A resolutive
condition involving the termination of a contract if an employee did not
reach his sales targets related to a continuous and voluntary decrease
in his performance levels and therefore could not be enforced without
referring to objective or subjective factors that, in this case, led to
the dismissal being deemed unfair.
The SC held that
there was a transfer of undertakings when the provision of public
healthcare services reverted from a concessionaire to the local council
as the local council continued to provide the services until the
contract was awarded to another concessionaire.
An employer has
standing in social security proceedings in which the mutual insurance
company is responsible for the temporary disability of a worker.
According to the
SC, the working hours and salary of religion teachers are not subject to
the rules on the substantial modification of working conditions
established in article 41 of the SW.
A worker died
from pulmonary edema while returning home following an appointment with
the company doctor. The SC upheld the cassation appeal and held that
death was the result of a work accident and that consequently the
employer’s insurance company was liable for the payment of the pension
to the widow.
A dismissal
letter must contain sufficient proof of the economic reason given for an
objective dismissal. The facts must be specific, and not abstract, in
order for the objective dismissal to be considered fair.
The failure of
an employer to specify the amount of losses as at the dismissal date
implies a lack of basis for an objective dismissal due to economic
reasons and the absence of sufficient detail for the dismissal to be
considered fair.
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1.TERMINATING AN EMPLOYMENT CONTRACT FOR NOT REACHING AGREED TARGETS
Judgment of
the Labour Chamber of the Supreme Court dated 14 December 2011
An employee
filed an unfair dismissal claim that was rejected by the labour court.
This ruling was upheld by the High Court of Justice (“HCJ”).
The employee then lodged an appeal at the Supreme Court (“SC”).
The issue at hand was whether a contract could be terminated, without
any indemnification, pursuant to a contractual clause drafted according
to article 49.1.b) of the Statute of Workers (“SW”), or
whether such clause was abusive and therefore inapplicable.
The SC linked
the termination on the grounds of a contractual clause on performance
levels to a disciplinary dismissal for a voluntary and continued
decrease in performance levels. The SC considered that even though the
termination of a contract due to the contractual breach of minimum
performance levels must be distinguished from a disciplinary dismissal
based on a voluntary and continued decrease in performance levels, in
both cases the employee is responsible for his low performance levels.
If a clause on
performance levels is not related to other factors, it is fraudulent.
The SC considered that in this type of clause the legal principles on
the resolution of reciprocal obligations (article 1,124 Civil Code) are
interlinked with employers’ disciplinary powers (article 54 SW).
In this case,
the SC considered that the clause on performance levels was applied
without referring to other factors, and therefore upheld the appeal and
held the dismissal to be unfair.
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2.TRANSFER OF UNDERTAKINGS UPON REVOCATION OF A PUBLIC CONCESSION
Judgment of
the Labour Chamber of the Supreme Court dated 26 January 2012
The claimants in
this case were the employees of the holder of a concession to provide
healthcare services in a geriatric centre. When the concessionaire
stopped providing the healthcare services, the local council took over
the services until they were awarded to a new concessionaire and
employed the previous concessionaire’s employees in the meantime.
However, as a result of outstanding salary payments, the employees filed
a claim against the former concessionaire and against the local council.
They argued that both employers were jointly and severally liable for
the unpaid salaries because there had been a transfer of undertaking.
The first
instance labour court found that the city council was not jointly and
severally liable. The employees then appealed to the HCJ. Their appeal
was upheld and the concessionaire and the local council were held liable
for payment of the salaries. The local council filed a petition to
appeal before the SC. The petition was rejected.
The SC found
that after the concessionaire stopped providing the healthcare services,
the local council took over these services. It never intended to
continue doing so, but to award the concession to a new concessionaire.
However, the local council was in charge of all the employees until the
healthcare services were awarded to a new concessionaire. It was on
these grounds that the SC found that there had been a transfer of
undertakings and that the local council was therefore jointly and
severally liable for the unpaid salaries.
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3.EMPLOYER’S STANDING TO CHALLENGE TEMPORARY DISABILITY
Judgment of
the Labour Chamber of the Supreme Court dated 30 January 2012
The National
Institute of the Social Security issued an administrative resolution
stating that a temporary disability derived from a professional illness,
and that a mutual insurance company was liable. The employer filed a
claim against this resolution, which was rejected by a labour court
without considering the legal grounds for the employer’s lack of legal
standing. It filed an appeal to the HCJ of Catalonia, which was also
rejected. Finally, the employer filed an appeal to unify doctrine with
the SC.
The appeal
addressed whether or not the employer had standing in social security
proceedings. In accordance with existing case law, the SC reaffirmed
that in such proceedings, the employer has no standing in the legal
relationship. Therefore, the failure to involve the employer in the
process is not considered a breach of its right to due process. A
business interest could justify an employer to join disability
proceedings as a third party intervener (intervención adhesiva),
but it would not imply that it has legal standing to start proceedings.
In contrast, the
SC held that the concept of standing regarding the cause (ad causam)
provides the employer with legal standing in the following cases:
a.) Permanent disability proceedings; when
an employer is seeking a review to a lower disability level, because it
affects its equity.
b.) Proceedings involving work-related
accidents; the absence of the employer could imply the lack of
compulsory joinder of parties, because the employer’s fulfilment of its
social security obligations must be verified.
c.) Proceedings involving the right to
receive benefits for a professional illness; a penalty imposed on a
mutual insurance company implies a penalty for the employer that is
liable for the professional contingency. This could in turn lead to
liability arising in proceedings unrelated to social security matters.
In this case,
the employer could be held liable for the breach of social security
obligations. Therefore, the consequences of the ruling could directly
affect the employer. The failure to join the employer in the proceedings
would injure its right of defence. Consequently, the SC held that the
employer had standing to appeal.
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4.THE ANNUAL MODIFICATION OF THE WORKING HOURS OF RELIGION TEACHERS
IS NOT SUBJECT TO ARTICLE 41 OF THE STATUTE OF WORKERS
Judgment of
the Labour Chamber of the Supreme Court dated 7 March 2012
In this case,
several religion teachers filed a claim against the Department of
Education of Andalusia requesting that the reduction in their working
hours and salary be declared invalid because the specific procedure to
make substantial changes to work conditions had not been followed. Both
the first instance and HCJ found in favour of the teachers and declared
the modification void.
The Department
of Education of Andalusia filed a cassation appeal claiming that the
specific rules and procedure to make substantial changes to work
conditions do not apply to religion teachers.
The SC held that
the employment relations of religion teachers are not only governed by
the SW, but also by other regulations such as the Basic Law on Education.
This Law states that public authorities will set the length of the
working day of religion teachers depending on the needs of each school.
Therefore, the SC upheld the cassation appeal stating that the working
hours of religion teachers can be modified without necessarily having to
follow the procedure set out in article 41 of the SW.
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5.DEATH OF AN EMPLOYEE RETURNING HOME FOLLOWING APPOINTMENT WITH
COMPANY DOCTOR HELD TO BE WORK RELATED ACCIDENT
Judgment of
the Labour Chamber of the Supreme Court dated 8 March 2012
The case
concerned a worker who felt unwell while at work and who subsequently
had an appointment with the company doctor. The doctor advised the
worker to go home. While returning home, the worker suffered from
pulmonary edema, which caused his death.
The key point of
contention was whether the death qualified as a common contingency or a
work accident. At first instance, it was held that the death was a work
accident. However, on appeal the decision of the HCJ of Catalonia
declared that the death was a common contingency and consequently the
pension should be paid to the widow by the National Social Security
Institute rather than the employer’s insurance company.
A cassation
appeal was filed with the SC, which applied article 115.3 of the Social
Security General Law and held that the first symptoms occurred during
normal working hours. In its decision, the SC compared heart conditions
with pulmonary edema, as they are illnesses that do not have a direct
causal link with the workplace, yet may be caused by stress or pressure
at work. Consequently, the SC upheld the cassation appeal and held that
the death was the result of a work accident and that the employer’s
insurance company was therefore liable for the payment of the pension to
the widow.
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6.PROVIDING DETAILED AND ACCREDITED INFORMATION ON THE ECONOMIC
REASONS FOR AN OBJECTIVE DISMISSAL MEANS IT WILL BE CONSIDERED FAIR
Judgment of
the Labour Chamber of the High Court of Justice of Madrid dated 5 March
2012
An employee was
dismissed on economic grounds. The employee filed a claim for unfair
dismissal that was accepted by the labour court. The company appealed
against this ruling.
The company
sought to rely on losses from 2010 that were not specified in the
dismissal letter. As these losses were not set out in the letter, the
accrediting documents were considered inadmissible in court. The HCJ
considered whether the economic reason stated in the dismissal letter
was sufficient basis to accredit a negative economic situation affecting
the company’s viability or its capacity to continue with the same number
of employees.
The HCJ held
that the company had proved the existence of negative economic results
by providing sufficient information about its negative economic
situation. The company gave specific rather than abstract reasons: the
decrease in car sales, its accumulated losses and the imbalance between
its revenues and expenditure. Consequently, the HCJ ruled that the
dismissal was fair.
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7.FAILURE TO SPECIFY LOSSES JUSTIFYING AN OBJECTIVE DISMISSAL FOR
ECONOMIC REASONS IMPLIES AN UNFAIR DISMISSAL
Judgment of
the Labour Chamber of the High Court of Justice of Madrid dated 9 March
2012
The case
involved determining whether or not a dismissal letter set out
sufficient clear and express details of the grounds for the dismissal
for it to be considered fair.
The HCJ analysed
the dismissal letter and determined that it was evident that the company
had been in a continuous negative economic situation since 2009, with
total accrued losses of EUR 76.419.76. However, given that annual losses
were not specified, which would have confirmed fulfilment of the
continuity requirement, the HCJ found that the dismissal letter failed
to provide a detailed description that would allow the worker to develop
a defence strategy.
On the other
hand, the HCJ analysed the content of the dismissal letter in view of
article 51.1 of the SW as modified by Law 35/2010. Article 51.1 defines
a negative economic situation as the existence of actual or future
losses, or a reduction in earning levels for economic reasons, but only
if they affect the company’s ability to continue employing the same
number of workers. The dismissal letter only evidenced losses for 2009,
despite it being delivered to the employee on 22 October 2010. The HCJ
concluded that the dismissal letter failed to indicate the existence of
continued losses affecting the company as defined by Law 35/2010.
The HCJ held the
dismissal to be unfair on the basis that continuous losses as of
November 2010 had not been evidenced and that the termination therefore
lacked the basis and detail required to be considered fair.
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