1. - LAW 1/2014 OF 28 FEBRUARY ON PROTECTING PART-TIME WORKERS AND OTHER URGENT SOCIAL AND ECONOMIC MEASURES
Law 1/2014 of 28 February on protecting part-time workers and other urgent social and economic measures, published in Spain’s Official Gazette on 1 March 2014, gives the status of “law” to Royal Decree-Law 11/2013 of 2 August, transcribing its content in full without making any significant modifications.
Law 1/2014 amends various laws, such as Law 22/2003 of 9 July on Insolvency, Law 21/2003 of 7 July on Aviation Safety, and Law 39/2003 of 17 November on the Rail Sector.
The main labour-related amendment is the requirement that a jobseeker be registered with the public employment office in order to be entitled to receive unemployment benefits and to continue receiving them.
It also amends five articles of the Statute of Workers in order to unify the regulation applicable to negotiating committees and individuals who can act as representatives during consultation periods on the following collective measures: (i) geographical mobility (article 40.2 SW); substantial modifications of employment conditions (article 41.4 SW); temporary suspension of employment contracts and the reduction of working hours on economic, technical, organisational or production grounds (article 47.1); collective redundancies (article 51.2) and the inapplicability of employment conditions set out in collective bargaining agreements (article 82.3).
2. CONSTITUTIONAL COURT UPHOLDS CONSTITUTIONALITY OF IMPLEMENTING THE LABOUR MARKET REFORM BY VIRTUE OF A ROYAL DECREE
Judgment of the Constitutional Court dated 14 March 2013
A Labour Court of Madrid lodged an appeal with the Constitutional Court (“CC”) claiming that Royal Decree-Law 11/2013 of 2 August (“RDL”) was entirely unconstitutional and, specifically, that Chapter IV and the fifth transitional provision did not comply with article 86.1 of the Spanish Constitution in relation to article 1.3 of the same.
The infringement of these articles was argued from two perspectives: (i) the “extraordinary and urgent need” required by article 86.1 of the Constitution to justify the passing of the RDL did not exist; and (ii) the RDL affected fundamental rights, which is expressly prohibited by the Constitution.
The facts that triggered the constitutional challenge were the following: an employee who had worked for more than eighteen years was denied a retirement pension due to the fact that she did not make social security contributions for the required period as established in the RDL.
The CC dismissed the constitutional challenge brought by the Labour Court of Madrid. Firstly, the CC upheld the government’s use of this legislative technique (i.e., the RDL) by arguing that the existence of an “extraordinary and urgent need” must be assessed by the government, and that therefore, it was not for the CC to undertake any evaluation of the opportuneness of using such a legislative technique to implement the labour market reform. Having said this, the CC did consider that the RDL was not an arbitrary choice given that it was based on economic data that indicated the existence of an urgent need to implement measures in the Spanish employment market.
Secondly, the CC rejected the claim that the RDL infringed the right to work (article 35.1 of the Constitution) as it is not an incentive to rescind contracts, as was argued in the constitutional challenge.
3. SUPREME COURT UPHOLDS MODIFICATION OF A VARIABLE REMUNERATION SYSTEM
Judgment of the Supreme Court dated 21 January 2014
The variable remuneration system of the companies of the Cortefiel group, which sells clothes and accessories, was linked to the sales made by each employee without taking into account the positive or negative results of the store in which they worked. In contrast, a store manager only received a commission if the store reached its annual sales target.
In June 2012, the group started a consultation period with a view to substantially modify the variable remuneration system of all employees. The modification was justified on economic grounds and sought to link the commissions to the group’s financial results. However, the consultation period ended without an agreement between the company and the employee representatives, so the company directly applied the modification.
The employee representatives filed a collective dispute complaint with the National Court in which they requested that the court declare the measure null, but it was dismissed. They then lodged a cassation appeal in the Supreme Court claiming an infringement of articles 41.4 and 4 of the Statute of Workers in relation to article 37 of the Spanish Constitution and article 1,256 of the Civil Code.
The key argument made in the appeal was that the general decrease in sales in the textile sector (of almost 30%) meant the threshold the group had set to receive commissions was unattainable and disproportionate since it was impossible for the group to achieve those results.
The Supreme Court dismissed the appeal and confirmed the decision of the National Court that held that there were economic grounds that justified the modification because of the decrease in the group’s sales. The Supreme Court upheld the group’s argument that the measure was proportional because it had increased the commissions to offset the modification of the variable remuneration system.
4. ACCIDENT SUFFERED BY AN EMPLOYEE IN THE WORKPLACE DURING REST TIME IS A WORK ACCIDENT
Judgment of the Supreme Court dated 27 January 2014
The facts of this case are the following: an employee who rendered cleaning services in a livestock company was authorised by the company to stay in the premises during his lunch break. On 28 October 2011, when the other employees returned to the workplace after the lunch break, they found him trapped under a silo.
The company and its insurance provider argued that the accident could not be classed as a work accident because it occurred during lunch time, so the employee was not carrying out any work-related activity. However, the Labour Inspectorate considered that there had been an infringement and proposed the company be ordered to pay a surcharge on the employee’s social security contributions because the accident was a work accident.
The employee’s family filed a complaint in the labour courts of Ávila that was dismissed. Their appeal to the High Court of Justice of Castilla León was also dismissed.
They then filed a cassation appeal in the Supreme Court, which held that the definition of work accident established in article 115.1 of the General Social Security Law was sufficiently broad as to cover an accident such as this one, which not only happened in the workplace, but also during working hours.
5. CONTRACTUAL PROVISION REQUIRING EMPLOYEES TO PROVIDE THEIR PERSONAL TELEPHONE NUMBERS AND E-MAIL ADDRESSES TO THEIR EMPLOYER DEEMED VOID
Judgment of the Labour Chamber of the National Court dated 28 January 2014
On 16 October 2013, the COMFIA-CCOO trade union filed a claim in the National Court (“NC”) against a company in the contact centre sector.
The facts of the case were as follows: the company was including a clause in its new employment contracts by virtue of which all employees were required to provide the company with their personal telephone numbers and e-mail addresses. Any notification from the company to the employees was to be made in this way. The claimant filed a claim with the Labour Inspectorate, which issued a warning to the company.
The claimant sought to have this clause deemed abusive and thus void on the following grounds: (i) the contractual provision obliged the employees to have a mobile phone and an e-mail address; and (ii) the employees would have to be available to the company outside working hours.
Firstly, the NC held that the data concerned, i.e., personal telephone numbers and e-mail addresses, were of a personal nature and are therefore expressly protected by the Basic Law on Personal Data Protection.
Therefore, the NC held that the communication of the employees' telephone numbers and e-mail addresses would require their express consent in accordance with article 6.1 of the Basic Law. Furthermore, the NC deemed that the case at hand did not fall within the scope of the exceptions contained in article 6.2 because the company did not prove that the data requested from the employees were necessary for the fulfilment of the obligations arising from the employment contract.
Therefore, the NC upheld the complaint and declared the contractual provision to be void because the company could not impose the obligation on employees to communicate their personal data as this would be in breach of the Basic Law on Personal Data Protection.
6. NATIONAL COURT UPHOLDS THE CONSTITUTIONALITY OF ARTICLE 82.3 OF THE STATUTE OF WORKERS
Judgment of the Labour Chamber of the National Court dated 11 February 2014
A company commenced a consultation period on not applying its collective bargaining agreement (“CBA”), substantially modifying employment conditions and carrying out a collective redundancy as a consequence of the financial losses that it suffered in 2011 and 2012. However, in June 2013, the company was awarded a contract with the Tax Agency valued at EUR 3 million.
On 3 July 2013, the consultation period came to an end without an agreement between the company and the employee representatives having been reached. Therefore, the company filed an application with the National Consultative Commission on Collective Bargain Agreements (“NCCCBA”) not to apply the CBA’s salary scales for 2013 and 2014.
On 31 July 2013, the arbitrator designated by the NCCCBA issued an arbitration award in favour of the company stating that the salary scales were not to be applied until 30 April 2014. The award also authorised the company to reduce the salary of all its employees by 10%.
The CCOO and CGT trade unions filed a claim in the National Court (“NC”) against the arbitration award.
As a preliminary question, allegations were made about the constitutionality of article 82.3 of the Statute of Workers regarding the authority of the NCCCBA to not apply collective bargaining agreements if the parties have not reached an agreement to do so. The NC held that this article was constitutional and confirmed that it was possible to include provisions in CBAs so that they may not be applied as a consequence of unexpected new economic circumstances.
Furthermore, the NC held that in procedures concerning the non-application of CBAs, both parties have to negotiate in good faith. This was deemed an essential precondition for the NCCCBA to have authority in these situations. In the case at hand, despite the unions’ claim that the company did not negotiate in good faith, the NC held that the company had negotiated in good faith because it had made proposals and counterproposals.
Therefore, the NC dismissed CCOO and CGT’s claim.
7. RETROACTIVE EFFECT OF COLLECTIVE BARGAINING AGREEMENTS
Judgment of the National Court dated 25 February 2014
The Private Security Companies Workers Union filed a claim with the National Court (“NC”) against the signatory unions of the new Collective Bargaining Agreement (“CBA”) for Private Security Companies for 2012-14.
The new CBA was adopted by the negotiating committee on 12 March 2013, which established it would have retroactive effect from 1 January 2012. The committee also decided to override the former CBA, which was effective until 31 December 2012, and to set aside the 2012 wage increases provided for in the former CBA.
The claim sought a declaration from the NC stipulating that: (i) the 2012-14 CBA that entered into force on 1 January 2012 was unlawful as it sought to avoid the application of salary increases under the former CBA, with which it overlapped; and (ii) the remuneration employees were entitled to in 2012 was that established in the former CBA, and this should be applied with retroactive effect.
In response to the first request, the NC held that the negotiating committee was entitled to replace the former CBA, because the new statutory CBA was negotiated between individuals with authority to modify an existing CBA applicable to the same territory, personnel and sector. Therefore, in accordance with established principles, the applicable CBA is the most recent one.
The NC further held that a new CBA could amend the provisions of a former CBA. In the case at hand, it was lawful to establish a salary reduction compared to the former CBA, but this reduction could only be applied to collective salary conditions set out in the CBA and not to individual conditions established in employment contracts.
As regards the retroactive effect of CBAs, the NC held that CBAs may contain provisions that take effect from a date prior to their entry into force. In this regard, the NC stated that the Constitution only prohibited retroactive effects on legal effects that have already arisen from situations predating the entry into force of new provisions.
Therefore, the disputed provision is lawful as it does not affect the employees’ remuneration prior to its entry into force on 1 January 2012.