1. CHANGE IN CRITERIA on the APPLICATION OF THE AGE REDUCTION COEFFICIENT TO FLIGHT CREW TO DETERMINE RETIREMENT PENSIONs
Judgment of the Supreme Court dated 12 December 2013
In this judgment the SC analysed an appeal filed by the National Social Security Institute and the Social Security General Treasury regarding a pilot’s application to draw his state pension pursuant to Royal Decree 1559/1986 of 28 June, and the case law of the SC set out in a judgment dated 28 June 2013. At the time of making the application, the pilot was 64 years, five months and 16 days old. At that age, the age reduction coefficient established in Royal Decree 1559/1986 was not applicable as the pilot was already very close to the standard retirement age. However, the pilot wanted the age reduction coefficient to be applied so that his contribution period was “artificially” increased to ensure that he was entitled to receive a full state retirement pension.
In accordance with Spanish social security law, workers in specific jobs considered by the legislature as dangerous or insalubrious are entitled to claim their state retirement pension at a younger age than other workers. In order to offset the reducing effect that claiming their retirement pension early has on these employees’ social security contribution periods, from the date they claim their state retirement pension until the date they reach the standard retirement age is considered (fictitiously) as a period during which they have made social security contributions.
The SC held in this judgment that in those cases where, because of the employee’s age, it is not possible to apply the age reduction coefficient under Royal Decree 1559/1986 to draw the state retirement pension early, the employee’s contribution period cannot be artificially increased to calculate the employee’s state retirement pension because that interpretation conflicts with the contributory principle that governs the Spanish social security system.
2. Changing worKING conditions FOR health REASONS iS not a substantial MODIFICATION OF working conditions
Judgment of the Supreme Court dated 18 December 2013
In this judgment, the SC analyzed a claim filed by an employer against the judgment of the Labour Chamber of the High Court of Justice of the Basque Country dated 17 January 2012 which stated that an employer had substantially modified the working conditions of one of its employees upon discovering that the current working conditions were a risk for the employee’s health.
The employee worked at the Bilbao airport under a working timetable that was divided into morning and afternoon shifts which were decided on a monthly basis according to the calendar set by the company. When the Mutual Insurance Company for Occupational Accidents and Diseases detected that an employee had health problems, the employer decided, in accordance with the existing health and safety protocol, to change her working day to a fixed morning shift timetable from 09:00 to 14:00 hrs. After some time, and upon being informed that the employee no longer suffered the health problems that gave rise the change in timetable, the company informed the employee that she would be returning to her regular timetable.
The employee considered that this change entailed a substantial modification of her working conditions and thus that the Company was obliged to follow the procedure established in the Statute of Workers for this purpose.
The SC held that the measure adopted by the employer was not a substantial modification of working conditions because the change was not a discretionary decision based on business reasons but a compulsory decision according to the current regulations in force on the prevention occupational hazards.
3. GROUPS OF COMPANIES FOR LABOUR PURPOSES and the “piercing OF the corporate veil” doctrine
Judgment of the Supreme Court dated 29 January 2014
The SC analysed the appeal lodged against the decision of the HCJG dated 21 March 2013, which declared the collective redundancy void in an aluminium processing Company. The Company, its group companies and shareholders were held jointly liable for the employees.
The facts of the case were: (i) the Company informed the only employee representative of its decision to terminate all the employment contracts at the Company (11 employees) on the basis of economic and productive reasons based on current losses and a significant decline in the Company’s sales. The Company had been declared insolvent and was the subject of liquidation proceedings; (ii) the Company director had close family and personal ties with the shareholders and directors of the other companies he had a business relationship with; (iii) the Company had been selling a substantial part of its assets to one of its companies for no consideration. Specifically, vehicles, machinery and equipment were moved from one plant to another belonging to the group. Company employees worked on the different sites interchangeably; and (iv) Company employees worked for any of the companies and their shareholders and company directors.
The SC upheld the ruling of the Labour Chamber of the HCJG, declaring the collective redundancy void and holding that all the companies in the group, as well as the shareholders and directors of the other companies were jointly liable for the employees.
In reaching its decision, the SC reaffirmed the decisions of 20 and 27 May 2013 on collective redundancies. It analysed the group of companies for labour purposes and every indication led to the existence of a group in this case.
Furthermore, shareholder or company director abuse was deemed attributable to the companies of the group for labour purposes. Given that Company benefits were used to the employees’ detriment, this permitted the SC to pierce the corporate veil and determine the existence of a single corporate entity consisting of the companies involved, their shareholders and directors.
4. ABANDONMENT OF A Conventionally-ORGANISED bargaining unit
Judgment of the Labour Chamber of the National Court dated 29 January 2014
The NC heard a claim against the XVII National Collective Bargaining Agreement for the Chemical Industry filed by the association of employers ANAIP, FEIQUE, FITEQA, and FITAG, all of whom signed the Collective Bargaining Agreement.
The most representative association of employers in the chemical industry sector is FEIQUE. During the negotiation of the XVII Collective Bargaining Agreement, FEIQUE invited ANAIP to participate in its negotiation. However, ANAIP refused the invitation demanding that FEIQUE justify its capacity to act as representative in the plastics processing industry. As ANAIP believed that FEIQUE lacked the necessary capacity for the plastic processing industry, it sought the negotiation of a new collective bargaining agreement. Nevertheless, negotiations for this new agreement did not take place because the trade union organisations in the sector refused to participate. Against this background, ANAIP challenged the XII National Collective Bargaining Agreement for the Chemical Industry before the courts.
This judgment analysed the limits that are imposed upon the parties when negotiating a collective bargaining agreement. The NC highlighted that the parties are free to agree the scope of application of the collective bargaining agreement given that the Statute of Workers (“SW”) does not provide any stipulations in this regard. However, this freedom is limited by the following factors:
- The applicable statutory rules impose the first limitation on this matter. Parties must be qualified, in accordance with articles 87, 88 and 89 of the SW in order to negotiate a collective bargaining agreement. The SW provides that the capacity to represent may be evidenced by the parties’ mutual recognition of the same in areas where obvious difficulties in proving the representativeness of each party exist. As the collective bargaining agreement is considered to be a collective contract it is possible to apply the pacta sunt servanda rule, which means that, over the life of the collective bargaining agreement, the scope of application of the collective bargaining agreement cannot be altered by external decisions of other parties who did not sign the agreement themselves. In conclusion, during the validity period of the pacta sunt servanda under the SW forbids the splitting off of bargaining units from their original scope of application.
- A second limitation exists, specifically constitutional provisions, which prevail over any other provisions in this regard. It is not possible to violate fundamental rights, including the fundamental right to equality (article 14 of the Spanish Constitution), when delimiting the personal scope of application of a collective bargaining agreement. As a result, it is not possible to (a) establish unreasonable or disproportionate exclusions regarding the personal scope of application of the collective bargaining agreement or (b) include parties in an artificial or contrived manner. Thus, it is not possible for the collective bargaining agreement to be binding upon groups which are beyond the logical scope of negotiation of the collective agreement.
ANAIP considered that the bargaining unit configured by the XVII National Collective Bargaining Agreement for the Chemical Industry was arbitrary as it included the national plastic processing industry sector, which they deemed to be unreasonable. Hence ANAIP took the view that the XVII National Collective Bargaining Agreement for the Chemical Industry was illegal and, in consequence, its split from the scope of application of the XVII National Collective Bargaining Agreement for the Chemical Industry should be considered legal.
However, the NC dismissed the claim filed by the ANAIP, holding that the arguments it put forward did not apply. This was because the integration of the plastic processing industry in the scope of application of the XVII National Collective Bargaining Agreement for the Chemical Industry has customarily been accepted by the parties in the past. Furthermore, the conceptual characteristics of the plastic processing industry do not differ substantially from those of the chemical industry, meaning that its inclusion was neither unreasonable nor arbitrary.
5. LEGALITY OF CONTROLLING COMPUTING RESOURCES NOT USED FOR LABOUR PURPOSES
Judgment of the Labour Chamber of the High Court of Justice of Andalusia dated 29 January 2014
The HCJA overturns the first instance ruling on the unfair dismissal of three employees for using company-supplied computing resources for non-work related purposes; thus violating the employer-imposed prohibition against the personal use of these resources.
In this case the employees signed an agreement that included an absolute prohibition against using company-supplied computing resources (computers, mobiles, internet, etc.) for personal use, whether or not this took place in working hours. The employer had reasonable suspicions of infringement based on previous infringements. As a result, the company installed a program on the employees’ computers that saved a screenshot of the computers every ten seconds. The employees were not notified of the existence of the control program. The company determined that three employees had been consistently violating the prohibition against using the computing resources for personal purposes and were dismissed for disciplinary reasons.
The dismissed employees filed a claim that was upheld at first instance. The first instance judge considered that the company’s investigation prior to dismissal was illegal, as the employees were not notified of the existence of the measures.
Our January 2012 newsletter analysed the Supreme Court (“SC”) judgment of 6 October 2011. In that case the SC held that, although the company had not expressly issued a notice regarding the potential installation of software to monitor the use of computing resources, the prohibition was so categorical that it could not give rise to a legitimate expectation of privacy regarding the computing resources. The dissenting opinion referred to previous case law, where despite an absolute prohibition, it was held that the employees should be warned about the possibility of periodic controls. If the employers failed to warn the employees, this would constitute a violation of privacy.
In the case at hand, the employees were all notified of the absolute prohibition against using the company’s computing resources for personal purposes. Indeed, one of the employees had been previously sanctioned for violating the order, and another was aware of the prohibition and the company policy. She even wrote on Facebook that if she were caught chatting, she would be dismissed
The HCJA held that, as a valid prohibition was in place against using the company’s computing resources for personal purposes, the warning regarding the possible installation of monitoring programs was implicit and therefore, the employees had no legitimate expectation of a right to privacy. The rationale behind the HCJA’s decision is the constitutional theory that the right to personal privacy may be voluntarily surrendered. In line with the SC’s judgment of 6 October 2011, the HCJA held that there was no need for an explicit warning and declared the dismissal fair.
6. LIMITed enforceability OF COLLECTIVE BARGAINING AGREEMENTs after their expiry date AND INTERPRETATION OF “TO THE CONTRARY PACT”
Judgment of the Labour Chamber of the High Court of Andalusia dated 23 January 2014
In this judgment, the High Court of Andalusia applied the new regulations on the limited enforceability of collective bargaining agreements once their initial expiry date has passed, as introduced by Royal Decree-law 3/2012, even though the collective bargaining agreement in question stipulated that it would remain in force until a new collective bargaining agreement entered into force.
In this case the town council of Bailén informed the trade unions that had signed the collective bargaining agreement applicable to the town council’s employees (UGT and CCOO) that it would cease to be in force from July 2013 because an application for its review had been made in 2009. The collective bargaining agreement contained a clause that was worded as follows: “Once an application is made to review the collective bargaining agreement, it will remain in force until a new agreement that substitutes it is reached.” Following the town council’s decision, and after a conciliation meeting before the public conciliation service, UGT and CCOO filed a claim against the town council that resulted in the first instance court declaring void the town council’s decision holding the collective bargaining agreement unenforceable.
The judgment analyses the regulations on the continued application of collective bargaining agreements under Law 3/2012 of 6 July on urgent measures to amend the labour market (“Law 3/2012”), which entered into force on 7 July 2012. If an application was made to review a collective bargaining agreement before Law 3/2012 entered into force, the collective bargaining agreement continued in force for one more year after the application, and thereafter the corresponding sector-wide collective bargain agreement was applied, unless the parties “had agreed otherwise” (which gave them more time to negotiate a new collective bargaining agreement).
In analysing when it should be considered that the parties “had agreed otherwise”, the judgment points out that the issue is “whether the legislature is only referring to agreements reached after the labour reform, or those reached after or simultaneously to an application to review or the end of the initial term of the collective bargaining agreement.”
The judgment holds that any agreement to the contrary must be an express pact that clearly and voluntarily excludes the application of Law 3/2012. As such, the provisions of Law 3/2012 on the limited extended application of collective bargaining agreements cannot be excluded by a pact reached many years before Law 3/2012 entered into force. To give effect to these pre-existing pacts would imply an incongruous interpretation of Law 3/2012.
7. NULLITY OF A transfer DECISION DUE TO the infringement of AN EMPLOYEE’S fundamental rights
Judgment of the Labour Chamber of the High Court of Justice of Madrid dated 3 February 2014
The HCJM heard an appeal lodged by an employee of a well-known bank whereby she claimed that her working conditions had been substantially modified as a result of the restructuring of the bank’s branches.
The restructuring process, which was agreed with the trade union representatives, was a result of the bank’s merger with another bank. As part of the restructuring, it was agreed that some employees who worked at overstaffed branches would be transferred to other offices that had vacancies. It was agreed to give priority to employees who volunteered to be transferred over those forced to do so and that, in any event, the company would take into consideration the employees’ preferences, the proximity of the branches to their homes and also certain situations protected by law. The company notified the employee that as the Aravaca office (Madrid) where she normally worked was overstaffed; she had been chosen to be transferred to the nearest office that had a vacancy, which was located in Mataró (Barcelona). The employee did not fall under any of the special circumstances that would legally protect her from being transferred; however, as she had a 12-year old child, she had a reduced working day.
As the parties had agreed that the substantial modification to the employee’s working conditions was due to organisational reasons, the purpose of the trial was limited to the lawfulness of the employer’s choice, in particular, its compliance with the employee’s fundamental rights when selecting her. The HCJM considered that the employee had sufficient proof that she had been discriminated against: (i) on the date she was informed of her transfer her son was one year and 23 days old; (ii) at that time she had a reduction in her working time for that reason; (iii) despite these facts, she was told she had to work 600km away; (iv) she was notified of her transfer only a few days after her son turned one year old, which meant that she was no longer legally protected from such transfer as parents with children who are one year old or younger are legally protected from being transferred. Given that the employee had provided evidence that satisfied the burden of proof, it was up to the company to prove that the decision to transfer her did not in any way relate to the infringement claimed. The company did not provide evidence that complied with its burden of proof as it only proved that there were objective causes for the employee’s transfer. The HCJM held that the company should have proven that there were no other vacancies closer to where the employee lived and the closest vacancies should have been offered to her.
The HCJM declared that the company’s transfer of the employee was void as the measures taken to select her were discriminatory.