A. Composition and formation of the negotiating body
B. Specific modifications to collective dismissals
C. Judicial challenges
Royal Decree-Law 11/2013 of 2 August on the protection of part-time employees and other urgent measures in the economic and social order (“RDL 11/2013”) was published on 3 August 2013. RDL 11/2013 modifies a wide range of matters and regulates several issues on infrastructures and transport, as well as issues related to the company for the management of assets arising from bank restructuring (Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria or Sareb), and several novelties on labour and social security matters, which are summarised in this newsletter.
RDL 11/2013 contains: (i) several modifications in connection with the protection of part-time workers (in particular, the contribution periods required to be entitled to social security benefits); (ii) reforms focused on giving greater legal certainty to the recipients of unemployment benefits (RDL 11/2013 regulates benefit suspension and modifies the regime for infractions and sanctions under new obligations); and (iii) several issues on labour matters. RDL 11/2013 regulates several issues on the composition of the negotiation body and the individuals entitled to negotiate in a procedure involving collective measures –geographical mobility, substantial modification of working conditions, temporary suspension of employment contracts or reduction of working timetable, collective dismissal and non-application of the working conditions regulated in collective bargaining agreements; and, finally, the procedural rules limit the cases in which collective dismissals are void and allow the direct enforceability rulings declaring a collective dismissal void.
2. Protection of PART-TIME WORKERS
Chapter II of RDL 11/2013 (article 5) regulates the contribution period for part-time workers to qualify for social security benefits. According to the statement of intent of RDL 61/2013, this modification is the result of a Constitutional Court judgment dated 14 March [click here for our Newsletter on this judgment], which declared unconstitutional the criteria in the General Social Security Law ("GSSL") to calculate the contribution period for part-time workers to qualify for social security benefits.
The new regulations establish that the periods for which the worker has been registered for social security purposes under a part-time contract will be taken into account, to relax the number of years required to qualify for benefits and satisfy the principle of equality among part-time and full-time workers.
- The “part-time multiplier” is calculated by the percentage that the days worked by a part-time worker correspond to those worked by a comparable full-time worker. This multiplier will be applied to the period the worker is registered under a part-time contract. The result of applying this multiplier will be the number of days for which contributions are deemed to have been made for each period. The number of full-time days worked will be added to the part-time calculation, resulting in the total number of days for which contributions are made.
- The “overall multiplier” is the number of days worked for which contributions have been made divided by the total number of days for which the worker has been registered for social security purposes during his/her whole working life. The multiplier will then be applied to the ordinary regulated period to determine the required minimum contribution period.
- For retirement benefits and permanent disability benefits derived from non-work related diseases, the number of days for which contributions have been made (see (i)) will be increased by applying a multiplier of 1.5 (although the resulting number of days may not exceed the period during which the worker was registered under a part-time contract).
- RDL 11/2013 also establishes the percentage to be applied to the contribution. This percentage will be determined according to the general rule (article 163 and transitory provision 21 of the GSSL), unless the individual’s contribution period is less than 15 years
(including both full and part-time periods adjusted by the 1.5
3. employment and unemployment protection
RDL 11/2013 introduces several provisions designed to increase legal certainty to recipients of unemployment benefits, including the following:
- Jobseekers must be registered with the State Employment Service to be entitled to the benefit (previously, registration was only necessary to apply for the benefit, not to be entitled to it). Therefore, beneficiaries must be registered as jobseekers throughout the period of the benefit. Otherwise, the benefits will cease to be paid until the beneficiary is registered as a jobseeker).
- The beneficiary’s right to the benefit will stop when he/she stays abroad for up to 90 days, relocates abroad for a period of less than 12 months to look for job or to work, to receive professional training or for international cooperation. Changes of residence for any other purpose must not exceed 90 days per year or the right to the benefit will be lost. Changes of residence must be notified and previously authorised by the relevant authorities.
- Stays abroad for less than 15 calendar days in a single year will not be considered long stays and thus will have no bearing on the beneficiary status.
Amendments have also been made to the Labour and Social Security Infringements Law, adapting the framework for sanctions to the jobseeker registration requirement to qualify for the benefit. RDL 11/2013 also establishes that notices and communications sent by electronic means will be considered valid. Finally, failure to notify the relevant employment authorities of collective dismissal measures, contract suspensions or working timetable reductions is classified as a serious offence.
4. labour aspects
Chapter IV of RDL 11/2013 (articles 9 to 11) amends the collective procedures on geographical mobility (article 40 of the Statute of Workers, the “SW”), substantial modifications of working conditions (article 41 of the SW), suspensions of contracts or timetable reductions based on economic, technical, organisational or productive grounds (article 47 SW), and non-application of the working conditions contained in the collective bargaining agreements (article 82.3 of the SW). Similarly, article 64 of Spain’s Insolvency Law, establishing the corresponding procedures for insolvent companies has been modified (reference is made to article 41 of the SW, relating to standing and prescription periods). Chapter IV modifies Law 36/2010 of 10 October of the labour jurisdiction (“Law 36/2010”) with regard to the judicial challenge of such procedures.
A. Composition and formation of the negotiating body
The amendments to the abovementioned procedures (articles 40, 41, 47, 51 and 82.3 of the SW and other articles of Royal Decree 1483/2013 of 29 October on collective dismissals, contract suspensions and timetable reductions (“RDL 1483/2012”) relate to the composition and formation of the negotiating body. The rules on the composition of the negotiating body following the amendment to RDL 11/2013 can be summarised as follows:
- The consultation period will be carried out with a sole negotiating body, removing the possibility of negotiations taking place in specific workplaces. However, if a company has multiple workplaces, the negotiating body will only represent the workplaces in which the collective measures are to apply. The negotiating body will be composed of no more than 13 members (if there are more than 13 representatives, they will select the representatives of the negotiating body amongst themselves in proportion to the total number of employees being represented).
Participation in negotiations may be delegated to the trade unions, if they hold a majority representation (in the works council or among the employee representatives of the affected workplaces). Otherwise, the representatives will be determined according to the following rules:
- If the collective measure affects a single workplace, representation will correspond to the works council or to the employee representatives. If neither exist, representation may be delegated to: (i) a council of a maximum of three members (”ad-hoc representatives”); or (ii) a council which members will be appointed, according to the workers they represent, by the largest trade unions and the largest unions in the company’s industry.
- If the procedure affects more than one workplace, representation will correspond to the joint works council if representation is based on a collective bargaining agreement. Otherwise, representation will be assigned based on the following rules: (i) the council will be composed of the employee representatives if there are representatives in any workplace; (ii) if there are no employee representatives in the affected workplaces, the council will be composed of the employee representatives of the workplaces that do have them, except if the workers in the workplace in which there are no employee representatives opt to appoint the council directly, in which case the council will be composed of employee representatives and ad-hoc representatives); (iii) if no workplaces have employee representatives, the procedures indicated in section 1 will apply and, once all ad-hoc representatives have been appointed, those representatives will make up the negotiating body.
- The negotiating body must be created prior to the start of the consultation period, which must be notified by the company. The company must communicate its intention to initiate a consultation period. The negotiating body must be created within seven days of receipt of the notification (except if at least one workplace does not have any employee representatives, in which case the term is 15 days). This modification is particularly important because it implies that the company must provide prior notice of its intention to initiate any of the mentioned collective procedures.
- Once the above terms have elapsed, the company may communicate the start of the consultation period to the employee representatives and the labour authority. Failure to create the representative council will not prevent the start of the consultation period and the late creation of the same will not extend the duration of the consultation period.
B. Specific modifications to collective dismissals
The content of the communication to the labour authority has increased based on the new requirements regarding the creation of the negotiating body detailed in the preceding section. In particular, the following information must be sent to the employee representatives and the labour authority:
- A copy of the company’s communication to the workers or their representatives stating the intention to initiate the procedure;
- Identification of the employee representatives who will make up the negotiating body or, as the case may be, a reference to the non-creation of the negotiating body within the established periods of time.
RDL 1483/2012 is also amended to specify the cases when, as a result of the creation of a group of companies, annual statements and the consolidated annual report must be submitted. As such, the communication will be limited to cases in which the parent company is domiciled in Spain. As a result of this modification, it appears settled that multinational groups of companies which parent company is abroad are not required, in principle, to attach their consolidated annual accounts.
Conversely, article 51 of the SW (previously only established in RDL 1483/2012) also establishes the timeframe for the procedure, which will end when 15 days have elapsed between the day of the last meeting held during the consultation period and the employer’s communication of its decision regarding the collective dismissal.
C. Judicial challenges
Procedural amendments focus primarily on several subsections of article 124 of Law 36/2010 (collective dismissals) and article 247 of Law 36/2010 (enforcement of collective measures).
The new wording of article 124 of Law 36/2010 includes the term “only”, thus the invalidity declaration is limited to cases in which the employer has not complied with the consultation period or delivered the documents listed in article 51.2 of the SW, or has not followed the procedure established in article 51.7 of the SW (collective dismissal based on force majeure), or has not obtained judicial authorisation from the insolvency receiver, or fundamental rights and civil liberties have been infringed.
Conversely, the new provisions establish that, when an employer files a claim seeking a judgment declaring that its decision is lawful (autodemanda), that fact will toll the prescription period of the individual action.
RDL 11/2013 also contains other rules regarding the prescription of individual claims. The period to file a claim will start when the 20-day term given to the employee representatives to file a claim expires, if the latter have not filed a claim. If the employee representatives have filed a collective claim, the period to file individual claims will start when a final decision on the collective action is issued.
RDL 11/2013 also clarifies the res iudicata effect of collective proceedings on individual proceedings, establishing that the object of individual proceedings is limited to individual issues not included in the collective claim.
Finally, as regards the enforcement of judgments, article 247 of Law 36/2010 has been amended to establish the regulation applicable to the enforcement of final rulings on collective procedures relating to collective measures (geographical mobility, substantial modification of working conditions, contract suspensions and timetable reductions, collective dismissals, etc.) that are declared void.
5. ENTRY INTO FORCE
RDL 11/2013 entered into force on 4 August 2013, the day after its publication. However, it is worth noting that: (i) the geographical mobility procedures, substantial modifications of working conditions, collective dismissals, temporary contract suspensions and timetable reductions and the non-application of the working conditions of the applicable collective bargaining agreements will be governed by the legislation in force when the proceedings started; and (ii) the above modifications to collective dismissal proceedings will only be applicable to proceedings initiated after the entry into force of RDL 11/2013.