Order ECC/1762/2012
of 3 August develops article 5 of Royal Decree-Law 2/2012 of 3 February
on the reorganisation of the financial sector. Limits are set on
salaries for managers of credit entities receiving public support for a
reorganisation or restructuring process.
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Order ESS/1726/2012
of 2 August amends Order TAS/718/2008 of 7 March, which regulates the
system of vocational training regarding both the training and public
subsidies available.
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Order ESS/1784/2012
of 2 August grants new powers to the regional directors of the Labour
and Social Security Inspectorate. The Order was published in the
Official Spanish Gazette on 11 August (BOE 11-08-12).
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Royal Decree-Law
23/2012 of 24 August extends Plan Prepara and introduces changes in its
design to increase its effectiveness as a mechanism to help individuals
re-enter the job market and a means to improve protection for those most
in need.
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The National
Court has held that a third party may bring an invalidity action against
a collective bargaining agreement, provided there is an actual legal
dispute and a legally protectable interest.
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The National
Court states that holding individual meetings with employees during the
consultation period with employees’ representatives constitutes fraud of
law.
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1. LIMITS ON SALARIES
FOR MANAGERS OF CREDIT ENTITIES RECEIVING PUBLIC FINANCIAL SUPPORT
Order ECC/1762/2012
of 3 August (the “Order”) develops article 5 of Royal
Decree-Law 2/2012 of 3 February on the reorganisation of the financial
sector in relation to salaries from credit entities receiving public
financial support for a reorganisation or restructuring process
The Order
establishes specific limits on salaries for the directors or managers of
credit entities, distinguishing between those where the Bank
Restructuring Fund (“FROB”
- Fondo de Reestructuración Ordenada Bancaria) holds a majority
shareholding and those that have only received financial support from
the FROB.
Royal Decree-Law
2/2012 of 3 February on the reorganisation of the financial sector
establishes the limits on the fixed salaries of managers or directors.
However, Royal Decree-Law 24/2012 of 31 August on the resolution and
restructuring of credit entities establishes lower caps on the salaries.
In entities where the FROB is the majority shareholder, the managers,
directors or executive officers can receive a maximum of EUR 300,000,
whereas in entities that only received financial support from the FROB,
the maximum is EUR 500,000.
Variable
remuneration is not permitted if the FROB continues to be the majority
shareholder. However, in entities that only received financial support,
variable remuneration is permitted, although it cannot exceed 60% of
fixed remuneration. Its payment will be deferred until three years after
accrual and will depend on the results in the plan requesting financial
support being achieved. Variable remuneration may only amount to 100% of
the fixed remuneration if the engagement of the manager or director took
place after the entity received the financial support and the Bank of
Spain’s prior approval is necessary.
For calculation
purposes, all amounts will be included that are received from entities
belonging to a group where the FROB is the majority shareholder or which
has received financial support; the amounts include allowances and
severance payments. Contributions to pension schemes under the
collective bargaining agreements will be considered fixed remuneration.
The seventh
additional provision of Royal Decree-Law 3/2012 of 10 February on urgent
measures to reform the labour market (“RDL
3/2012”), established limits on severance payments for
managers, prohibiting higher payments in contracts. For these purposes,
the severance payments include all amounts received from the termination
of the contract, regardless of their cause, origin or purpose. The sum
of these amounts may not exceed the limits stipulated in RDL 3/2012.
Furthermore, the
Order sets out a special regime for entities that have participated or
are participating in a merger process; in which case the entities must
submit a list of their directors or managers to the Bank of Spain,
specifying those who would be affected by the restrictions. In addition,
the Ministry of the Economy and Competitiveness may adapt, or make
exempt from the Order, those directors or managers of an entity which
required financial support from the FROB.
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2. Modification of THE
criteria for THE GRANTING OF public subsidies FOR VOCATIONAL TRAINING
Order ESS/1726/2012
of 2 August (the “Order”) amends Order TAS/718/2008 of
7 March, which regulates the system of vocational training regarding the
training available and establishes the rules for granting the public
subsidies. The Order was published in the Official Spanish Gazette of 4
August (BOE 4-08-12)
The main
objective of the Order is to adapt Order TAS/718/2008 to the changes
implemented by Law 3/2012 of 6 July, which introduced urgent measures on
the reform of the labour market, specifically with regard to the system
of vocational training. The legislation also aims to improve the
principles of effectiveness and efficiency.
The most
significant modifications are as follows:
i. Duly
accredited training centres and educational institutions are now
permitted to receive subsidies for vocational courses for those
already employed.
ii. The
definition of priority vocational training has been changed to include
training designed to meet educational needs within the new production
model and also that designed to develop innovative industries, which
will be designated by the administration.
iii. Training
aimed at obtaining professional certificates can now be carried out by
attending classes, doing online courses, or a mixture of both.
iv. The
training programmes must be related to those areas classified as
priority by the Spanish Public Employment Service or by the
corresponding body in the respective autonomous community.
v. The system
of substituting courses for alternative courses has also changed. The
employee may only substitute the chosen course before 25% of the
course is completed. However, with regard to courses for obtaining
professional certificates, the substitution may only take place within
the first 5 days of the course.
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3. New inspection
powers assigned to the Regional Directors of Labour and Social Security
Order ESS/1784/2012
of 2 August grants new powers to the regional directors of the Labour
and Social Security Inspectorate (BOE 11-08-12)
This Order
primarily aims to develop the action plan to combat illegal employment
and social security fraud. Its principal novelty resides in the new
powers of inspection intended so that regional directors of Labour and
Social Security can make improvements in the following fields: (i)
exposing illegal employment, (ii)
combating social security fraud, (iii) ensuring that social
security contributions are effectively carried out, minimizing tax
evasion; and (iv) making sure that any rebates or deductions have
been duly applied.
For the purpose
of achieving these objectives, the regional directors have been granted
new powers related to the organization, execution and monitoring of
operations and those actions which affect individuals, situations or
sectors of activity in the different autonomous communities.
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4. Extension of the
Professional RETRAINING Programme for individuals whose unemployment
BENEFITS have run out
Royal
Decree-Law 23/2012 of 24 August extends the professional retraining
programme for individuals whose unemployment benefits have run out
Royal Decree-Law
23/2012 of 24 August (“RD 2012”),
was published in the Spanish Official Gazette (BOE) on 25
August, and entered into force the day after its publication, becoming
effective as of 16 August. RD 2012 extends the professional retraining
programme for individuals whose unemployment benefits have run out.
The programme,
introduced by Royal Decree-Law 1/2011 (“RD
2011”), has been extended twice already. However, this
new adjustment is aimed at improving its design and more specifically,
correcting deficiencies for the re-entry of individuals to the job
market and giving priority to those in greater need.
In order to join
the programme, applicants must be unemployed due to the cessation of
their employment relationship and registered as job-seekers. A further
requisite is that the applicants’ unemployment benefits run out between
16 August 2012 and 15 February 2013.
i. Moreover,
the applicants must:be registered as job-seekers for at least twelve
out of the last eighteen months; or
ii. have family
responsibilities (article 215.2 of the General Social Security Law).
Furthermore,
applicants must not receive monthly incomes exceeding 75% of the
national minimum wage.
Beneficiaries are
entitled to:
-
an individual and personalised plan to help them re-enter the job
market;
-
actively take part in employment measures aimed at professional
retraining and reintegration;
-
receive financial support amounting to 75% of the monthly public
revenue index (IPREM) for up to
a maximum period of six months. If the individual is the head of a
household with three or more dependants, the financial support will
amount to 85% of the IPREM.
Applicants must apply within two months of their unemployment benefits
running out. During this period, applicants must actively seek
employment for at least thirty days; they will be required to prove this
on submitting their application.
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5. A THIRD PARTY’S
RIGHT to bring an invalidity action against a Collective bargaining
agreement
Judgment of the
National Court dated 13 July 2012
An airline filed a
claim against the signatories of a collective bargaining agreement for
the airport handling services sector (the “Collective
Bargaining Agreement”) in the context of a labour
dispute, and sought to have article 3 of the Collective Bargaining
Agreement declared invalid.
Although the
airline is an Irish company and the employment relationships of the
pilots and crew are governed by Irish law, the company has a
representative office in Spain where only the ground staff work
providing self-handling services.
The defendants
alleged that the airline did not have standing to file a claim as it
fell within the functional scope of the Collective Bargaining Agreement
and therefore could not challenge its legality. In response, the airline
argued that it was a third party. The Court ruled in favour of the
airline, finding that it was entitled to bring an action on the mere
basis of its claim to have a right that had been breached or ignored.
The defendants also
argued that the airline had no claim. The case law of the labour courts
states that to bring this type of action there must be an actual dispute
and the need for legal protection. In this case, the Court considered
both requisites to have been met and again ruled in favour of the
claimant.
Finally, the
airline argued that it did not form part of the employers’ federation
that had signed the Collective Bargaining Agreement, and therefore its
implementation would harm its rights and prevent it from freely
determining the employment conditions of its employees in Spain. The
Court held that the claimant must be included within the scope of
application of the Collective Bargaining Agreement, as although its main
activity is air transportation, the self-handling service is
sufficiently independent.
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6. Holding individual
meetings with employees DURING THE consultation period constitutes FRAUD
OF LAW
Judgment of the
National Court (Labour Chamber) dated 25 July 2012
After an order was
issued for the collective dismissal of employees at three of the company’s
workplaces and the required consultation period had commenced, the
company held individual meetings with some of the affected workers and
reached several agreements. At the same time, meetings were being held
with the employees’ representatives.
The National Court
(the “Court”) therefore
had to decide whether this constituted a fraud of law.
Under both the
Spanish and the European Union legislative framework, the consultation
period is the key element in collective dismissals. Its purpose is to
ensure the necessary information, consultation and participation of the
workers affected by the collective dismissal. The basic aim of the
consultation period is to avoid the termination of employment contracts
or to minimise the number and mitigate the consequences.
Based on the above,
the Court ruled that holding individual negotiations with employees
constitutes a fraud of law, as it completely undermines the purpose of
the consultation period and endangers the power of collective
negotiation.
This remains true
even if the individual employees were the ones to request the
termination of their respective employment contracts.
During the
consultation period, the only legitimate negotiations are those between
the company and the employees’ representatives. Nevertheless, both the
company and individual employees are entitled to hold meetings to reach
an agreement after the consultation period has expired and no agreement
has been reached.
The Court also
ruled on the possibility of limiting the invalidity of the collective
dismissals to the workplace where irregularities occurred, thereby
recognising the agreements reached in the remaining two workplaces. The
Court nevertheless rejected this approach as there is no current
regulation within the legislative framework that allows for the
separation of the negotiation procedure among multiple workplaces.
The collective
dismissal procedure must be applied equally to all employees affected by
the company’s decision to terminate its activity.
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