November 2011

LABOUR LAW


 1. Youth training schemes

Royal Decree 1543/2011 of 31 October regulates training schemes in companies or groups of companies that enter into agreements with the public employment services. They are aimed at young people who have problems finding work due to lack of work experience.

 2. Reform of the regulatory framework of mutual insurance companies for work-related accidents and occupational illnesses

Royal Decree 1622/2011 of 14 November reforms the regulatory framework applicable to mutual insurance companies and adapts their performance to the amendment of article 32 of the Law 31/1995 on prevention of occupational hazards.

 3. Special labour relationship. Domestic workers

Royal Decree 1620/2011 of 14 November regulates the employment relationship of domestic workers.

 4. Social Security. Collection procedure

Royal Decree 1621/2011 of 14 November amends specific assumptions and forecasts relating to refunds, payments and income or voluntary cooperation in the management of financial institutions, introducing flexibility in the procedure related to the alienation of encumbered assets.

 5. Holiday periods. Unilateral imposition without the approval of the employee representatives

The National Court held that a company cannot unilaterally impose the holiday schedule without the agreement of the employee representatives.

 6. Compensation deposit. Appropriate court

The Supreme Court held that an indemnity deposit in connection with an unlawful dismissal may be made to either the court corresponding to the location where the services were rendered or that of the respondent’s domicile, unless other proceedings on the same matter have already been initiated.

 7. Evidence. Admissibility of audio and audiovisual recordings of conversations between an employer and a third party

The High Court of Madrid held that the audio and audiovisual recording of an employer’s conversation regarding the employee’s work performance and the decision to dismiss him/her did not violate the right to secrecy of communications or the respondent’s right to honour and personal privacy and was therefore admissible evidence.

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1. Youth training schemes

Royal Decree 1543/2011 of 31 October, regulating training schemes in companies (Official Spanish Gazette of 18 November)

Royal Decree 1543/2011 regulates training schemes in companies or groups of companies that enter into agreements with the Spanish employment services. They are aimed at young people who have problems finding work due to lack of work experience. The training schemes do not establish an employment relationship between the company and the trainees.

Beneficiaries

The beneficiaries of the training schemes are young unemployed persons registered with the job centre, aged between 18 and 25, with a university degree, medium or higher-level vocational training in arts or sports, or a professional training certificate. The beneficiaries must not have had an employment relationship or professional experience in the same business activity for more than three months.

External, curricular and extra-curricular academic training schemes for university students, which are governed by specific regulations, are excluded from the scope of this Royal Decree.

Content of the training schemes

The training schemes will be carried out in the workplace of the company or of the group of companies, under the supervision of a tutor. Their duration will range between three and nine months. Upon completion of the training schemes, the companies will provide a certificate with information about the training provided, the term and dates.

The agreement signed between the company and the person who will carry out the training scheme will set out the specific terms of the training, its duration, the hours and timetable, the workplace or centres where they will take place, and the tutorials and certification system. The company must inform the employee representatives and the public employment services about the signing of these agreements.

Remuneration

The companies or groups of companies where the participants receive training will provide them a grant amounting to a minimum of 80% of the public revenue index (IPREM) applicable at the time. The beneficiaries will be included in the Social Security in accordance with Royal Decree 1493/2011 of 24 October, which regulates the terms and conditions for the inclusion of individuals participating in training programmes in the Social Security general regime. This Royal Decree develops the regulations of the third additional provision of Law 27/2011 of 1 August on the updating, adequacy and modernisation of the Social Security.

Partnership agreements for the training schemes

Companies that offer training schemes must sign an agreement with the relevant Public Employment Service. If the training schemes are carried out in companies with centres in more than one autonomous region, the agreement must be signed with the National Public Employment Service.

The agreements will expressly set out the procedure to monitor the training scheme in order to ensure compliance with the applicable requirements.

Any employment contracts signed after the participation in the training schemes may benefit from the recruitment incentives existing when the contract is signed.

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2. Reform of the regulatory framework of mutual insurance companies for work-related accidents and occupational illnesses

Royal Decree 1622/2011 of 14 November, amending the Regulation on the collaboration of Social Security mutual insurance companies for work-related accidents and occupational illnesses, approved by Royal Decree 1993/1995 of 7 December (Official Spanish Gazette of 17 November)

Royal Decree 1622/2011 (“RD 1622/2011”) provides a regulatory development to enable the reform introduced in the Consolidated Text of the Social Security, which simplified the reserves that mutual insurance companies had to create for professional contingencies. One of the main objectives of RD 1622/2011 is to adapt the performance of mutual insurance companies, as holders of the equity of the relevant mutual insurance company, to the amendment of article 32 of the Law on the prevention of occupational hazards, implemented by Law 32/2010 of 5 August, which establishes a protection system for self-employed workers whose business activities have ceased.

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3. Special labour relationship. Domestic workers

Royal Decree 1620/2011 of 14 November, regulating the special nature of the labour relationship of domestic workers (Official Spanish Gazette of 17 November)

After the approval of Law 27/2011 of 1 August, which included the special Social Security regime for domestic workers in the general Social Security regime, new regulations are necessary for individuals engaged in household employment. Royal Decree 1620/2011 (“RD 1620/2011”) has been implemented to dignify their working conditions and to establish increased and improved rights.

The employment relationship between a homeowner and a worker who provides remunerated services in the family home on a dependent basis and who is paid by the homeowner, is classified as labour relationship of a special nature.

The employment contract may be formalised either in writing or orally, although it may have to be set out in writing according to certain legal provisions and, in any event, if   executed for a fixed-term of four weeks or over. If not executed in writing, the employment contract is presumed to have an indefinite term and be a full-time contract when its duration exceeds four weeks, unless there is evidence to the contrary. The employer will be considered to have notified the National Public Employment Service within the required term by informing the General Treasury of the Social Security about registration and deregistration with the Social Security.

The minimum professional wage will apply to these contracts. This minimum wage comprises the entire working day, and when benefits in kind are provided, such as accommodation or maintenance, the percentage agreed by the parties may be discounted for these items, provided that payment in cash of, at least, the monthly minimum wage is guaranteed. The aggregate amount of the different items cannot exceed 30% of the total salary.

The working week must involve a maximum of 40 hours of actual work, notwithstanding the hours that may be agreed between the parties during which the employee’s presence is required. The amount of time that the employee must be physically present must not exceed 20 hours per week on average over a period of reference of one month and the remuneration will be the same as for a normal working hour. The worker will be entitled to weekly rest of thirty-six consecutive hours, which will include, as a general rule, Saturday afternoons or Monday mornings and Sundays. The worker will also be entitled to 30 calendar days of holiday leave per year.

The contract can be terminated, among other causes, for disciplinary reasons or for no reason by the employer unilaterally. In the latter case, the employer must notify the domestic worker in writing 20 or 7 days in advance, depending on whether the term of the contract exceeds one year. Moreover, the worker will be entitled to a compensation of 12 days of salary per year worked, with a maximum limit of six months. The notice may be substituted for compensation equivalent to the wages that would be due during the same period, which will be paid fully in cash.

RD 1620/2011 applies to contracts in force when the law became effective on 18 November, except for the amount of compensation to be paid upon the unilateral termination of the contract by the employer. This compensation only applies to contracts executed after the entry into force of RD 1620/2011.

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4. Social Security. Collection procedure

Royal Decree 1621/2011 of 14 November amending the general regulations on the social security collection procedure, approved by Royal Decree 1415/2004 of 11 June (Official Spanish Gazette of 17 November)

Royal Decree 1621/2011 (the “Royal Decree”) amends the general regulations on the social security collection procedure and makes other modifications to accommodate them to the current conditions and new requirements arising from the Social Security’s collection mechanism.

Notifications in connection with the collection procedure must be made through the Social Security’s digital headquarters and will be considered as having been communicated when access to its content in the digital headquarters is made, provided that this takes place within 10 calendar days of receipt of the notification.

This also applies to individuals who have outstanding debts with the Social Security but who are not obligated to voluntarily adhere to the system of electronic transfer of data, and to mutual insurance companies for occupational accidents and illnesses recognised by the Social Security.

For individuals who choose not to be notified by electronic means, notifications must be made to the address expressly indicated by the interested party and, failing that, to the address registered with the Social Security.

The Royal Decree introduces the novel measure of allowing financial institutions to assist the Social Security with its obligations as collaborators in the collection system.

Other important changes include the amendment of article 14 of Royal Decree 1415/2004 on secondary liability with the purpose of bringing the regulations on the opening of proceedings and on the issue of the debt claim in line with current regulations on joint and several liabilities.

The procedure for the alienation of encumbered property is more comprehensively regulated and allows direct awards. Articles 113 and 120.7 have been redrafted and two new articles have been introduced: articles 113 bis and 123 bis.

Finally, the Royal Decree amends the general regulations on the financial management of the Social Security, approved by Royal Decree 1391/1995 of 4 August and the general regulations on contributions and other social security payments, approved by Royal Decree 2064/1995 of 22 December.

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5. Holiday periods. Unilateral imposition without the approval of the employee representatives

Judgment of the National Court dated 22 June 2011

The basis of the dispute was whether a company’s general requirement that holidays be taken in August violates article 38.2 of the Statute of Workers (the “SW”) in relation to article 26 of the corresponding collective bargaining agreement.

The National Court stated that the standard way of establishing holiday periods under article 38.2 of the SW is the agreement between the employer and the worker, subject to the provisions on holiday planning established in the corresponding collective bargaining agreement, which must meet the workers’ needs for rest, as guaranteed by Article 40.2 Spanish Constitution and the company’s production needs, enshrined in Article 38 of the Spanish Constitution.

In this case, the National Court held that the company had been unilaterally imposing the holiday calendar and therefore voided the company’s holiday instructions and imposed mandatory negotiations in accordance with the provisions of article 38.2 of the SW.

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6. Compensation deposit. Appropriate court

Judgment of the National Court dated 30 June 2011

The National Court (the “NC”) analysed whether the appropriate court to make the compensation deposit for unlawful dismissal is that corresponding to the place where the services are rendered or that of the respondent’s domicile.

The NC held that its seems more rational to consider valid the deposit made before the labour court of the address of the company rather than only the deposit made before the court which will hear the claim for dismissal because the worker decided to file the claim with the court of the workplace where he renders his/her services. Article 10.1 of the Labour Procedure Law establishes that dismissal claims can be heard in two alternative jurisdictions, at the claimant’s discretion, and that a deposit made in either one is valid under article 56.2 of the Statute of Workers. The NC stated that any other ruling would limit the validity of the deposit to the sole discretion of the claimant, because it would be sufficient to initiate proceedings in the respondent’s domicile in order to compromise the validity of payments made in the place where services are rendered, or vice versa.

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7. Evidence. Admissibility of audio and audiovisual recordings of conversations between an employer and a third party

Judgment of the High Court of Justice of Madrid dated 8 July 2011

The claimant alleged that the fundamental right to make use of the means of evidence established by law had been violated as the lower court judge did not admit the audiovisual recordings brought to court and then declared that the facts of the case had not been duly proven. At the trial, the claimant submitted evidence consisting of audio and audiovisual recordings, which were not admitted by the judge on the grounds that the recordings were obtained “without the consent of the person being recorded”. The claimant argued that this was the only means of evidence available to try to prove  the higher base salary that he/she was claiming in connection with his/her dismissal. The claimant justified resorting to this evidence on the basis of the difficulty of proving facts involving non-payroll payments made in cash, which cannot be confirmed through accounting or banking information.

The High Court of Justice of Madrid (“HCJM”) stated that evidence obtained illegally or in violation of fundamental and civil rights lacks probative value, as provided for all types of judicial proceedings in article 11.1 of the Basic Law on the judiciary.

The High Court of Justice of Madrid sought to clarify whether both recordings(audio and audiovisual) presented by the employee in trial violated a fundamental right of the employer, going beyond the mere assertion that a violation took place because there was no consent to the recordings. Therefore, the question is whether the recordings violate the right to the secrecy of communications enshrined in article 18.3 of the Spanish Constitution or the right to honour, privacy and the right of image under article 18.1.

Following the doctrine of the Constitutional Court, the High Court of Justice of Madrid held that the recording of the words of the employer on the employee’s work performance and his/her decision to dismiss the employee were admissible because they did not violate the secrecy of communications or the employer’s right to honour and personal privacy. The HCJM also considered that the requirements of proportionality and necessity laid down by the Constitutional Court had been satisfied. The proportionality principle was satisfied given that it is very difficult to prove the employer’s actions by conventional means of evidence. The necessity principle was also satisfied given its essential nature to establish what actually happened.

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