January 2007

NEWSLETTER

The information contained in this Newsletter is of a general nature and does not constitute legal advice



LABOUR LAW

 


National minimum wage for 2007

The aim of Royal Decree 1632/2006 of 29 December is to establish the new national minimum wage that came into force on 1 January 2007, which applies to fixed, part-time and temporary workers as well as domestic staff. (More information)

Social security. Development of contribution rules

Order TAS/31/2007 of 16 January develops the rules on contributions to Social Security, the guaranteed wages fund and for professional training that are included in Law 42/2006 of 28 December on the National Budget for 2007. Spanish Official Gazette, 19 January 2007. (More information)

Procedural formalities. Lexnet IT system. Filing of writs, documents, copies and notifications

The Council of Ministers has approved a Royal Decree that sets out the general conditions and requirements for the use of the Lexnet IT system. The system simplifies the submission of written statements, documents, copies and procedural notifications through the use of e-mails and electronic signatures. (More information)

Right to privacy. Installation of security cameras in workplaces

The judgment of the High Court of Justice of Castilla y León (Valladolid) of 18 September 2006 holds that the installation of security cameras by a company does not breach the employees’ right to privacy as the measure meets the suitability, necessity and proportionality requirements established by the Constitutional Court. In addition, the cameras are positioned in passageways and work areas, sound cannot be recorded, the focus of the cameras cannot be changed, the images will not be circulated and finally the system is not yet in operation. (More information)

Unfair dismissal. Contract for specific works or services. The temporary nature of a contract for specific works or services cannot be justified by on the grounds of the duration of the related subsidized program

The judgment of the Supreme Court of 10 November 2006 declares that the termination of a contract for specific works or services owing to the finalization of a related subsidized program constitutes an unfair dismissal. Here the subsidy is not a decisive and conclusive element in determining the validity of the temporary contract. (More information)

Compulsory retirement. Collective bargaining agreement. Alleged infringement of articles 14, 24.1 and 35.1 of the Spanish Constitution

The judgment of the Constitutional Court 341/2006 of 11 December establishes that the setting of a compulsory retirement age in a collective bargaining agreement is constitutionally lawful provided that it seeks to ensure the achievement of employment policies and it does not disproportionately damage a guaranteed constitutional right. (More information)


National minimum wage for 2007

Royal Decree 1632/2006 of 29 December, which establishes the national minimum wage for 2007. Spanish Official Gazette of 30 December 2006

This Royal Decree establishes the new national minimum wage that came into force on 1 January 2007. The new wage affects all fixed, part-time and temporary workers, as well as domestic staff.

The new amount represents a 5.5% increase on the same amount in force during 2006.

As a consequence, the minimum wage for any activity in the agriculture, industrial or service sector is now €19.02 per day or €570.60 per month; no distinction is drawn on the grounds of the employees’ sex or age.

This Royal Decree sets out the procedure to be followed to off-set and absorb the increase in the national minimum wage of workers whose annual salary already exceeds the national statutory minimum. In these cases neither the wage structure nor the amount of the wage will be altered. For these purposes, the annual minimum wage that will be used as a point of reference will be the result of adding any applicable pay supplements to the abovementioned monthly amount, and under no circumstances will it be less than €7,988.40.

On the other hand, temporary and occasional workers who render services to a single company for less than 120 days will receive the national minimum wage plus the proportional part of the salary for Sundays, public holidays and special bonuses so that they receive a minimum of €27.02 a day. The minimum wage of domestic staff is set at €4.47 an hour. As regards the paid holiday of these workers, they shall receive the proportional part corresponding to the legal minimum holiday entitlement that they are unable to enjoy owing to the limited duration of their contracts.

Finally, as regards the Collective Bargaining Agreements in force from 1 July 2004 to 2007, which use the national minimum wage as a reference to determine the basic salary or salary supplements of the workers to which they apply, the amounts used for 2007 will be those in force in 2006.

Social security. Development of contribution rules

Order TAS/31/2007 of 16 January, which develops the rules on contributions to Social Security, the guaranteed wages fund and for professional training that are included in Law 42/2006 of 28 December on the National Budget for 2007. Spanish Official Gazette, 19 January 2007

This Order establishes that the maximum Social Security contribution for 2007 will be €2,996.10 per month. The minimum contribution for work accidents and occupational illnesses is the national minimum wage plus the proportional part of the salary components received by the employee that accrue over a period of more than a month, which in total cannot be less than €665.70 per month. The contribution rate for general contingencies will be 28.3%, of which the company will pay 23.6% and the employee 4.7%.

Contributions for work accidents and professional illness will be made entirely by the company at the rates established in additional provision 4 of Law 42/2006.

Additional contributions for overtime worked for reasons of force majeure are to be made at 14%, 12% of which is to be paid by the company and 2% by the worker. Contributions for overtime that is not worked for reasons of force majeure are made at a rate of 28.3%, 23.6% of which will be paid by the company and 4.7% by the worker.

Contributions for unemployment will be made at the following rates:

-   permanent contracts: 7.3% (5.75% to be paid by the company and 1.55% by the worker);

-   for fixed-term full-time contracts: 8.3% (6.7% to be paid by the company and 1.6% by the worker;

-   for fixed-term part-time contracts: 9.3% (7.7% to be paid by the company and 1.6% by the worker).

The contribution rate for the Guaranteed Wage Fund is set at 0.2%, all of which is to be paid by the company.

The contribution rate for professional training is set at 0.7%, 0.6% of which is to be paid by the company and 0.1% by the employee.

This Order also establishes the contribution bases for sales representatives, artists and professional bull-fighters, as well as for the special agricultural regime, the special regime for self-employed workers, the special regime for domestic staff, the special regime for workers at sea and the special regime for the coal mining sector.

It also establishes the rules on contributions to be made in the case of back pay, payments for holiday that is not taken, back pay awards in judicial proceedings, part-time contracts and training contracts, among others.

Procedural formalities. Lexnet IT system. Filing of writs, documents, copies and notifications

Council of Ministers, 26 January 2007

The Council of Ministers has approved a Royal Decree setting out the general conditions and requirements for the use of the Lexnet system in court proceedings. The opinions of the General Council of the Legal Profession, the Association of Court Representatives (“Procuradores”), and the reports of the General Council of the Judiciary, the Council of Prosecutors, the Spanish Data Protection Agency and the Council of State were taken into account in the development of Lexnet.

The system simplifies the submission of written statements, documents, copies and procedural notifications to the courts. It can be used by court secretaries, civil servants, court representatives, lawyers, State lawyers, the Public Prosecutor’s Office and public bodies.

The Lexnet System is based on e-mail communications that guarantee the maximum level of security, authenticity, integrity, acceptance, and confidentiality of communications, and through the use of electronic signatures, confirmation of the time that the communication takes place.

It is intended that the use of this system will be extended progressively to the judicial offices of the Ministry of Justice and to those autonomous communities of Spain that have competences in the judicial field, which will be able to use Lexnet pursuant to the corresponding cooperation agreements.

Right to privacy. Installation of security cameras in workplaces

Judgment of the Labour Chamber of the High Court of Justice Castilla y León (Valladolid), 18 September 2006

This judgment concerns the installation of security cameras in a company. A company installed the cameras to ensure that its employees were fulfilling their obligations and to increase the security of the company’s installations and materials.

In this case, the court had to determine whether the measures adopted by the company could be classed as proportional given the rights in question: the company’s right to control the employees’ activity and their right not to be controlled in those aspects related to their right to privacy.

According to the Supreme Court (SC), for these fundamental rights to have full force and effect, they cannot be limited in any way in an employment relationship. In the same way, an employer must always bear in mind the constitutional rights and principles that are inherent to working relationships.

For its part, the Constitutional Court (CC) considers that the controls that an employer establishes pursuant to its right to control the activities of its employees will be lawful provided that they do not have unconstitutional consequences. For this to be the case, they must meet the requirements of suitability, necessity and proportionality.

On the basis of this case law and the justification offered by the company for the measures taken, the court holds in this judgment that the installation of cameras is not an aggressive measure that infringes the employees’ fundamental right to privacy, but rather one that is directly linked to the control of the employees’ activities and security in the installations. In addition, if it is taken into account that the cameras are positioned in passageways and work areas, that it is not possible to record sound, that it is not possible to zoom in or change the focus of the cameras, that the images will not be circulated, and finally that the system is not yet in operation, the company’s conduct cannot be considered as infringing article 20.3 or article 4.2.e) of the Statute of Workers (SW).

Unfair dismissal. Contract for specific works or services. The temporary nature of a contract for specific works or services cannot be justified by on the grounds of the duration of the related subsidized program

Judgment of the Labour Chamber of the Supreme Court, 10 November 2006.

In this case the claimant had been providing services to the company under a contract for the performance of specific works or services. This contract was in force from 2 May 2002 until 12 December 2003. After that date, the parties entered into another contract of the same type under a training program promoted by the regional government of La Rioja. The second contract entered into force on 1 January 2004 and was to terminate on 31 December 2004 (on 15 November 2004 the claimant was notified of the termination of a contract owing to the end of the works for which she had been contracted). 

The employee filed an unfair dismissal claim which was upheld at first instance but reversed on appeal.

This decision of the SC considers the validity of the contracts for the performance of specific works or services when the justification for them being temporary was their being linked to a training program of a limited duration. 

The SC cites the case law of its Labour Chamber, which until then had not held that the existence of a subsidy was a sufficiently decisive factor in itself to make a temporary contract valid. It goes on to state that the fact that the training program is annual does not necessarily mean that that work or service that it subsidises is temporary since the temporal specification refers solely to the subsidies and not the basic services that they finance. In doing so, the judgment interprets article 52.e) of SW, which states that the loss or insufficiency of funding, or some other element of plans and programs that do not have a stable financing system, is an objective ground on which an employment contract can be terminated. This interpretation holds that the funding of the program in itself is not sufficient to justify the temporality of an employment relationship entered into pursuant to such program.

The SC concludes by affirming that the contract for the performance of specific works or services is a contract of a specific but uncertain duration, and not a contract for a fixed term since it does not fulfil the functions of a temporary contract or those of an incidental contract as it does not meet an extraordinary need for the performance of work. Therefore, since the term established is not valid, the dismissal of the claimant must be considered unfair. 

Compulsory retirement. Collective bargaining agreement. Alleged infringement of articles 14, 24.1 and 35.1 of the Spanish Constitution

Judgment of the Constitutional Court no 341/2006 of 11 December

The appellant in this case alleged that his right to equal treatment and not to be discriminated against on the grounds of age (article 14 of the Spanish Constitution -Constitution-), and the right to protection from the courts (article 24.1 of the Constitution) in relation to the exercise of the right to work pursuant to article 35.1 of the Constitution had been infringed.

The appellant claimed that pursuant to the repeal of the tenth additional provision of the SW by Law 12/2001 of 19 July, the constitutionality of the doctrine and conventional clauses that impose compulsory retirement from a certain age must be reviewed.

The appellant considered that a decision taken by the company pursuant to article 20 of the collective bargaining agreement of the docker companies of Barcelona, was an unjust and unlawful breach of his constitutional right to equality; as well as age discrimination pursuant to article 35 of Constitution, although the latter is not recognized as a fundamental right.

In this regard, judgment number 341/2006 of the CC of 11 December highlights that according to case law, for unequal treatment resulting in compulsory retirement to be deemed justifiable, it must be the result of actions taken to achieve a constitutionally lawful aim. Thus a maximum working age would be constitutionally lawful provided that the aim of establishing the same forms part of broader employment policies. In addition, such measures must not cause disproportionate damage to a right that has been constitutionally guaranteed. In this regard, a maximum working age would only be valid if the employee has fulfilled the required contribution periods and all other requirements to be entitled to receive the corresponding pension.

In the same way, it could be argued that a justification exists for the compulsory retirement measure in the collective bargaining agreement (if considered as a business decision aimed at achieving an employment policy) that seeks to avoid age discrimination.

For this reason, the CC concludes that, although article 20 of the collective bargaining agreement in question states that general age for compulsory retirement is 65, without including a provision that explicitly relates this type of retirement with the employment policy, it is nonetheless clear that this means of terminating the working relationship does not lack the legitimate justification required from a constitutional point of view as it is based on an employment policy that seeks to redistribute work. 

In conclusion, the company’s decision does not breach article 14 of the Constitution as it does not constitute age discrimination but rather a consequence of the conventional application of compulsory retirement that should not be reproached from a constitutional point of view.


The information contained in this Newsletter is of a general nature and does not constitute legal advice