The Council of Ministers has agreed to reinstate the transitional
period concerning the free movement of Romanian workers.
The Supreme Court held that the application of connected provisions
to an entire collective bargaining agreement must be interpreted in a
way that does not prevent specific provisions from being challenged, as
this would constitute a breach of the principle of legality in
collective bargaining agreements as set out in article 85.1 of the
Statute of Workers.
The Supreme Court held that the loss of a company’s main client and
the subsequent decrease in income was an objective ground for the
termination of an employment contract. The company was not under the
obligation to reallocate the worker to another workplace.
The Supreme Court held that payment of an insufficient award for
unfair dismissal may be remedied and does not prevent an appeal from
being lodged.
The Supreme Court referred to its case law on more favourable
conditions and held that the repeated payment of a special bonus that is
not contemplated in a collective agreement or employment contract is a
more favourable condition.
The Supreme Court determined the collective bargaining agreement
applicable in a company after a transfer of undertaking in which the
collective agreement referred to the collective bargaining agreement of
another company. The Supreme Court held that unless otherwise agreed,
the latest collective bargaining agreement applies, and not the
collective bargaining agreement in force at the time the collective
agreement was signed.
The Supreme Court held that the failure to comply with the obligation
to deliver a copy of the dismissal letter to the employee
representatives is a cause for the dismissal to be rendered void.
The National Court held that the employees’ right to strike is
infringed when the managing director of a company issues a communication
warning of the negative consequences a strike might bring about.
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1. Reinstatement of the transitional period for the free movement of
Romanian workers
Order PRE/2072/2011 of 22 July, publishing the Agreement of the
Council of Ministers, which reinstates the transitional period
concerning the free movement of Romanian workers
The Treaty of Accession to the European Union by Romania, provides a
transitional period of up to seven years during which Member States may
establish measures to regulate the entry of Romanians in the employment
market. The Agreement of the Council of Ministers of 22 December 2006
established that the transitional period in Spain would be two years.
However, it was agreed that the effects of the transitional period would
be assessed at the end of the first year, in order to decide whether the
period should end or continue until the end of the second year. The
Agreement of the Council of Ministers of 28 December 2007, established
that the transitional period would continue during 2008 and, at the end
of that year, the Community acquis on free movement of workers
would apply to Romanian workers in Spain.
However, Member States can reinstate the transitional period if they
suffer disruptions in their labour market that may seriously affect
employment figures. Accordingly, the Order reinstates the transitional
period, and provides that the Spanish Government will analyse the
effects at the end of this period (2012) and decide whether to continue
or end it.
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2. Inapplicability of a connected provision to an entire collective
bargaining agreement
Judgment of the Labour Chamber of the Supreme Court dated 30 May
2011
The Supreme Court (“SC”) decided on the appeal lodged by several
business associations in an industrial dispute against the trade unions
that had signed the State Collective Bargaining Agreement for Security
Companies (the “CBA”). The appellants were claiming that the financial
provisions in the CBA were not applicable because, in their view, there
was an “imbalance” in the CBA. They therefore requested the application
of the previous collective bargaining agreement’s financial provisions
until the CBA was renegotiated.
The appellants claimed that, after the abrogation of article 42 of
the CBA, which regulated the rates of extraordinary hours, the remaining
financial provisions of the CBA should not apply as the “connected
provisions” affected the entire CBA. As a consequence, the appellants
claimed an “imbalance” in the CBA because extraordinary hours must be
paid at a higher rate than that agreed.
The SC has consistently rejected the strict application of “connected
provisions” affecting entire agreements, among other reasons: because
(i) it cannot be stated that the internal balance of any agreement is
jeopardised by the abrogation of one or several provisions; and (ii) the
abrogation of the entire CBA would be detrimental to the parties
involved, especially to workers, because the application of the
employment conditions of the previous collective bargaining agreement
would breach the principle of legality and, consequently, article 85.1
of the Statue of Workers (the “SW”).
The appellants referred to the rebus sic stantibus provision,
but the SC stated that for this provision to apply the following
conditions must exist: (i) extraordinary alteration of the circumstances
when the agreement is executed; (ii) distinct lack of proportionality
between the parties’ undertakings; and (iii) existence of clearly
unforeseeable and totally unexpected circumstances.
The SC rejected the application of the mentioned provision and
confirmed that the preeminence of an essential provision, such as that
set out in article 35.1 of the SW (which establishes the rates of
extraordinary hours as a minimum that can only be increased by the
parties, but not reduced), does not constitute an extraordinary
alteration of the circumstances. In addition, the appellants did not
evidence the significance of the financial imbalance caused by the
application of article 85.1 of the SW in the absence of provisions in
the CBA.
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3. The loss of a contract constitutes an objective ground for the
termination of employment
Judgment of the Labour Chamber of the Supreme Court dated 16 May
2011
In this case the SC applied the regulation in force prior to the
reform introduced by Law 35/2010, of 17 September, on urgent measures to
reform the labour market, to a case in which the employee claimed he had
been unfairly dismissed. He had been dismissed on organisational grounds
following the loss of the company’s main client. The company cited the
decrease in its average total revenue in comparison with the previous
year, and predicted that this would continue in the following years. The
company also stated that the employee provided a service that was to
disappear as a consequence of the loss of its client.
The SC stated that when organisational grounds are used to justify a
dismissal, case law has established that the dismissal must be a
necessary step to contribute to overcoming the company’s difficulties
through the improved allocation of resources. In this regard, it is
essential that the difficulties cited cannot be easily overcome and that
the action adopted should be reasonable in terms of organisational
productivity and not merely a means to increase the company’s earnings.
The SC held that the dismissal was legal when a client for which the
employee was working had been lost, provided that there was no suitable
alternative vacancy in the workplace. The SC also held that the company
is under no obligation to reallocate the worker to another workplace.
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4. Insufficient payment of an award for unfair dismissal may be
remedied to appeal
Judgement of the Labour Chamber of the Supreme Court dated 20
April 2011
In this Judgment, the SC upheld the company’s appeal in a case in
which, in order to appeal the declaration of unfair dismissal, the
company only deposited the back pay award after the dismissal appeal
hearing but not the compensation payment. The company had lost the
judgment under appeal as a consequence.
The SC held that such a failure to make the deposit may be remedied
for the following reasons: (i) the decision imposing the payment of an
award for unfair dismissal is always for an overall total amount,
regardless of the number of different items which make up the overall
payment; (ii) the deposit of the amount awarded is carried out in a
single instalment, with no breakdown of its differing items; (iii)
pursuant to the Constitutional Court’s case law on the doctrine of
“aggravating formalism” (formalismo enervante), the right to a
due process rejects disproportionate measures being taken against
procedural errors, when they may be remedied without detriment to other
constitutional rights; and (iv) the SC’s case law distinguishes between
the “total failure to carry out the deposit obligation” due to the
intention of the party ordered to make the payment or “the lack of the
most basic diligence”, and the insufficiency of the deposit due to an
error. In such cases, only the total failure to make the deposit may not
be remedied.
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5. Repeated payment of a special bonus is a more favourable
condition
Judgment of the Labour Chamber of the Supreme Court dated 4 April
2011
A company had been paying its employees a special bonus for ten years,
which was not being awarded according to any specific parameter. The
employees issued a claim against the company for the failure to pay the
special bonus over the last two years.
The first instance judgment held that in the absence of evidence on
the right to the special bonus, it should be understood as a voluntary
and extraordinary payment made by the company, and therefore not as a
consolidated payment.
To determine whether the annual special bonus should be interpreted
as a mere discretionary benefit or the consolidation of a more
favourable condition, the SC referred to case law that stated that “in
order to maintain the existence of a more favourable condition, such
condition must have been acquired and enjoyed as a consequence of its
consolidation being claimed due to a clear voluntary concession. The
more favourable condition must have been incorporated into the
contractual nexus and it must be proven that the company is willing to
offer such condition, which surpasses the conditions established in the
legal or contractual provisions applicable to employment contracts. The
incorporation of this more favourable condition in the contractual nexus
prevents it from being removed from the contract due to the employer’s
unilateral decision. Therefore, the more favourable condition will be in
force and survive unless the parties agree otherwise, or if it is not
compensated or annulled by means of a collective agreement or subsequent
regulations, which are more favourable than the previous circumstances.
The SC held that the payment of a special bonus on the same date each
year for more than ten years, which is gradually increased without any
objectives or conditions being set for its eligibility, constitutes a
more favourable condition that must be respected by the company.
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6. Collective bargaining agreement applicable to transfers of
undertakings
Judgment of the Labour Chamber of the Supreme Court dated 31
March 2011
This case determined the collective bargaining agreement applicable
to a transfer of undertakings. An industrial dispute arose after a
transfer of undertaking; the workers claimed a variable productivity
supplement and time off for personal matters according to their length
of service, because it was more favourable in the collective bargaining
agreement in force at the time of the dispute.
The collective agreement applicable in the company after the transfer
of undertaking, referred to the collective bargaining agreement of
another company in certain areas. It was therefore disputed whether the
applicable collective bargaining agreement would be the one in force on
the date the collective agreement was signed or whether it should be the
latest collective bargaining agreement in force (after several renewals),
that is to say, whether or not the reference to the collective
bargaining agreement was static in time or dynamic.
Despite the collective agreement referring to the 2000 collective
bargaining agreement for transfers of undertakings, article 44 of the SW
limits the temporal scope of the 2000 collective bargaining agreement to
the moment another collective bargaining agreement replacing it enters
into force. This legal rule does not prevent a specific collective
agreement from being agreed to the contrary. However, because the
duration of the initial collective bargaining agreement (2000) was not
agreed to be permanent, the applicable collective bargaining agreement
should be decided pursuant to article 44.4 of the SW, that is, the
latest collective bargaining agreement in force. Otherwise, the
regulations on the relationships between workers and companies would
remain set in the past and become obsolete.
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7. Termination of employment contract rendered void due to breach of
formal requirement
Judgment of the Labour Chamber of the Supreme Court dated 7 March
2011
In this case, the company made an employee redundant for objective
reasons, more specifically, for economic reasons due to a withdrawal of
orders from a client. Both the first instance and appeal decisions held
that the dismissal was fair as it was based on economic reasons arising
from the loss of orders. It was further held that failure to deliver a
copy of the letter notifying the dismissal to the employee
representatives did not mean that the dismissal was void, as there is no
notice period in such cases and it was therefore impossible to notify
the employee representatives.
However, the SC re-examined the case and decided that although the
literal wording of article 53.1 a) of the SW sets out the obligation to
provide a copy of the letter notifying the dismissal to the employee
representatives, this obligation further requires the delivery of a copy
of the dismissal letter provided to the employee.
Therefore, it is not sufficient to provide information to the
employee representatives, a copy of the dismissal letter must also be
delivered. The SC held that the dismissal was void and the legal
consequences of article 53.4 of the SW applied.
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8. Breach of the right to strike
Judgment of the Labour Chamber of the National Court dated 13
June 2011
The National Court (“NC”) examined a claim filed by the employee
representatives of a company claiming the rights to strike and freedom
of association.
As there was a lack of agreement in the collective negotiation, the
employees organised a series of partial stoppages which eventually led
to a general strike.
The company’s managing director decided to send a letter to the
employees the day before the general strike was due to take place,
warning them of the negative consequences (terminations of employment
contracts, dismissals etc.) if the strike went ahead as planned.
The NC placed great emphasis on the supremacy of the right to strike
over other rights, such as the management of the company, which although
important does not justify the sending of a letter to warn the employees
of the negative consequences in order to affect the strike.
The NC therefore held that the letter breached the employees’ right
to strike.
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Reinstatement
of the transitional period for the free movement of Romanian workers