The Supreme Court (“SC”) has ruled that carrying out self-employment activities during unpaid leave to care for a child does not invalidate the leave.
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The SC has held that a company’s refusal to reinstate an employee in his usual workplace after five years of unpaid leave cannot be deemed an unfair dismissal. However, an employee cannot be forced to be reinstated in another workplace that is in a different town.
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The SC has held a collective redundancy affecting 62 employees to be lawful as the employer justified the existence of organisational reasons resulting from a takeover.
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The SC has upheld the judgment of the National Court (“NC”) by declaring that a public company cannot request its employees to return the extra pay that it has unlawfully included in its collective bargaining agreement.
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Call centre workers can choose their weekly timetable according to the applicable collective bargaining agreement because it takes priority over and is more beneficial to workers than the provisions in the Statute of Workers, which refer to working days rather than working weeks.
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The compensation package agreed for the termination of a senior executive employment relationship must not take into account remuneration in kind if the employment contract does not provide so. The payments for the pension commitments that are outsourced to insurance companies must be made after the termination of the employment contract only when (i) the premiums are itemised, and (ii) the insurance contract acknowledges the right to collect payments.
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The Labour Chamber of the High Court of Justice of Castile and Leonhas upheld a dismissal for disciplinary reasons on the basis that an employer had provided sufficient evidence of a continuous and voluntary reduction in its employee’s performance levels. The employee’s reasoning that his new post and the general economic crisis were the cause of the drop in his performance levels was not justifiable, as other employees in a similar situation had achieved much higher results.
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An employer’s decision to unilaterally withdraw from a domestic worker’s employment contract which she was notified of the day before she was due to return to work after maternity leave has been held to be fair.
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1. COMPATIBILITY OF SELF-EMPLOYMENT WITH UNPAID LEAVE TO CARE FOR A CHILD
Judgment of the Labour Chamber of the SC dated 10 February 2015
While an employee was on unpaid leave to care for her fifth child, she carried out a self-employed activity that was compatible with caring for her child. After the birth of her sixth child, she requested the corresponding maternity pay in accordance with article 133 of the General Social Security Law (“GSSL”). The Social Security granted the requested pay under the Social Security Scheme for Self-employed Workers but not under the General Social Security Scheme.
The SC upheld the appeal for unification of doctrine and ruled that the employee was entitled to receive maternity pay under the General Social Security Scheme on the grounds that the GSSL does not require a parent to exclusively dedicate their time to child care. The SC considered that the working mother should not be prevented from earning money, which she had stopped making as a result of being on maternity leave, provided that her self-employment was compatible with properly caring for her child.
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2. EMPLOYEE’S REFUSAL TO BE REINSTATED IN A DIFFERENT TOWN DOES NOT CONSTITUTE RESIGNATION
Judgment of the Labour Chamber of the SC dated 4 February 2015
The SC declared that (i) an employer’s refusal to reinstate an employee at the same workplace after five years of unpaid leave, did not constitute an unfair dismissal, and (ii) the employee’s refusal to be reinstated in a different workplace did not imply his resignation. Consequently, the employee had the right to fill a vacancy arising in his professional category in his usual workplace.
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3. FAIR COLLECTIVE REDUNDANCY BASED ON ORGANISATIONAL REASONS
Judgment of the Labour Chamber of the SC dated 28 January 2015
The appeal was brought by two trade unions that challenged the collective redundancy. The trade unions requested: (i) that the 62 redundancies be declared null as they failed to comply with the formal legal requirements; and (ii) that the redundancies be declared unlawful due to a lack of legal grounds.
The collective redundancy was held to be lawful at first instance because it complied with all the legal formalities and organisational reasons existed.
The SC upheld the first instance judgment based on the following: (i) the appellant alleged a violation of Royal Decree 1438/2012 but the alleged facts failed to demonstrate an erroneous decision at first instance; and (ii) the organisational reasons for the redundancy were proved, since they derived from a takeover approved by the Council of Ministers. The takeover resulted in the company’s restructuring which in turn led to the duplication of several posts. The measure was therefore deemed proportionate.
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4. A COMPANY CANNOT REQUEST ITS EMPLOYEES TO RETURN EXTRA PAY THAT IT UNLAWFULLY INCLUDES IN ITS COLLECTIVE BARGAINING AGREEMENT
Judgment of the Labour Chamber of the SC dated 19 December 2014
In 2001, a public company included an extra pay in its collective bargaining agreement without obtaining the mandatory authorisation from the Ministry of Finance. As the extra pay surpassed the applicable remuneration limits, the extra pay was considered null. In 2011, the company decided to remedy this irregularity by deducting the extra pay from the payslips that the employees would receive as of November 2012.
The NC held that the decision to eliminate the extra pay was lawful, but deducting it from the employees’ salaries was unlawful because the only party in the wrong was the company as it had promised to award its employees an extra pay without obtaining authorisation, and also because it had been making these payments for years.
The SC dismissed the company’s appeal for unification of doctrine and fully upheld the ruling of the NC.
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5. CALL CENTRE WORKERS CAN CHOOSE THEIR ORDINARY WEEKLY TIMETABLE IF THEY HAVE REDUCED THEIR WORKING HOURS TO CARRY OUT THEIR ROLE AS A LEGAL GUARDIAN
Judgment of the Labour Chamber of the NC dated 23 March 2015
In this case, the NC settled a dispute regarding the rights of workers to choose their timetable if they have reduced their working hours to carry out their responsibilities as a legal guardian and for family reasons.
The trade unions claimed that according to the applicable collective bargaining agreement call centre workers can choose their ordinary weekly timetable. However, the company argued that according to article 37.5 of the Statute of Workers (“SW”) they can only set their daily timetable.
The NC held that article 33 of the collective bargaining agreement for call centre workers takes priority over the SW because it is more beneficial to workers and therefore upheld the claim.
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6. ITEMS TO BE INCLUDED IN COMPENSATION PACKAGE AGREED FOR TERMINATION OF SENIOR EXECUTIVE EMPLOYMENT RELATIONSHIP
Judgment of the Labour Chamber of the High Court of Justice of Galicia dated 13 February 2015
The appellant argued that the notice she gave to terminate her senior executive employment relationship could not be considered a withdrawal, but rather a statement of intention subject to the existence of a cause, which in this case was a change of ownership in the company. She therefore argued that she was entitled to receive her salary during her notice period.
The judgment of the High Court of Justice of Galicia (“HCJG”) confirmed that a change of ownership in the company could not be the cause of her decision to terminate her relationship with the company as it had taken place several months after she had given her notice. Moreover, from a literal interpretation of her notice it could be inferred that the employee’s intention was to terminate the contract.
The HCJG also clarified that remuneration in kind could not be taken into account to calculate her compensation package because her employment contract did not establish any such remuneration.
The employee also sought confirmation from the HCJG that she was entitled to the payments for the pension commitments that the company had outsourced to an insurance company. However, these rights are only applicable after the termination of an employment contract if (i) insurance premiums are itemised and (ii) the insurance contract acknowledges the right to collect payments. In this case, the insurance contract did not state that the insured would be entitled to any right linked to the pension commitments should her senior executive employment relationship terminate. The HCJG therefore dismissed her appeal.
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7. DISCIPLINARY DISMISSAL BASED ON REDUCED PERFORMANCE LEVELS
Judgment of the Labour Chamber of the High Court of Justice of Castile and Leon dated 9 October 2014
The dispute arose from a disciplinary dismissal on the grounds of a continuous and voluntary decrease in an employee’s performance levels. The employee alleged that his poor performance was due to his failure to adapt to his new post, which had changed from manager to salesman, as well as to the general economic crisis.
The High Court of Justice of Castile and Leon upheld the ruling of the first instance court and declared the dismissal to be fair on the basis that (i) the company had proved that the employee’s performance levels fell below those of other employees, who on average tripled the employee’s sales figures, (ii) the general economic crisis did not justify his poor performance levels as the other employees in similar situations had identical resources and worked in the same geographical area, and (iii) the change of post did not imply a change for the employee as his tasks had always involved the sale and installation of security systems.
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8. EMPLOYER’S WITHDRAWAL FROM A DOMESTIC WORKER’S EMPLOYMENT CONTRACT AFTER WORKER’S MATERNITY LEAVE IS NOT DISCRIMINATORY
Judgment of the Labour Chamber of the High Court of Justice of Catalonia dated 7 October 2014
This case concerned an employer’s withdrawal from a domestic worker’s employment contract. The worker was notified of her employer’s decision the day before she was due to return to work after maternity leave. On the same date, the employer also withdrew from the employment contract of another domestic worker.
The High Court of Justice of Catalonia held that the worker’s fundamental rights had not been breached and that the withdrawal was legal under the regulations applicable to the special employment relationship of domestic workers. It found that the employer had not discriminated against the worker as the employee had also let go of another domestic worker under the same conditions and on the same date. It also held that there were significant differences between a dismissal and a unilateral withdrawal from an employment contract with a domestic worker, and as such article 55 of the Statute of Workers was not applicable and the employer’s decision was not null.
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1. COMPATIBILITY OF SELF-EMPLOYMENT WITH UNPAID LEAVE TO CARE FOR A CHILD