The new Law Regulating the Labour Courts repeals the Labour Procedure
Law and enters into force on 11 December 2011
The new Insolvency Law reform is a step forward in the attempt to
speed up insolvency proceedings. The measures set out in the Insolvency
Law and the Labour Reform implemented by Law 35/2010 give priority to
the core principles of labour law during the analysis of labour-related
matters in insolvency proceedings
Royal Decree 1493/2011 of 24 October, regulating the inclusion of
individuals in the general social security system and developing Law
27/2011 of 1 August on the updating, adequacy and modernisation of the
Social Security, allows participants of training programmes to be
included as employees in the general social security system. Royal
Decree 1493/2011 permits extraordinary agreements to be executed with
the Social Security for individuals who completed training programmes
prior to the entry into force of the new regulation limited to a
two-year period
The National Court held that an employer is not entitled to
unilaterally change times of shifts if these changes mean that the
employee has to remain longer at the workplace. It was further
established that clocking in before reaching their workplace is a more
beneficial entitlement for the employee
If working hours are established in a collective bargaining
agreement, even though the company has signed separate individual
agreements with all its workers, it cannot establish
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1. New labour procedure law
Law 36/2011 of 10 October regulating the labour courts
The new Law Regulating the Labour Courts (LRLC) will enter
into force on 11 December 2011. It is part of the Strategic Plan to
Modernise the Justice System and responds to the need for structural
reform in the Spanish justice system, which is facing an increased
workload.
The LRLC maintains the structure, numbering and even most articles of
the former law. The main new provisions are in the following areas: (i)
unification and modification of the labour courts’ jurisdiction; (ii)
capacity, standing and representation in court; (iii) modernisation and
streamlining of procedures; (iv) means of challenge; and (v)
enforcement.
I. Unification and modification of the labour courts’ jurisdiction
The LRLC seeks to ensure that all court proceedings concerning
workplace accidents are dealt with by the labour courts, including
damages claims.
The labour courts will now also be responsible for recognising,
evaluating and classifying the degrees of disability referred to in Law
39/2006 of 14 December on the Promotion of Personal Independence and
Caring for Dependent Persons. Labour judges will also handle all appeals
of labour authority decisions in collective redundancy proceedings.
Furthermore, the labour courts will have jurisdiction over all cases
involving the breach of the fundamental rights and freedoms of employers
and any third party linked to them. In conclusion, the labour courts are
to become the “natural judge” of all public policies relating to social
protection.
II. Capacity, standing and representation in court
The LRLC increases the involvement in court proceedings of the Salary
Guarantee Fund (FOGASA) and other entities that collaborate with the
Social Security. They must be called to appear in those cases in which
they may have to pay part of the compensation awarded to employees. It
is also made easier for employee representatives or trade unions to
represent employees when all or the majority of a company’s employees
are affected. The obligation on trade unions to make deposits with the
court is also lifted.
III. Modernisation and streamlining of procedures
The LRLC takes advantage of the new “judicial office” to do away with
unnecessary proceedings and use new technologies to reduce processing
times. From now on it will also be possible to join claims relating to
workplace accidents and occupational illnesses deriving from the same
incident in the same proceedings. In the same vein, dismissal actions
and claims seeking payment of pending wages can also be combined.
A new small debts procedure is created for claims of less than EUR
6,000 when the debt is due and payable.
In relation to workplace accidents, the burden of proof is reversed,
so that it is the parties responsible for safety who must evidence that
the necessary health and safety measures have been adopted. Provisions
are also put in place to simplify the situations in which the court can
issue a verbal ruling.
The LRLC also promotes the use of mediation and arbitration
IV. Means of challenge
Measures are put in place to make it easier to appeal when
proceedings are terminated prematurely, and to increase the situations
in which an appeal to unify doctrine may be lodged.
V. Enforcement
It will now be possible to reach settlement agreements during
enforcement proceedings.
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2. Insolvency Law reform
The aim of Law 38/2011 (the “New Law”) is to speed up
insolvency proceedings along the lines of Royal Decree 3/2009 of 27
March. This Royal Decree was enacted, among other reasons, to support
employees who are affected by collective dismissal procedures in
insolvent companies. The New Law will come into force on 1 January 2012
providing a large-scale reform in insolvency legislation
Following the criteria of the Insolvency Law and the Labour Reform
implemented by Law 35/2010 of 17 September, the New Law has given
priority to the core principles of labour law during the analysis of
labour-related matters in insolvency proceedings. Specifically, article
64 of the New Law tries to give more weight to the consequences of the
insolvency proceedings on employees, while attempting to reduce the
jurisdictional conflicts with labour authorities and the labour courts.
Upon a more thorough analysis of the New Law, the following aspects
of the reform are particularly worth highlighting:
Article 8, which deals with the competent judge in insolvency
proceedings, clarifies the meaning of collective dismissal, bringing it
in line with the recent labour law reform. Conversely, article 44 on the
continuation of a company’s business activity, is amended to state that
if all or part of a company is closed, the insolvency receivers must
explain and clarify, in the request for the collective dismissal, the
reasons for and objective of the collective dismissal.
Article 64 has been considerably amended, to the extent that only
three sections remain unaltered. After the reform, the judge hearing the
insolvency proceedings will have the final say as regards collective
transfers.
Moreover, if a collective dismissal is being processed when a company
is declared insolvent, the labour authorities must refer all the
information to the judge hearing the insolvency proceedings. In this
regard, the procedures carried out by the labour authorities until the
declaration of insolvency will continue to be valid for the purposes of
the insolvency proceedings. If upon the declaration of insolvency, a
decision regarding a collective dismissal procedure has already been
issued, the decision will have to be enforced by the insolvency
receivers. In any event, the declaration of insolvency must be
communicated to the labour authorities for all relevant purposes.
As regards the consultation period, governed by article 64(5), the
insolvent company may now be summoned to the consultation, provided that
the judge hearing the case deems it appropriate and the insolvent
company’s management powers have not been suspended. Moreover, other
legal persons or individuals forming a part of the insolvent company’s
corporate structure may also be summoned to the consultation. The
possibility of replacing the consultation with arbitration or mediation
proceedings is also foreseen. However, the consultation will not be
necessary if the collective dismissal application includes an agreement
between the insolvency receivers and the employee representatives. The
agreement must contain the names of the employees and their respective
compensation. If the consultation period concludes without the parties
having reached an agreement, the court will call the parties to a
hearing where they will be able to submit documentary evidence or
present written allegations within three days. The purpose of these
measures is to ensure that the most consensual judgment is reached.
Article 64(8) establishes that the final judgment ordering the
collective suspension or termination of employees’ employment contracts
may be appealed by the receivers, the insolvent party, the employees and
by the Spanish Salary Guarantee Fund (FOGASA).
Article 64(10) includes a significant amendment: the termination of
collective employment contracts will be considered collective dismissals
when the dismissal is due to major changes in labour conditions or due
to an employer’s breach of contract. They will be considered collective
dismissals as of the approval of the start of the collective dismissal
procedure. Subsequent individual procedures on the same matter will be
suspended until the collective dismissal procedure concludes with the
issuance of a final decision.
Article 65 clarifies that the insolvency receiver’s decision to
terminate or suspend senior executive contracts can be appealed before
the judge hearing the insolvency proceedings by means of the
labour-related insolvency procedure (incidente concursal). The
resulting judgment may be appealed for reconsideration.
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3. Inclusion of interns in the general social security system
Royal Decree 1493/2011 of 24 October, regulating the inclusion of
individuals in the general social security system and developing Law
27/2011 of 1 August on the updating, adequacy and modernisation of the
Social Security
Royal Decree 1493/2011 (“RD 1493/2011”) entered into force on
1 November and is designed to improve the general social security system
and regulate the status of individuals participating in remunerated
training programmes linked with university-level education or
professional training and financed by public and private entities.
For an individual to be included in the general social security
system, the training programme must involve work experience in
companies, institutions or entities that are not exclusively academic in
nature. The entity financing the programme will be considered as the
employer and is subject to the rights and obligations of the general
social security system.
Individuals who participated in qualifying training programmes before
the entry into force of RD 1493/2011 may enter into special
agreements with the Social Security Treasury to include the
corresponding contributions. This applies for a maximum period of two
years, once only, and regardless of whether or not the programme is
carried out in Spain. The contribution base will be the minimum
contribution under the general social security system at the time the
individual participated in a qualifying programme. The amount may be
paid through a lump sum or by instalments.
The contribution term will be the start and end date of the
qualifying training programme. Contributions and collections for common
and professional contingencies must be carried out in compliance with
the Budget Law and its implementing regulations on training contracts.
There is no obligation to make unemployment, Salary Guarantee Fund
(FOGASA) or vocational training contributions.
The sole transitional provision of RD 1493/2011 states that
participants of qualifying training programmes will be included in the
general social security system when RD 1493/2011 enters into
force and upon request of the body or entity financing the programme,
which must be registered as a company in the corresponding registry. The
contribution corresponding to November 2011 may be deposited without any
penalty or interest for late payment if made before 31 January 2012.
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4. An employer is not entitled to unilaterally change times of
shifts
Judgment of the National Court dated 13 June 2011
The defendant company had a three eight-hour shift system. In 2003, a
new system was introduced for shift changeovers. Under the new system,
employees ending and those starting their shift had to coincide for
fifteen minutes. In order to ensure that the changeovers took place, it
was agreed to increase the daily working hours by fifteen-minutes in
exchange for leave. After clocking in with a card system the employees
would go to the changing rooms, get changed and start their shift. They
would coincide at their workplace with the employees ending their shift
for the required fifteen minutes. The employees who had ended their
shift would changed out of their work clothes and clocked out using the
card system.
In December 2010, the company informed the employees that in future,
they would have to clock in and out using card readers located at each
change-over point. They would have to clock out before changing out of
their work clothes and the time required to get changed would not be
calculated as working time.
The issue at stake was whether clocking in before reaching the
change-over point has become an acquired right and whether the change in
the time-keeping system had substantially changed the employees’ working
conditions.
With regard to the acquired right issue, it was argued that as the
applicable collective bargaining agreement allowed for clocking in at
the entrance of the premises, before the employees had reached the
change-over point, this was an improvement of article 34.5 of the
Statute of Workers (the “SW”). This provision establishes that, for the
purposes of calculating working time, employees must be at their
workplace at the beginning and at the end of the working day.
As to whether or not the change amounted to a substantial change in
the working conditions, the National Court held that if employees had to
remain extra time at the company due to clocking in/out at change-over
points, without there being any economic, technical, organisational or
production-related reasons for this, the employer had unilaterally and
substantially modified the employees’ working conditions. The company
would have to adhere to the procedure established under article 41 of
the SW for such modifications to be correctly implemented.
The National Court held that the change constituted a substantial
modification of the employees’ working conditions and undermined the
principle of more beneficial entitlements.
irregular working hours without having agreed this change with the
employee representatives.
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5. A company cannot implement irregular working hours by means of
individual agreements with all its workers
Judgment of the National Court dated 9 May 2011
This case examined whether a company could introduce irregular
working hours by means of individual agreements with all its workers.
The ordinary daily working hours were regulated in a collective
bargaining agreement and the change had not been agreed with the
employee representatives.
The National Court (“NC”) upheld the claim filed by the trade
union. The NC declared that the absence of provisions on irregular
working hours in collective bargaining agreements, by default, implies
the application of article 34.2 of the Statute of Workers (“SW”),
which states that: “[...] irregular working hours can be established
throughout the year by means of a collective bargaining
agreement, or otherwise by an agreement between the company and the
employee representatives.” The NC considered article 34.2 to have
been violated as no agreement had been reached with the employee
representatives.
The NC also held that there had been a substantial change to the
employees’ working conditions and made reference to article 41.6 of the
SW, which states that the modification of working conditions laid down
in collective bargaining agreements must be implemented with the
agreement of the company and the employee representatives or trade union
representatives.
Consequently, the NC held that the changes implemented by the company
regarding timetables, shifts and working hours were null, as well as the
contract novations, and that the workers affected by the dispute had the
right to have their previous working conditions reinstated.
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1.
New labour procedure law