Structural reforms of the legal system for
sustainable economic development
Law 2 /2011 of 4
March on sustainable economic development
Law 2/2011 of 4 March (the “Law”) was
implemented to foster the renewal of the Spanish production model
together with the Spanish Plan for Stimulating the Economy and
Employment (Plan E). The Law introduces many of the changes considered
necessary to further the development of a more competitive economy.
The most important provisions of the Law
concerning labour law are set out below.
Firstly, Law 24/1988 of 28 July on the Stock
Exchange was amended by the inclusion of Chapter VI, "The annual
corporate management report". This Chapter establishes that listed
companies must prepare an annual report on corporate management. The
report must contain the company’s ownership structure, information on
board directors' shareholdings and the existence of shareholder
agreements, shares not traded on a regulated European market, the
structure of company management, etc. Information must also be provided
regarding the composition and operation of the board of directors and
its committees, the powers of the board members, the identity and
remuneration of the members, agreements between managers and employees
with the company about compensation for resignation or dismissal, among
others. Furthermore, listed companies must submit an annual report on
directors’ remuneration together with the company policy and a breakdown
of each director’s individual remuneration.
Secondly, Chapter VI of the Law contains a
number of measures to encourage corporate social responsibility. The
purpose of these measures is to foster policies of social responsibility,
particularly in small and medium companies. In addition to government
action, the Law states that public limited companies may, on a voluntary
basis, issue a report on their policies and performance in this area.
Finally, Chapter VII introduces significant
reforms in vocational training, promoting greater collaboration with
private companies. The most important changes are the enhanced
collaboration between the educational and labour authorities and private
companies and the establishment of a new National Qualifications
Framework (in accordance with the European Framework). Moreover, a
complementary Basic Law will set out the initiatives to update the
national list of professional qualifications, the vocational training
modules and professional licences.
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Authorisation to use credit and debit cards
to pay social security debts in enforcement proceedings
Resolution of 4
March 2011 of the Social Security General Treasury, which authorises the
use of credit and debit cards to pay social security debts in
enforcement proceedings
In its resolution of 4 March 2011, the General
Directorate of the Social Security General Treasury authorises the use
of credit and debit cards to pay social security debts in enforcement
proceedings. This decision was taken pursuant to article 2.1 of Order
TAS/1562/2005 of 25 May, which establishes the rules on the application
and development of the Social Security Payment Collection Regulations.
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Measures to facilitate the application of the
European order for payment procedure
Law 4/2011 of 24
March, amending the Law 1/2000 of 7 January on Civil Procedure, to
facilitate the implementation in Spain of the order for payment and
small claims procedures
The purpose of this Law is to facilitate the
implementation in Spain of the two new European procedures of order for
payment and small claims, pending the approval of the Law on
international legal cooperation established in Spanish Civil Procedure
Law.
The European order for payment procedure is
regulated by Regulation (CE) No. 1896/2006 of the European Parliament
and of the Council of 12 December. It is important to note that
employment contracts fall within its scope, even though under Spanish
law these contracts do not pertain to civil or commercial law.
This procedure is a means of making cross-border
claims for uncontested monetary claims. In this regard, those disputes
in which at least one of the parties is domiciled or habitually resident
in a Member State other than a State in which the claim has been made,
are cross-border disputes.
Law 4/2011 adds a new final provision (23) to
the Civil Procedure Law which sets out the measures to facilitate the
implementation in Spain of the European order for payment procedure.
While the handling of this procedure is similar to that carried out in
Spain, it does have certain peculiarities. Firstly, proceedings are
initiated by the filing of an order for payment using a standard form,
without the need to provide any documentation. Once the application has
been received, the court clerk may request its rectification or, if the
claim is manifestly without merit, the claim may be transferred to the
judge for a resolution. Otherwise, the clerk will issue a European order
for payment, against which the defendant may lodge a statement of
opposition. In a European order for payment of an outstanding debt under
an employment contract, if a statement of opposition is lodged, the
claimant must then continue the proceedings in accordance with the
proper procedure, in this case, before the appropriate labour court.
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New legal framework for social economy entities
Law
5/2011 of 29 March on Social Economy establishes the new legal framework
for social economy entities
The purpose of Law 5/2011 is to enhance
recognition and transparency of social economy. Therefore, it aims to
provide social economy entities with greater legal certainty by dealing
with the concept and definition of the term social economy, and sets out
guiding principles common to all social economy entities. It also
provides a list of the different types of entities engaged in social
economy.
The Law provides an open list of the entities
that form part of the social economy including cooperatives, mutual
societies, foundations and associations carrying out economic activities,
employee-owned companies, placement agencies, special employment
centres, fishermen's associations, agricultural processing companies and
specific entities created by particular regulations governed by the
principles established in the Law. Social economy entities also include
entities engaged in economic and business activities, which rules of
operation correspond to the guiding principles of this Law and are
included in the list of social economy entities.
It also highlights the significance of
communication between the authorities and the organisations representing
social economy entities, stressing the importance of intersectorial
confederations at the national level. In this regard, the Law contains
principles and criteria of the systems of representation of these
organisations.
Apart from setting out a number of objectives
for public authorities as regards the development and promotion of
social economy, the Law provides for the establishment of the Council
for the Promotion of Social Economy, which will be the advisory and
consultative body within the Ministry of Labour and Immigration.
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Installation of surveillance cameras -
violation of employees’ right to privacy
Judgment of the
Labour Chamber of the High Court of Justice of Navarra dated 28
September 2010
The High Court of Justice of Navarra (“HCJN”)
declared that the measure taken by a company to install surveillance
cameras in its cash register area as a result of the continued decrease
in cash register takings, was legal.
The three requirements laid down by the
Spanish Constitutional Court to impose restrictive measures on
fundamental rights were deemed to have been met. In this case, the HCJN
found that the measure was justified (as there were reasonable
suspicions that employees were carrying out serious irregularities);
suitable for the purpose intended by the company (to verify whether
these irregularities were in fact being committed, and if so, to take
appropriate measures); necessary (as the recording would serve as
evidence); and balanced (the recording was limited to the cash register
and storage area and had a limited duration).
Furthermore, the HCJN stated that not
informing the works council or the affected employees that cameras had
been installed bore no constitutional implications. Thus, whether or not
a prior report from the works council was necessary (according to
article 64 of the Statute of Workers) constituted a matter of ordinary
law.
It was also deemed that no consequences arose
from not informing the Ministry of the Interior about the installation
of the surveillance cameras as the installation had been carried out by
a registered security company, which had sent information on the
creation of the corresponding file to the General Directorate of the
Police and the Data Protection Agency.
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Annulment of proceedings to extend the term
Judgment of the
Labour Chamber of the Supreme Court dated 9 December 2010
The judgment determined the effect of
annulling proceedings in a case in which the term to file the appeal was
erroneously extended, and how this affects the parties’ right to
judicial protection.
After declaring the dismissal unfair, the
first instance court suspended the term to file the appeal when the
claimant communicated a change of lawyer. Once the legal representation
was granted to the new lawyer the court granted a new term to file the
appeal.
The Supreme Court (“SC”) stated that,
according to the Constitutional Court’s case law, article 24.1 of the
Constitution does not cover the possibility of modifying or extending
terms to file motions. The terms apply by operation of law and cannot be
modified at the parties’ discretion. Had the incorrect extension of the
term to file the appeal (as the claimant intended) been construed as
valid, this would have been tantamount to giving the judge discretion to
amend the law.
Moreover, the right to judicial protection
applies to both parties to the proceedings. Therefore, once the legal
term to challenge the decision of the first instance court has elapsed,
the respondent has a right to the legal certainty inherent in a decision.
The SC held that the appeal filed by the
appellant within the time limit granted to him by the first instance
judge was time-barred.
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Internal circulars cannot amend collective
bargaining agreements
Judgment of the
Labour Chamber of the National Court dated 7 February 2011
In this case, the trade union Comisiones
Obreras filed a claim against the Spanish National Organisation for
the Blind (ONCE) to protect freedom of association. The Court
analysed whether the company had infringed the right to collective
bargaining by issuing an internal circular which, according to the trade
union, amended the provisions of the applicable collective bargaining
agreement.
The Court also analysed the legal nature of
internal circulars and found that they are not legal rules, and
therefore cannot create rights or obligations. The fact that conditions
are binding when favourable (becoming part of the relevant contract) is
not due to their regulatory nature, but rather to the fact that they are
contractual conditions.
Therefore, circulars cannot be considered to
be in violation of the right to collective bargaining as they do not
substitute collective bargaining agreements or decisions of
interpretation of the Joint Collective Agreement Committee, but rather,
are internal instructions which have no effect on employment contracts.
The inadequacy of the prosecution resorting to
the procedure established in article 175 of the Labour Procedure Law (applicable
when any worker or trade union considers that freedom of association
rights have been violated) was rejected on the basis that, although a
collective dispute could be deemed to exist, as the intention was to
interpret a collective bargaining agreement, the claimant is entitled to
resort to this procedure if he/she considers that his/her freedom of
association is being violated.
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Gender equality. Insurance premiums and benefits
Judgment of the
European Court of Justice dated 1 March 2011
The ECJ made a preliminary ruling on a matter
submitted by a Belgian court regarding Article 5(2) Directive 2004/113 (the
“Directive”). The Belgian court challenged the
provision alleging that it was inconsistent with the prohibition against
discrimination based on sex and the right to gender equality.
Article 5(1) of the Directive established that
differences in premiums and benefits arising from the use of sex as a
factor in the calculation must be abolished by no later than 21 December
2007. Article 5(2)created an exception for Member States which, at the
time Directive 2004/113 was adopted, did not have domestic legislation
on the matter in force. The exception therefore allowed proportionate
differences in premiums and benefits on the basis of sex.
The ECJ held that there was a risk that the
provision could create a permanent exception to the right to gender
equality. On that basis, the ECJ held that Article 5(2) was invalid upon
the expiry of the transitional period ending 21 December 2011.
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The liquidator assuming the employer’s role
Judgment of the
European Court of Justice dated 3 March 2011
The first issue in dispute was to determine
whether Articles 1 to 3 of Council Directive 98/59/EC are applicable to
the termination of the activities of a business establishment by means
of a court decision ordering the establishment’s dissolution and
liquidation due to its insolvency, even if national legislation provides
that in this case the employment contracts shall be terminated with
immediate effect.
Council Directive 98/59/EC modified Directive
75/129/EC so that the latter is also applicable to collective dismissals
resulting from the termination of a business establishment’s activities
by means of a court decision. As a consequence, the ECJ held that in
these cases, even if the termination takes place pursuant to a court
decision, the employer must inform and consult its employees.
Moreover, the doctrine maintained by the court
in the "Rodriguez Mayor and others" judgment was declared inapplicable.
This judgment challenged the obligations deriving from Directive
98/59/EC in the event of the death of the individual employer whose
company is not transferred to a third party.
In the event that a court decision declares a
company’s dissolution and liquidation, while it still has legal
personality, the employer must, on the one hand, carry out the acts
referred to in Articles 2 and 3 of Directive 98/59/EC and, on the other
hand, and where appropriate, carry out the collective dismissals, even
though national law states that the employment contracts of workers
shall be terminated with immediate effect in such cases.
A second preliminary issue in dispute was to
determine whether the liquidators acted as true representatives of the
employer, and therefore, if they were bound by the European regulations.
The ECJ held that the obligations deriving
from Articles 1 to 3 of Directive 98/59/EC must be met until the legal
personality of an establishment that is declared to be dissolved and
liquidated, no longer exists. The obligations of the employer under
these provisions must be met by the management of the establishment in
question, whilst the body remains in place, or by its liquidator when
the establishment’s management has been taken over in its entirety by
the liquidator.
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