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February 2012]
Restricting the right of unions and employee representatives to
appear in the “classification phase” of insolvency proceedings is a
violation of their right to access to justice.
In order to avoid sex-based discrimination, the mandatory six-week
maternity leave taken during the temporary suspension of a worker’s
contract must be considered productive time for the purposes of an
incentive policy.
Liquidity problems existing and known at the time of the consultation
period, do not justify a company’s delay in the payment of an agreed
collective dismissal compensation if a works council has already
rejected a proposal for deferred payments and payments in instalments.
The Supreme Court consolidated the case law on whether the signing of
an acquittance letter should be construed as consent to the termination
of the employment contract. It was held that the mere acceptance of the
amounts owed and offered by the company does not signify an employee’s
willingness to terminate the employment relationship.
The Supreme Court’s unified case law is that severance payments made
by means of a bank transfer are valid in that they meet the statutory
requirement regarding when the worker’s severance payment must be made
available to him or her. The bank transfer can be ordered the day before
the termination of the contract.
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1. royal decree-law of 10 february, on urgent
measures to reform the labour market
[Click here to access our newsletter on the Labour Market Reform of
February 2012]
2. Unions and employee representatives have standing
to appear in the “classification phase” of insolvency proceedings
Judgment of the Constitutional Court dated
13 February 2012
In this case, a company started voluntary insolvency proceedings.
During the phase of the proceedings in which a decision on whether the
insolvency is to be deemed fortuitous or culpable (the classification
phase or sección de calificación in Spanish), the first instance court
declared any actions taken by unions and employees as a party to the
proceedings partially null even though they had been initially allowed.
The lower court considered that according to the Insolvency Law only the
insolvency trustee and the public prosecutor are entitled to intervene
in this phase of the proceedings. Therefore, only allegations made by
these parties will be binding on the court’s decision.
The unions and employee representatives filed a claim before the
Constitutional Court (the “CC”) requesting the recognition of their
right to take part in the classification phase and declare the
insolvency culpable.
The CC stated that, in order to protect the right to access to
justice, the courts must interpret the law broadly to determine who has
standing to take part in proceedings. According to the CC, the
Insolvency Law establishes that any person with a legitimate interest
must be allowed to take part in legal proceedings. Therefore, the CC
held that any union or employee representative affected by the
classification of the insolvency as fortuitous or deliberate is entitled
to take part in the classification phase of the insolvency proceedings.
Furthermore, it considered the lower court’s limitation of this right
unconstitutional.
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3. MANDATORY SIX-WEEK MATERNITY LEAVE MUST BE
CONSIDERED PRODUCTIVE TIME TO AVOID BEING DISCRIMINATORY
Judgment of the National Court dated 23
November 2011
A worker sued her employer alleging sex-based discrimination arising
from the company’s failure to consider her mandatory six weeks of
maternity leave “productive time” under its incentive policy. The
company’s policy was based on productive time, which included billable
time, time dedicated to business training, presale support and time
devoted to representative activities on the Works Council. Mandatory
maternity leave was not considered productive time.
The National Court (“NC”) held the exclusion of mandatory maternity
leave from the calculation method under the company’s policy to be sex-based
discrimination. The NC stated that, due to the mandatory nature of
maternity leave, female employees are at a disadvantage in incentive
policies based on productive time. The fact that the terms of the
incentive policy applied to both male and female employees did not
prevent it from being discriminatory. Furthermore, although the
incentive policy did not prevent employees on mandatory maternity leave
from accumulating sufficient productive time to receive 100% of the
variable remuneration, the NC stated that the policy remains
discriminatory on the basis that those employees have a shorter term in
which to potentially accrue productive time than other employees.
The NC recognised the right of employees to have their six-week
mandatory maternity leave be considered as productive time under the
company’s incentive policy based on productive time, as well as the
right to be paid the difference in salary that the discriminatory
calculation may have caused.
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4. DELAY IN THE PAYMENT OF COLLECTIVE DISMISSAL
COMPENSATION
Judgment of the Supreme Court dated 28
October 2011
The delay in the payment of compensation to five employees who had
been collectively dismissed, led the Labour and Social Security
Inspectorate to issue a notice of infringement and to propose a EUR
3,126 fine for a serious infringement of employee rights.
The possibilities of deferment and payment of the compensation in
instalments were discussed during the consultation period of the
collective dismissal, however the Works Council did not agree to it.
The infringement was challenged by the company, following which the
Labour Inspectorate initiated ex officio proceedings before the labour
courts to determine whether there had been a breach of employee rights.
The Labour Inspectorate’s competence to issue a decision on the
challenge of the infringement was not affected by the ex officio
proceedings. However, its decision should be in line with the labour
court’s ruling.
The High Court of Justice of Asturias upheld the labour court’s
judgment that paying the collective dismissal compensation to five
employees in instalments breached their rights. The Supreme Court ruled
on the appeal confirming this decision and specified that the
compensation should have been paid upon giving notice of the dismissals.
Therefore, the delay in paying the compensation, when it had not been
agreed to by the employees, violated their rights. The liquidity
constraints of the company did not justify any delay, particularly as
they were known when the consultation period took place.
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5. TERMINATION OF EMPLOYMENT RELATIONSHIP CANNOT BE
INFERRED FROM SIGNING SETTLEMENT ACQUITTANCE LETTER
Judgment of the Supreme Court dated 28
November 2011
In this case, an employee simultaneously received and signed both the
letter alleging dismissal for objective reasons and the corresponding
amounts, which included a severance payment, compensation for defaulting
the notice period and salary owing to the date of dismissal. The
employee acknowledged that he had “nothing further to claim from the
company.”
In its findings, the Supreme Court made a distinction between the
receipt and conformity with the amounts offered to the employee, and the
acceptance of the termination of an employment contract, which releases
the company from its obligations. The “acknowledgement and acceptance of
payment of the amounts owed does not imply the employee’s acceptance of
the termination of the contract, even though the signing of such a
document stems from a decision taken to terminate the contract and from
its effects.”
For an acquittance to have termination effects, it must be supported
by a clear, unambiguous intention to terminate stating that the purpose
is to avoid or end any disputes. Mere generic declarations of intent
will not suffice for this purpose. Furthermore, “the acceptance of
amounts received is insufficient, and the simple act of signing the
document prepared by the company to terminate the employment
relationship does not indicate the employee’s willingness to terminate
the contract.”
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6. PAYMENT OF SEVERANCE PAYMENT FOR OBJECTIVE
DISMISSAL BY BANK TRANSFER
Judgment of the Supreme Court dated 5
December 2011
Under the Supreme Court’s existing case law, a cheque is a valid
means of making a statutory severance payment to avoid back pay accruing
after the dismissal appeal hearing in unfair dismissal cases, as it is
in objective dismissal cases on the grounds that it is equivalent to
cash.
In this judgment, the Supreme Court held that this reasoning may
apply by analogy to severance payments made by bank transfer to the
employee’s bank account, as it is an even more reliable means of payment
than a cheque.
With regard to when the payment must be made, the Supreme Court held
that it can be assumed that a bank transfer ordered the day before the
termination of the contract will be received a few days later by the
employee. Therefore, it fulfils the statutory requirement applicable to
objective dismissals that the statutory severance payment of 20 days’
salary per year of service be made available together with the dismissal
letter.
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decree-law of 10 february, on urgent measures to reform the labour
market