1. NEW REGULATION ON REDUNDANCIES, SUSPENSION OF EMPLOYMENT AND THE
REDUCTION OF WORKING TIME (BOE 30-10-2012)
Royal Decree 1483/2012 of 29 October approving the regulation of
collective redundancies procedures and suspension of contracts and
reduction of working time
Royal Decree 1483/2012 of 29 October, approves the regulation on
collective redundancies procedures and the suspension of contracts and
reduction of working time (the “Regulation”), pursuant to the
obligation imposed by disposition nineteen, paragraph 2, of Law 3/2012
of July 6, from Royal Decree 3/2012 of 10 February. The Regulation
implements the aforementioned legal provisions and regulates the
negotiations between the employer and workers of the proposed labour
measures including, in particular, the consultation period, the
information to be provided to employee representatives and the labour
authorities, and outplacement plans and social support measures that
employers must adopt.
The procedures for collective redundancies commence with the start of
the consultation period, which must be notified in writing by the
employer to the employee representatives. The written document must
specify: the grounds for the collective redundancy; the number and
professional category of the affected employees, disaggregated by
autonomous region if the proposals affect more than one workplace; the
expected timetable of redundancies and details on the actions taken;
together with the criteria used for designating which workers would be
made redundant. The notification must be accompanied by a memorandum
explaining the economic, technical, organisational or productive grounds
that led the company to take those actions.
If economic grounds are claimed, the Regulation specifies that the
memorandum must certify the accounts of the company that evidence the
negative economic situation. The company must provide the financial
statements from the last two full financial years, including the balance
sheet, profit and loss account, statement of changes in equity,
statement of cash flow, notes to the accounts and management report, or
if appropriate, a brief profit and loss account, balance sheet and
abridged statement of changes in equity. These documents must be audited
by accredited auditors. Provisional accounts must be prepared at the
beginning of the procedure and signed by the company’s managers or
representatives. For companies that are not subject to the audit
requirement, the company's representative must provide a statement on
the exemption from the requirement.
When the negative economic situation which is the basis for the
collective redundancy consists of forecast losses, in addition to
providing the abovementioned documentation, the employer must detail the
criteria applied to calculate the forecast. Similarly, a technical
report on the amount and the permanent or temporary nature of the
forecasted loss must be submitted based on data from the annual accounts
of the data from the company’s industry sector, developments and the
company’s position in that market or any other data that confirms the
forecast. However, if the company claims an ongoing negative economic
situation resulting for a decrease in the level of income or sales, in
addition to the above, the employer must submit the tax or accounting
documentation evidencing that this was the case during, at least, the
three consecutive quarters immediately preceding the date of the notice
of commencement of the collective redundancy procedure. The company must
also submit tax or accounting documentation for the same period in the
previous year or sales revenue recorded over that same period.
If the company initiating a collective redundancy forms part of a
group of companies that is required to prepare consolidated accounts,
the company must submit the audited annual accounts and consolidated
report of the group’s parent company for the aforementioned period (for
companies that are required to perform audits), provided that the
company has inter-group debit or credit balances. If there is no
obligation to prepare consolidated accounts, in addition to the
company's financial documents initiating the procedure referenced above,
the audited accounts of the other group companies must be submitted, if
applicable, provided that such companies have their registered office in
Spain, carry out the same activity or operate in the same sector and
have debit or credit balances with the company that initiated the
procedure.
If the procedure was initiated for technical, organisational or
productive grounds, the memorandum submitted by the employer must
indicate the reasons justifying the redundancy pursuant to article 51 of
the Statute of Workers (the "SW").
In addition, if the collective redundancy affects more than fifty
employees, the company must attach the outplacement plan for the
affected workers to the memorandum, which may be agreed and expanded
during the consultation period. The plan must ensure that the redundant
workers (paying specific attention to elderly workers) are provided with
a continuum of care for a minimum period of six months, including
intermediation activities, orientation and training, and personalised
attention to provide advice for workers on all aspects of outplacement,
particularly regarding active job searching. The Regulation includes
specific accompanying measures and establishes the conditions of the
outplacement plan.
A copy of the abovementioned documents must be submitted to the
labour authorities. Moreover, the employer must send information
regarding the composition of the employee representatives groups and on
the negotiating committee for the collective redundancy procedure. The
information must also specify if more than one workplace will be
affected and, if applicable, whether the negotiation is to be carried
out on a company-wide basis or decentralised in different workplaces. In
turn, the labour authorities must submit the relevant documentation to
the entity in charge of unemployment benefits, the Labour and Social
Security and the Social Security Administration, if applicable. While
the labour authorities may decide that communication requirements do not
apply in a specific case, a notification does not imply an interruption
of the procedure. In any case, during the consultation period, the
labour authorities may provide consultation services or act as a
mediator.
During the consultation period, the minimum topics for discussion
include the possibility of avoiding, reducing, and mitigating the
consequences of redundancies. The parties will set a schedule of
meetings. Minutes for each meeting must be prepared and signed by the
attendees. The Regulation also specifies that the parties may agree to
different terms. It also designates the competent labour authorities in
the autonomous regions and the general administration and establishes
the criteria for who may participate as a delegate in the consultation,
the appointment of the commission and the applicable conditions.
At the end of the consultation period, the company must notify the
result reached by the parties to the corresponding labour authorities,
including the corresponding documentation accompanying the social
measures that were agreed or offered by the company. Where applicable,
the company must submit the outplacement plan, as well as the minutes of
the meetings of the consultation period signed by all attendees.
Following the disclosure of the company’s decision, the employer must
notify each affected employee individually at least 30 days from the
date of the notification of the commencement of the consultation period
to the labour authorities and the effective date of the redundancies.
The failure to carry out the notification in a timely manner will cause
the expiration of the procedure; however, a new procedure may be
initiated.
The suspension of employment and the reduction of working time
procedures are regulated under the same terms as collective
redundancies, excluding specific documents related to the confirmation
of economic grounds, and the terms of the consultation period.
Title II of the Regulation governs the legal framework and procedures
involving suspensions of employment and reductions of working time
procedures due to force majeure. The labour authorities must
provide prior verification of the force majeure event. Theprior
verification constitutes an administrative procedure in order to obtain
a response from the labour authorities, which can be challenged through
the designated procedures.
Finally, it is important to take into consideration that Title III of
the Regulation establishes specific procedures for collective
redundancies in the public sector, depending on whether or not the
entity is considered to form part of the public administration. Entities
that form part of the public sector but which are not designated as
forming part of the public administration are subject to the general
rules for private companies, with some minor differences. However,
entities considered as part of the public administration are subject to
specific rules of procedure regarding the qualification of the basis for
redundancies in the public administration, pursuant to the Twentieth
Additional Provision of the SW.
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2. ROYAL DECREE ON FINANCIAL CONTRIBUTIONS FOR COLLECTIVE
REDUNDANCIES AFFECTING WORKERS AGED 50 OR OLDER (BOE 30/10/2012)
Royal Decree 1484/2012 of October 29 on the financial
contributions to be made by profitable companies that carry out
collective redundancies affecting workers aged fifty or older
The Sixteenth Additional Provision of Law 27/2011 of 1 August on the
updating, adaptation and modernisation of the Social Security System was
amended by Decree Law 3/2012 of 10 February and, subsequently, by Law
3/2012 of 6 July on urgent measures to reform the labour market.
Following prior consultation with trade unions, business associations
and the autonomous regions, the government has enacted Royal Decree
1484/2012 of 29 October on the financial contributions to be made by
profitable companies that carry out collective redundancies affecting
workers aged 50 or older (the "RD 1484/2012").
The obligation to make a financial contribution to the Treasury is
limited to companies carrying out redundancies in accordance with
article 51 of the Statute of Workers (“SW”) and which affects
workers aged 50 or older. Furthermore, the redundancies must be carried
out by companies with more than 100 workers or companies that form
part of a group of companies employing at least a 100 employees.
Moreover, in order to be applicable, RD 1484/2012 stipulates that even
if there are economic, technical, organisational or productive grounds
to carry out the collective redundancy, the company (or group of
companies) must have been profitable in the two fiscal years preceding
the year in which it initiates the procedure for collective
redundancies.
The provisions of RD 1484/2012 will apply to workers aged 50 or older
at the date of the termination. RD 1484/2012 is also applied when a
company executes temporary employment regulation measures, as provided
in article 47 of the SW, which affect workers aged 50 or older.
The financial contribution is made annually and pursuant to the
application of a specific percentage. The percentage and the items
applicable are defined by law: labour benefits and unemployment benefits
and social security contributions for workers meeting age requirements,
affected by redundancies, in accordance with following table:
The percentage used for calculating the financial contribution must
be determined in accordance with the following rules:
| % of employees aged 50 or older |
|
Number of employees |
| More than 2,000 |
Between 1,000 and 2,000 |
Between 501 and 999 |
| More than 35% |
More than 10%
Less than 10% |
100%
95% |
95%
90% |
90%
85% |
| Between 15% and 25% |
More than 10%
Less than 10% |
95%
90% |
90%
85% |
85%
80% |
| Less than 15% |
More than 10%
Less than 10% |
75%
70% |
70%
65% |
65%
60% |
The percentage of workers affected by the collective redundancy who
are aged 50 or older as compared to the total number of dismissed
workers affected by the redundancy is calculated annually, within the
period provided for carrying out terminations, in accordance with the
communication filed by the company with the labour authorities following
the consultation period, taking into account the total number of both
groups that have been the subject of collective redundancy, up until the
year in which the calculation is made.
The benefits to the company or group of companies will be quantified
by the average percentage of income for each year over the income from
ongoing transactions and discontinued transactions used to quantify
these results, referring to the two fiscal years immediately preceding
the day on which the employer notifies the labour authorities of the
start of the consultation period, which must precede the collective
redundancy.
The number of employees of the company or group of companies will be
quantified based upon the employees rendering services at the time of
the notification to the labour authorities, regardless of whether they
are working full time or part time.
The provisional settlement of the liquidation of the annual
contribution can be challenged claim by the company before the Public
Employment Service. That decision may be appealed by the company before
the Ministry of Employment and Social Security.
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3. TRANSFERS OF UNDERTAKINGS REQUIRE THE TRANSFER OF ALL ASSETS
NECESSARY TO CONTINUE THE BUSINESS ACTIVITY
Judgment of the Labour Chamber of the Supreme Court dated 26
September 2012
In this appeal for the unification of doctrine, the Supreme Court (“SC”)
reversed the decision of the High Court of Justice of Andalusia, which
had declared the collective dismissals of a hotel null. In its decision,
the High Court of Justice included a financial institution within the
scope of the ruling on the basis that it considered that a transfer of
undertakings had taken place. The appealed decision ordered the bank to
reinstate all the employees of the hotel complex, as the property in
which the resort was located was awarded to the bank in mortgage
foreclosure proceedings.
The SC held that the transfer of undertaking established under
article 44 of the Statute of Workers requires the substitution of one
employer for another in the same business, and the transfer by any means
of assets necessary to continue the business. In the case at hand, the
bank acquired the mortgaged property of the hotel at a public auction.
However, the bank did not acquire the movable assets necessary to carry
out the business, which were awarded to a third party. In this regard,
the SC considered that there had not been a transfer that enabled the
continuation of the business activity.
The ruling concluded that "not transferring the other assets that
are essential for the continuation and survival of the hotel business,
such as the machinery, equipment and movable property in general, that
had been auctioned and awarded mostly to a third party, and which at no
point belonged to the bank, implies that it cannot be considered a
transfer of undertaking. Moreover, there is no national or Community
regulation that establishes the obligation of an awardee of a property
at mortgage foreclosure proceedings to replace each of the elements at
its expense, including gas supply, electricity, etc., regardless of
whether the property, due to its structure and architectural equipment,
is specifically intended for the hotel industry". Therefore, the SC
overturned the decision and ruled in favour of the bank, upholding the
decision against the hotel.
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4. COLLECTIVE DISMISSAL DEEMED VOID DUE TO BREACH OF FUNDAMENTAL
RIGHTS
Judgment of the High Court of Justice of the Basque Country
(Labour Chamber) dated 9 October 2012
The High Court of Justice of the Basque Country (the “Court”)
declared the collective dismissal of 358 workers void due to a violation
of the fundamental rights of freedom of association and to strike.
In April 2012, in addition to other measures, the company carried out
a collective dismissal affecting 91 workers. The workers called an
indefinite strike. The company withdrew the initial collective dismissal
proceedings and informed the employee representatives about the start of
a consultation period for the lockout of two of the company’s factories.
These events occurred without the company’s financial situation
undergoing any changes (or worsening) between each collective dismissal
procedure. According to the Court, the company’s decision to lockout two
of its factories was in retaliation of the strike called by the workers
the previous day.
The Court stated that there was no objective reason for the company’s
redundancies based on economic grounds. The company did not evidence
that the situation was sufficiently serious to shut down two factories.
Therefore, the Court concluded that the analysed measure constituted a
“clear attempt to breach the fundamental right to strike and was a
response to or retaliation against the exercise of that fundamental
right, or a means of pressuring to negotiate the measures that had been
rejected (...)". In addition, there was no variation between the date of
the first collective dismissal procedure in April and the second one,
which started in May, after the strike.
The Court held that the fact that the redundancy severely affected
those employees who had supported the strike, was also evidence of the
violation of the fundamental right to strike. Out of the 178 dismissals,
97 affected union members.
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5. REDUNDANCY OF A GROUP OF EMPLOYEES OF A LOCAL COUNCIL
Judgment of the High Court of Justice of Andalusia dated 25
October 2012
In this case, the High Court of Justice of Andalusia (the “Court”)
held that a collective redundancy in a local council was lawful.
The redundancies were challenged on the ground that the mayor had
taken the decision as opposed to the full council. The Court held that
law does not require that such a decision be taken by the full council
since it exclusively affected the workforce. The fact that a councillor
informed certain employees who were to be made redundant before
notifying others did not breach the right to freedom of association or
vitiate the proceedings.
The Court also held that the economic and organisational grounds for
the collective redundancy had been justified. Specifically, it found
that there were sufficient economic grounds for the redundancies since
the council had suffered a budget shortfall for three consecutive
quarters, had had been forced to apply for extraordinary funding under
the government’s “supplier payment programme”, and had failed to make
payments owed to the Social Security General Treasury, which in turn
prompted the government to withhold the council’s share of taxes
collected by the government. The Court also held that there were
organisational grounds for the redundancies as it had been shown that
the council was overstaffed.
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1.
NEW REGULATION ON REDUNDANCIES, SUSPENSION OF EMPLOYMENT AND THE
REDUCTION OF WORKING TIME (BOE 30-10-2012)