January 2012



The Spanish government has approved Royal Decree 20/2011 of 30 December on urgent public budget, tax and financial measures, which aims to reduce the budget deficit and achieve budgetary stability.


Order ESS/1/2012 of 5 January establishes the 2012 procedure for recruiting foreign employees by way of seasonal contracts or contracts for specific works or services.


The Spanish Supreme Court reaffirms the interpretation that an employer is allowed to monitor the use of computer resources by employees.

 4. Non-compete clause

The Supreme Court has once again ruled that the bilateral nature of non-compete agreements means that their fulfilment cannot be left to the discretion of one party.


This judgment establishes an exceptional circumstance in which a golden parachute clause in a senior management contract was held invalid on the basis that the manager was not a good faith third party.

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Royal Decree-Law 20/2011 of 30 December on urgent public budget, tax and financial measures to reduce the budget deficit

This Royal Decree-Law (“RDL”) affects many areas, however this newsletter only analyses labour matters.

One of the most important measures is the freezing of public sector workers’ remuneration, which includes salary costs, occupational pension scheme contributions and collective insurance contracts that also cover retirement benefits. The salary freeze affects all levels of public sector workers, including senior management posts. This measure may be avoided if the Treasury Department issues a report to such effect.

Public sector access exams have been suspended for 2012. As a result, public authorities will not employ any new personnel, except for individuals who were selected during previous processes. The 2012 suspension also applies to temporary employees becoming permanent employees or public sector workers who fall under the scope of the Basic Statute of Public Sector Employees.

Temporary staff will not be employed to cover vacancies except in exceptional cases where there is an urgent need that must be met immediately. These exceptional circumstances will be restricted to sectors, positions and professional categories that are considered priorities or that affect essential public services, such as the armed forces, the healthcare sector, education and public bodies dedicated to monitoring and fighting against tax evasion and labour fraud.

Article 13 updates the social security contribution bases and rates applicable to groups such as self-employed workers or self-employed agricultural workers. The average ordinary working week of a public sector worker must not exceed 37 and a half hours.

The professional requalification programme for individuals who use up their unemployment benefits is extended by six months.

In addition, the latest date to start training activities under training and apprenticeship contracts signed between 31 August 2011 and 30 September 2011, has been extended to 31 January 2012.

Law 9/2009 of 6 October, which extends the duration of paternity leave for the birth, adoption and fostering of children, will not enter into force until 1 January 2013.

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Order ESS/1/2012 of 5 January, regulating collective recruitment in countries of origin for 2012

Order ESS/1/2012 (the “Order”) was published in the Official Spanish Gazette of 6 January and entered into force on the same day. The Order establishes the 2012 procedure for recruiting non-EU employees in their countries of origin.

After consulting the autonomous communities and receiving information from the Spanish Public Employment Service on the national employment situation, the Ministry of Labour and Social Security has decided not to approve permanent employment contracts and not to grant search work permits to children and grandchildren of Spanish emigrants. Furthermore, visas for certain occupations will not be granted.

The Order only sets out the specifications concerning the recruitment of seasonal employees or employees with contracts for works or services.

Temporary job offers include the following:

(a) seasonal activities with a maximum duration of nine out of twelve consecutive months. In agricultural activities the contracts may be unified or linked; and

(b) work or services with a maximum duration of one year. Activities include the assembly of industrial plants or power plants, the construction of infrastructures, buildings and railways, networks for the supply of gas, electricity and telephone services, the installation and maintenance of production equipment as well as its start-up and repair.

In the selection processes held in the countries of origin, employers may directly or indirectly participate, upon request, as may representatives of the Directorate General of Immigration. Trade union and employer representatives may also act as consultants in the process, provided the governments of both countries request their participation.

Applications must be made on an official form and submitted at least three months prior to the start of the activity. This must be accompanied by the documentation specified in the Order. Preference will be granted to applications from countries with which Spain has entered into migration agreements.

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Judgment of the Labour Chamber of the Supreme Court dated 6 October 2011

In this case, an employee filed a claim against her employer after she had signed a letter that the company had sent all employees informing them of the prohibition to use company resources for personal use during and after working hours.

The company subsequently and without providing any notice, carried out an inspection and checked the computers of the claimant and of another employee. The inspection was carried out using a “non-invasive” software program through which files with passwords could not be accessed.

The claimant, the technicians who install the software, company and employee representatives and two employees were all present while the computer was being checked.

The Supreme Court considered whether reasonable personal use of computer resources by employees had been generally tolerated by the company. If so, a "reasonable expectation of confidentiality" would have been created for the employee in relation to the improper use of computer resources, which would limit the employer’s capacity to control their use.

The key question was whether or not an employee has the right to use computer resources for personal use even when the company has expressly prohibited it and warned of the possibility of inspections.

The Supreme Court held that although the company had not expressly issued a warning regarding the potential installation of software to monitor the use of computer resources, the prohibition was so categorical that there was no room to consider that the employee has a right to privacy when using the computer resources put at his/her disposal. Otherwise, an employee could create a privacy stronghold using resources that do not belong to him/her and the use of which is subject to his/her employer’s instructions.

The court found that if there is a prohibition there is no tolerance and thus no “reasonable expectation of confidentiality”, regardless of the information provided by the company in relation to monitoring, employee control and their scope.

The dissenting judges in this case considered that the judgment was a step-back in the protection of fundamental rights, namely, an employee’s right to privacy, because although the company notified the employees of the prohibition to use company resources for personal use, it did not inform about the potential monitoring and controls. Therefore, in the opinion of the dissenting judges, the company created a "reasonable expectation of privacy" and any breach of that expectation constitutes the employer’s interference with the employee’s right to privacy in the performance of his/her work.

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4. Non-compete clause

Judgment of the Labour Chamber of the Supreme Court dated 8 November 2011

Pursuant to an employee’s employment contract, for the duration of the contract and the six months following its termination, the employee could not perform a similar activity to that she performed in her current post. As consideration, upon termination the employee was entitled to be paid one third of her average wage over the last year. However, the company reserved the right to unilaterally exempt the employee from the obligation to fulfil the non-compete clause.

The employee informed the company of her voluntary resignation. However, as she was going to work in a different sector and would not be competing with her previous employer, the company refused to pay her the non-compete compensation.

The first instance court upheld the employee’s claim, but the Labour Chamber of the High Court of Justice of Catalonia reversed this judgment on the grounds that the company could waive the employee’s obligation, and consequently she had no right to receive the compensation.

On appeal, the Labour Chamber of the Supreme Court held, in line with its doctrine, that non-compete agreements create bilateral obligations for the parties and therefore their fulfilment cannot depend on just one of them. As such, the clause in this case was invalid.

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Judgment of the Labour Chamber of the High Court of Justice of Castile and León (Valladolid) dated 10 June 2011

The Labour Chamber of the High Court of Justice of Castile and León (the “Court”) ruled on the validity of an indemnity clause in a senior management contract. Although the dispute remained unresolved at first instance, the Court began the interlocutory appeal on the basis of sufficient facts, the appellant’s implicit request, and the ability of both parties to defend their interests on appeal.

The Court first held the contract to be valid on the basis of the principle of preservation of contract.

The Court stated that indemnity clauses are in general legal and designed to strengthen the employee’s position against a company’s unilateral termination of an employment contract. The disputed clause was not included in the written contract or discussed by any managerial body and was instead approved by minority shareholders.

Under normal circumstances, a senior manager is afforded protection as a result of his/her capacity as a good faith third party. Nevertheless, the Court considered that, in this specific case, there were significant conflicts among shareholders and the sole purpose of the disputed clause was to ensure more advantageous economic conditions in connection with an inevitable event—a change in the decision-making body which would presumably also involve the dismissal of the manager.

The Court held the golden parachute clause to be illegal given that it was misleading and its sole purpose was to cause the company a financial loss. The minority shareholders’ approval of a clause designed to harm the majority shareholders constituted an abuse of a right.

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