The European
Court of Justice held that Directive 2003/88/EC concerning certain
aspects of the organisation of working time applies to civil servants.
As a consequence, a civil servant or an employee will be entitled to
economic compensation in lieu of the annual leave not taken due to
temporary incapacity.
When a company
has an obligation to pay a supplement for temporary incapacity it must
do so throughout the entire period of incapacity, even if the employee’s
employment contract terminates beforehand. In terms of the labour
relationship itself, it needs only be shown that it existed on the date
the event causing the temporary incapacity occurred. Thus, even if the
relationship subsequently terminates, there is still an obligation to
pay the supplement.
The Supreme
Court held that the scope of a claim could be broadened to include a
third party who was the real employer and not initially included in the
claim if this was discovered during an attempt to reach a settlement.
The employer’s
communication failed to explain the reasons for the objective dismissal
adequately and thus prevented the employee from knowing the reasons for
her dismissal. This limited her fundamental right to defence during the
trial.
The High Court
of Justice of Catalonia declared a collective dismissal to be null,
concluding that the company which dismissed the employees was not the
real employer, but merely a single part of the real employer. The group
of companies, as the real employer, was the only entity entitled to
carry out the collective dismissals.
The High Court of
Justice of Madrid held that an employee had been unfairly dismissed
due to the unilateral withdrawal from the senior executive contract
binding both parties. Furthermore, it concluded that the employee was
entitled to receive the salary accrued between the date of the
dismissal until the company received notification of the court
resolution, in addition to unemployment benefits, given that the two
are compatible.
The failure to
file documentation that evidences the financial situation of a company
and to justify the grounds alleged in an explanatory memorandum for a
collective dismissal will render it void due to an infringement of
Royal Decree 801/2011 and articles 51 and 53 of the Statute of Workers.
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1.
APPLICATION OF THE WORKING TIME DIRECTIVE TO CIVIL SERVANTS:
ENTITLEMENT TO A PAYMENT IN LIEU OF ANNUAL LEAVE NOT TAKEN
Judgment
of the European Court of Justice dated 3 May 2012
The claimant
was a fireman in Germany and held the employment status of civil
servant. He became unfit to work two years prior to his retirement and
was therefore unable to take his paid annual leave (four weeks) as
established in Article 7 of Directive 2003/88/EC of the European
Parliament and of the Council of 4 November 2003 (the “Directive”).
Consequently, the claimant requested that the City of Frankfurt pay
him an allowance in lieu of the annual leave which could not be taken
due to his temporary incapacity. As his request was rejected, a claim
was filed with the Contentious-Administrative Court of Frankfurt am
Main which referred a number of questions to the European Court of
Justice (“ECJ”).
The ECJ held
that the activity carried out by civil servants fell within the scope
of application of the Directive, given that the word “worker” was not
to be interpreted restrictively. Furthermore, the ECJ stated that once
the employment relationship had terminated, paid annual leave could
not be taken. The Directive therefore stipulates that compensation
must be paid to avoid employees being deprived of the right to take
their accrued annual leave. As a consequence, the ECJ stated that the
claimant was entitled to receive payment in lieu of the annual leave
not taken, even though he could not work due to his temporary
incapacity.
However, the
ECJ stated that the Directive does not preclude provisions of national
law conferring on an employee an entitlement to further paid leave in
addition to the entitlement to a minimum paid annual leave of four
weeks. National law does not have to provide for a payment in lieu if
an employee who is retiring is unable to use the additional
entitlement as a temporary incapacity prevented the civil servant from
working.
Lastly, the
ECJ stated that the provisions of national law that restrict, by a
carry-over period, on the expiry of which the entitlement to paid
annual leave lapses, the right of a civil servant to cumulate the
payments in lieu of annual leave not taken due to a temporary
incapacity, must take into account the specific circumstances of each
worker.
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2.
SUPPLEMENT FOR TEMPORARY INCAPACITY MUST BE PAID THROUGHOUT THE ENTIRE
PERIOD OF INCAPACITY EVEN IF THE EMPLOYMENT CONTRACT TERMINATES
BEFOREHAND
Judgment
of the Labour Chamber of the Supreme Court dated 22 November 2011
The applicable
collective bargaining agreement in this case established an obligation
on the employer to pay a supplement for temporary incapacity of up to
100% of the employee’s social security contribution base if the
temporary incapacity was caused by a work-related accident. The ruling
under appeal held that the supplement for temporary incapacity
regulated in the collective agreement “was linked to the labour
relationship” and an express agreement between the employer and
employee was necessary to extend this obligation for a period
exceeding the employment contract. The matter at issue was whether the
company had to pay the supplement for temporary incapacity during the
entire period of the temporary incapacity or only up to the
termination of the employment contract.
The Supreme
Court overruled the criteria applied by the High Court of Justice of
Andalusia on the following grounds:
a.) Measures
contained in collective bargaining agreements or company agreements
that improve social security benefits are regulated by those
agreements or the laws pursuant to which they are passed.
b.) Such
measures cannot be interpreted broadly so as to include situations not
specifically foreseen by the parties. However, collectively-agreed
rights must not be interpreted restrictively.
c.) According
to article 1,282 of the Spanish Civil Code, the literal terms of the
instrument creating the right must be adhered to.
The Supreme
Court held that if this right was granted due to a temporary
incapacity and it arose “from the first day of sick leave”,
without excluding any subsequent period, it could not be reduced or
revoked unless this is carried out pursuant to the rules granting the
right. The relevant fact was that the labour relationship existed on
the date the event causing the temporary incapacity occurred; its
subsequent termination was irrelevant in establishing the supplement
for temporary incapacity.
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3. THE
EMERGENCE OF THE REAL EMPLOYER GRANTS THE RIGHT TO BROADEN THE SCOPE
OF THE CLAIM
Judgment
of the Labour Chamber of the Supreme Court dated 6 March 2012
The employee
initially filed a claim against the temporary employment agency she
entered into her last employment contract with, and which had
terminated her contract. The employee also issued the claim against
other temporary employment agencies she had previously been employed
by in order for her contract to be declared permanent and therefore,
for her dismissal to be declared unfair. At the request of one of the
co-respondent companies, the claim was broadened to include the user
undertaking. As the twenty working days in which to file a claim for
dismissal had expired, the grounds of the initial claim were
substantially modified.
The case
rested on the legality of broadening the scope of the claim more than
twenty working days after the dismissal. The Labour Chamber held that
if the parties’ allegations led to the conclusion that the real
employer was a third party not initially included in the claim, the
twenty-day term for an unfair dismissal claim would not apply. The
rationale behind this is that even though the claimant was employed in
the workplace of the new respondent, there was nothing to suggest that
the claimant was aware of the legal connection between the respondents
on the date of the dismissal.
One of the
judges expressed a dissenting opinion on the grounds that the mistake
in this case was a mistake of law and not a mistake of fact. This
error was deemed inexcusable as it would lead to judges upholding the
prescription of actions against the user undertaking.
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4.
FAILURE TO PROVIDE SUFFICIENT INFORMATION COMMUNICATING A DISMISSAL
FOR OBJECTIVE CAUSES MAKES DISMISSAL UNFAIR
Judgment
of the High Court of Justice of Castilla y León in Valladolid dated 9
November 2011
This judgment
analysed whether or not a dismissal letter complied with the formal
requirements stipulated in article 53.1(a) of the Statute of Workers,
which establishes the obligation for the employer to specify the
reasons leading to the objective dismissal.
The Court held
that the information contained in the dismissal letter was
insufficient and constituted an infringement of the right to defence.
In addition, the Court determined that the dismissal letter should
contain such pertinent data as: the service contract with a third
party, the termination of which led to the claimant’s dismissal, the
previous and current turnover or the reorganisation of the company.
The Court held that the purpose of the dismissal letter is to allow
the employee to have detailed knowledge of the reasons for the
redundancy in order for the employee to be in possession of the
necessary information to prepare a defence.
Furthermore,
the Court held that the company failed to provide clear information as
to the causes for the dismissal, even after the judgment. Lower
production and reorganisation were not evidenced. Consequently, the
Court upheld the first instance ruling declaring the dismissal to be
unfair.
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5.
NULLITY OF COLLECTIVE DISMISSAL FOR OBJECTIVE CAUSES
Judgment
of the High Court of Justice of Catalonia dated 23 May 2012
The High Court
of Justice of Catalonia ruled on a collective dismissal, first
determining whether there was a group of companies. The Court stated
that a group of companies exists when several requirements are met
that imply the essential element of a unified management over the
entire group. Specifically, the Labour Chamber stated that there must
be: (i) working places which operate as a unit; (ii) a common
rendering of services, either simultaneously or successively, among
multiple companies of the group; (iii) several companies with no real
business activity; and (iv) a commingling of assets, an external
unified business appearance and unified management. The Court found
these requirements to be met in the case: unitary management by the
three shareholders and the companies all working under a single
management in the same workplace with no distinction between the
activities carried out.
The Court
declared the existence of a group of companies and held that, in
accordance with article 124.9 of the Law Regulating the Labour Courts,
the dismissal was an abuse of law. The real employer, which was the
group of companies, fraudulently concealed its nature as a group by
carrying out the dismissal through a company forming part of the group,
but which was not in fact the real employer.
The Court also
stated that the documentation provided to the employee representatives
under article 51.2 of the Statute of Workers was insufficient. The
information failed to reveal the true circumstances of the group of
companies as well as the professional categories of the employees
dismissed.
Failure to
provide these details prevented the employee representatives from
carrying out effective negotiations and adopting labour measures,
given that they were unaware of both the professional categories of
the individuals affected by the collective dismissal and their
criteria. As such, it was impossible to adopt any measures to prevent
or mitigate the consequences of the collective dismissal.
Furthermore,
at the end of the consultation period, the company only notified 8 out
of the potential 20 employees affected by the collective dismissal.
This left the employees and their representatives unaware of the
remaining 12 to be affected. Based on all the above, the Court held
the collective dismissal to be null.
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6.
COMPATIBILITY BETWEEN THE SALARY ACCRUED DURING LEGAL PROCEEDINGS AND
UNEMPLOYMENT BENEFITS
Judgment
of the High Court of Justice of Madrid dated 15 December 2011
One of the
main issues in this ruling was whether the claimant’s ordinary
employment relationship was suspended when the senior executive
relationship began. The judgment considers the effects of the
termination of the senior executive contract in relation to the
employer’s withdrawal from the ordinary employment relationship. The
High Court of Justice of Madrid analysed article 9.3 of Royal Decree
1382/1985 (“RD”) of 1 August on senior executive
contracts. Article 9.3 in conjunction with article 11 of the RD states
that an employee has the right to resume his ordinary employment
relationship after the termination of his senior executive
relationship; and article 11 regulates the termination of the senior
executive relationship due to the employer’s withdrawal from the same.
The Court considered that the termination of the senior executive
contract due to the employer’s withdrawal from the contract, without
the employer making any reference to the ordinary employment
relationship, and removing the employee from the Social Security
registration list, evidenced the employer’s intention to terminate the
relationship, and therefore constituted an unfair dismissal.
The ruling
also considered whether the employee was allowed to receive the total
salary accrued during the legal proceedings even if he had received
unemployment benefits after the termination of the employment
relationship.
The Court held
that the unemployment benefits the employee may have received were not
deductible from the salary accrued during the proceedings, since the
employee was entitled to receive the latter from the date of the
dismissal until the notification of the ruling to the company, and
furthermore, that it was after the ruling when the employee would
begin to receive the unemployment benefits. However, the Labour
Chamber held that by means of a managing entity the company had to
deposit the unemployment benefits received by the employee from the
date of dismissal until the notification of the ruling, and that the
company would assume this obligation in accordance with article 209.5
b) of the General Social Security Law.
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7.
OBJECTIVE DISMISSAL NULL FOR FAILURE TO OBSERVE FORMAL REQUIREMENTS
Judgment
of the High Court of Justice of Madrid dated 30 May 2012
In this case
the main point at issue was whether the formal requirements to be
observed in a collective dismissal had been met by a group of
companies. The court held that the dismissal must be declared void as
several infringements had been committed.
In particular,
in the explanatory memorandum of the reasons that justified the
dismissal, the company briefly explained its history and simply stated
that there had been a fall in turnover because “there is no work,
neither much nor little”. The memorandum was very general and
contained no figures or economic forecasts. In addition, the annual
accounts for the most recent financial years, the profit and loss
accounts, statements of cash flows and management reports were not
filed.
The court held
that the company had not fulfilled the requirements established in the
collective dismissal procedure because the explanatory memorandum was
clearly deficient and several documents that were required by law had
not been filed. Accordingly, the court held the dismissal null.
Finally, as there was a group of companies, the court found them to be
jointly liable.
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