1. INFRINGEMENT OF TRADE UNION FREEDOMS DURING NEGOTIATIONS ON INTERNAL FLEXIBILITY MEASURES
Judgment of the Supreme Court dated 22 July 2015
The Supreme Court (“SC”) ruled on an appeal lodged by two banks against a judgment of the Labour Chamber of the National Court, dated 14 November 2013, which held that several internal flexibility measures implemented by the banks were void.
The background to the case brought before the SC is as follows: (i) two banks informed their employees’ trade union representatives that they wanted to start formal negotiations on the introduction of several internal flexibility measures that would entail substantial changes to working conditions, opting out of applying collective bargaining agreements, suspending employment contracts and reducing working hours; (ii) after four meetings, the formal negotiations ended without an agreement between the parties (the banks as employers, and the trade union representatives as the employees’ representatives); (iii) the banks informed the labour authorities and their employees of their final decision; (iv) the trade unions simultaneously initiated mediation proceedings before the public mediation and arbitration body (“SIMA”); (v) the banks decided to initiate informal negotiations with the trade unions representing the majority of their employees affected by the measures and reached an agreement with them; (vi) in the context of the SIMA proceedings, the banks put forward a new proposal that was accepted by the trade unions representing the majority of employees, but rejected by the other trade unions; (vii) the trade unions representing the minority of employees brought a collective dispute claim against the parties who reached the agreement before the SIMA, seeking to have it declared void on the grounds that the banks and the majority trade unions had infringed trade union freedoms protected by the Constitution.
The first instance ruling held that the mediation before the SIMA was a continuation of the formal negotiations initiated by the parties to implement the internal flexibility measures. As representatives of the minority trade unions were deliberately excluded from the negotiations between the parties that reached the agreement, the first instance ruling held that trade union freedoms were breached and, consequently, declared the internal flexibility measures implemented according to the agreement void.
The SC held that the first instance court’s reasoning was flawed; however it also considered that the internal flexibility measures should be declared void.
Specifically, the SC held that the mediation proceedings between the banks and the trade union representatives should not have been considered an extension of the formal negotiations that must be held by law to implement internal flexibility measures. The SC based its reasoning on the following main legal arguments: (i) when the mediation proceedings began, the formal negotiations had ended and the companies had already informed the affected employees of their decision; (ii) the parties could not evidence that an agreement had been reached to extend the formal negotiations; and (iii) the possibility of reaching an agreement before the SIMA with the same legal effects as an agreement reached in formal negotiations does not mean that there was an implicit agreement between the parties to extend the formal negotiations once ended.
The SC found that the trade unions initiated the mediation proceedings in compliance with articles 63 and 153.1 of the Labour Procedure Law, which set forth that conciliation or mediation proceedings must be held before filing a collective dispute claim.
Having said this, the SC acknowledged that the banks’ decision to exclude some trade unions from the negotiations was a breach of trade union freedoms, as it was evidenced that the banks had deliberately decided only to negotiate collective measures with the trade unions representing the majority of the affected employees.
In conclusion, it is contrary to the trade union freedoms guaranteed in articles 28 and 37 of the Constitution to exclude any trade union from the formal or informal negotiation of collective employment measures, even if the excluded trade unions adopt a far from constructive approach to the negotiations, they represent a minority of the affected employees, or even because of their limited involvement in the negotiations or because they initiate legal proceedings against the employers.
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2. OPT-OUT AGREEMENTS DO NOT HAVE RETROACTIVE EFFECT
Judgment of the Supreme Court dated 7 July 2015
The Supreme Court (“SC”) analysed the applicability of opt-out agreements (acuerdos de descuelgue) overriding the terms of collective bargaining agreements (“CBA”). In particular, the decision examined whether the former agreements can apply retroactively.
In contrast with the arguments put forward by the appellants, the SC confirmed that the freedom to lay down the term of agreements, established in article 86.1 of the Statute of Workers (“SW”), refers only to CBAs and not to opt-out agreements overriding stipulations of CBAs.
In addition, the SC stated that article 82.3 of the SW, which regulates the possibility of overriding stipulations in CBAs, does not allow the parties to an opt-out agreement to set a term different than that established in the CBA. The SC concluded that, although article 82.3 of the SW does not expressly limit the retroactive effect of opt-out agreements, this can be inferred from the SW itself. The SW states that “CBAs regulated by [the SW] are binding on all employers and employees under its scope of application during their entire term.” Consequently,since the CBA must be applied in the absence of an agreement confirming that it is no longer applicable, opt-out agreements cannot have retroactive effect. In other words, opt-out agreements’ overriding stipulations in CBAs can only apply from the moment they are agreed onwards.
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3. A FINAL FIRST INSTANCE JUDGMENT IN COLLECTIVE PROCEEDINGS CAN BE CITED IN AN APPEAL TO THE SUPREME COURT TO UNIFY LEGAL DOCTRINE
Judgment of the Supreme Court dated 16 June 2015
The Labour Chamber of the Supreme Court (“SC”) has changed its doctrine whereby a first instance judgment rendered in collective proceedings could not be used, as a contrasting ruling, when appealing a decision to the SC.
The SC changed its doctrine as a result of the amendment of the Spanish Labour Court Regulation (“LRJS” for its Spanish acronym). According to article 160.5 of the LRJS, final judgments rendered in collective proceedings have res judicata effect over ongoing or future individual proceedings when they relate to a similar matter between the same parties. Particularly, article 160.5 of the LRJS states that this res judicata effect also applies to appeals to the SC, even if the final judgment was not put forward by any of the parties as a contrasting ruling.
The SC concluded that, according to the new wording of article 160.5 of the LRJS, its previous doctrine needed to change. The SC stated that a final first instance judgment rendered in collective proceedings can be put forward when appealing to the SC because, otherwise, the fundamental right to proper legal protection generally preserved by the res judicata effect would be lost.
In the case in question, the appellants considered that the appealed decision contained an interpretation of a provision of their company’s collective agreement that differed from that in another prior first instance decision on the same matter in collective proceedings that became final before the appealed decision was settled. The SC gave leave for the appeal to proceed and then revoked the appealed judgment as it was contrary to res judicata.
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4. REDUCTION OF VARIABLE REMUNERATION DUE TO COMPULSORY MATERNITY LEAVE
Judgment of the Supreme Court dated 27 May 2015
The Supreme Court (“SC”) analysed the legality of a company policy which reduced the variable remuneration by the six weeks after childbirth that women on maternity leave are entitled to.
The variable remuneration policy required employees to be present in the workplace to accrue the remuneration. Therefore, an authorised absence of more than 30 days in a year entailed a reduction in variable remuneration. The company’s policy stated that maternity leave was an authorised absence that justified this reduction.
The SC’s decision is based on its previous rulings as well as those of the Constitutional Court. “Women’s biological protection must be compatible with their career rights and any harm to their career rights as a result of pregnancy or maternity leave is sexual discrimination”. The SC rejected the company’s arguments regarding managerial and organisational power and lack of discrimination as the policy applied to both women and men. The company’s policy infringed the law as clearly only women were eligible for those six weeks, and consequently the only ones affected by this provision.
Given the above, the SC held the company’s policy to be discriminatory and obliged the company to repay any remuneration deducted under the policy.
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5. SUBSTANTIAL CHANGE TO MORE FAVOURABLE CONDITIONS
Judgment of the National Court dated 27 July 2015
This judgment analysed a company’s decision to change employees’ working hours with a view to determining whether or not the decision constituted a substantial change in working conditions and, consequently, to confirm whether or not the changes complied with article 41 of the Statute of Workers.
In particular, the case involved the company’s unilateral decision to eliminate compressed working hours during the summer and on Fridays that employees had enjoyed for ten years, as well as flexible working hours implemented in 2012. Despite the company’s efforts to demonstrate that the flexible working hours programme was merely a pilot and that, consequently, the company had merely tolerated the situation, the National Court considered that it had been implemented much longer than envisaged and that, as a result, it had become a real working condition.
Therefore, the National Court concluded that a substantial change to working conditions had been implemented, since the company’s decision significantly changed previously established working conditions to the detriment of the employees. The National Court declared the decision null since the company had not previously negotiated with the employee representatives.
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1. INFRINGEMENT OF TRADE UNION FREEDOMS DURING NEGOTIATIONS ON INTERNAL FLEXIBILITY MEASURES