royal Decree Law 3/2011 of 18 February on urgent measures to improve
employability and reform active employment policies
Royal Decree Law 3/2011 of 18 February (“RDL 3/2011”)
adapts specific measures of the Economic and Social Agreement on the
reform of active employment policies in view of the current employment
market in order to improve their efficiency. The new policies are based
on the principles of equal and free access and priority for those most
affected by the current financial crisis and has implied a series of
significant legislative amendments, including to Law 56/2003 of 16
December on employment.
RDL
3/2011 amends general legislative employment policies including those on
labour intermediation and active employment, and their link to Spanish
legislation on the protection of the unemployed. RDL 3/2011 also
establishes the Spanish Employment Strategy and the Annual Employment
Policy.
RDL
3/2011 reinforces the Public Employment Services within the framework of
the National Employment System. Amongst other goals, RDL 3/2011 is
designed to improve the planning, management and evaluation of active
employment policies. It also establishes a list of public services
applicable to the entirety of the Public Employment Services and
provides for individual and personalised employment itineraries which
are prioritised for those who most need them.
Within the framework of the public employment services, RDL 3/2011 has
also created a fund to finance these employment policies.
3. Insolvency declaration.
Right to guarantee of outstanding claims
Judgment of the European Court of Justice dated 10 February 2011
The
purpose of this decision was to determine if an employee has the right
to collect outstanding claims when, during the six months before the
company filed the insolvency declaration, she also owned and had a
considerable influence on the employer’s activities.
The
European Court of Justice analysed the validity of a Swedish law that
excludes employees from the right to collect outstanding claims in the
abovementioned circumstances, in the light of Article 12(c) of the
Parliament and Council Directive 2008/94 (“D 2008/94”).
The
Court concluded that Article 12(c) of D 2008/94 is not in opposition
with a national law that excludes an employee from the right to collect
outstanding claims if, during the six months before the company files an
insolvency declaration, such employee was an owner and exercised
considerable influence over the insolvent company.
4. Collective transfers.
Pre-retirement
Judgment of the Labour Chamber of the Supreme Court dated 17 January
2011
The
Supreme Court judgment was issued in response to the collective labour
dispute claim filed by the General Labour Confederation (“CGT”),
which the National Court rejected. The CGT claimed that the transfers
carried out by the company were null due to a breach of article 40.2 of
the Statute of Workers (“SW”).
The
National Court dismissed the claim as it considered the mere
announcement of a collective transfer not to constitute a transfer. In
addition, most of the employees had agreed to take pre-retirement and
the transfers that took place fell below the legal thresholds to be
considered collective transfers.
The
Supreme Courtupheld the first instance decision as it considered that
the CGT had misinterpreted the effects of the announcement of a
collective transfer with the transfer itself. In the end, given that 140
people agreed to take pre-retirement and only seven transfers took
place, the legal thresholds set out in article 40.2 of the SW were not
reached.
5. Ordinary proceedings.
Calculation of severance payments
Judgment of the Labour Chamber of the Supreme Court dated 30 November
2010
The
case involved the question of which proceedings should be followed for a
claim regarding the difference in the amount of the severance payment
offered by the company, and accepted by the employee, as a result of the
company’s recognition of the dismissal as unfair.
The
High Court of Justice of Valencia set aside the employee’s appeal and
confirmed the labour court’s decision at first instance which dismissed
the case on the grounds that the correct proceedings are those for
dismissal.
On
further appeal, the Supreme Court reversed the ruling based on its own
precedents which establish that ordinary proceedings should be followed
for claims in connection with unfair dismissals which only relate to the
method of calculating the severance payment and not the merits of the
case, such as the compensation owed, salary, seniority or the parties
obligated to pay.
6. Void dismissal of a
sick employee
Judgment of the Labour Chamber of the High Court of Justice of Las
Palmas de Gran Canaria dated 25 January 2011
This
case concerned an employee who was dismissed on the grounds that, owing
to repeated periods of sick leave taken by the employee, the employer
considered that it no longer made financial sense to employ him.
The
employee filed a claim seeking to have his dismissal declared null. At
first instance the court held that the dismissal was unfair but not null.
On
appeal, the High Court reversed the ruling based on precedents set by
the Constitutional Court. According to those precedents, an employee’s
illness can be taken into consideration to determine the existence of
improper discrimination in two circumstances: (i) when the illness
implies the stigmatisation of the employee or (ii) when the mere
existence of the illness is the reason for the discrimination. The court
held that, since the employee was dismissed because his illness meant
that it no longer made financial sense to employ him, the employer had
based the dismissal on the mere existence of his illness.
7. Second dismissal.
Failure of first dismissal to indicate that the employee was a member of
the works council
Judgment of the Labour Chamber of the High Court of Justice of Murcia
dated 16 July 2010
This
decision related to the dismissal of an employee who was a member of the
works council. The mandatory period to file a statement of defence was
not initially satisfied and the employer carried out a second dismissal
to correct the errors in the first dismissal.
The
first instance court declared that the dismissal was unfair. The court
held that the conduct alleged against the employee was not sufficiently
serious to justify his dismissal and that the second dismissal letter
had not corrected the errors in the first dismissal.
The
High Court of Justice of Murcia reversed the ruling and held that,
pursuant to the applicable collective bargaining agreement, the conduct
alleged against the employee was sufficiently serious to justify the
dismissal. The second dismissal was held to be valid on the basis that
the employee remained in the company until the second dismissal.
8. Joint and private
property. Amounts received for unfair dismissals, unemployment and
retirement
Judgment of the Provincial Court of Valladolid dated 8 October 2010
In
this dispute, the Provincial Court of Valladolid determined whether
amounts received by employees for unlawful dismissals, unemployment and
retirement should be characterised as either joint or individual
property.
The
first instance court held that such monies could not be considered as
joint property. The claimant appealed the decision on the basis that the
amounts had been received while a joint property agreement was in force.
The
court stated that the determination of the amounts alleged to be joint
property depended primarily on when the sums were collected, on which
basis the court overturned the ruling of the first instance court and
upheld the appeal.
