Employment - Legislative and case law developments

1. Reinstatement and annual leave: right to paid annual leave for the period between dismissal and reinstatement

The Court of Justice of the European Union has held that if a dismissal is declared null, the reinstated employee is entitled to paid annual leave for the period between their dismissal and reinstatement, even if they have already received financial compensation under national law. This is because that compensation is for unpaid salaries and not for the paid annual leave that the reinstated employee would otherwise have accrued.

2. Collective redundancies: companies without employee representatives do not need to consult each employee individually

The Court of Justice of the European Union has declared that Directive 98/50/EC on collective redundancies does not impose an obligation on an employer to individually consult its employees who are affected by a collective redundancy if those employees have not appointed an employee representative. Nor does it impose an obligation on the employees to make such an appointment if they have not been able to do so for reasons not attributable to them.

3. Fair dismissal and misappropriation of goods

The Spanish Supreme Court has held that the dismissal of a supermarket employee who took goods from the supermarket where she worked without paying for them was fair because the applicable bargaining agreement stipulated that the loss of trust in employees and their breach of good faith justifies a fair dismissal even when the stolen goods are of little importance or value.

4. Failure to pay instalments under an employee loan agreement justifies its termination

The Spanish Supreme Court has held that a bank could terminate loan agreements with a former employee and demand payment of the outstanding principal on the grounds that the former employee had failed to make many monthly repayments. The former employee had not shown any intention of trying to make the outstanding repayments or even trying to re-negotiate the refinancing of the loans, despite the bank making its best efforts to find a solution per its obligations under the collective bargaining agreement.

5. Dismissal based on objective grounds declared fair despite a newly hired employee assuming some of the functions of the dismissed employee

The Spanish Supreme Court has declared the dismissal of an employee on the same objective grounds as several other company employees who were dismissed at a later date, as fair. The Supreme Court reached this conclusion despite the fact that a newly hired employee had some of the same functions as the dismissed employee, as it did not consider that one employee had been substituted for another. Instead, it found that the decision was due to a reshuffling of staff by HR.

6. Remote working: interruptions beyond a worker’s control do not affect salary

The Spanish Supreme Court has held that the duration of any incidents during the working day that are beyond the control of remote workers and that prevent them from working, such as power cuts or internet connection problems, must be counted as working time. The same applies to breaks for physiological needs; they cannot be counted as rest periods or work breaks.

7. Contract terminations included in collective redundancy threshold calculations

The Spanish Supreme Court has held that any contracts terminated at an employer’s initiative, even if adopted by mutual agreement with the employees, must be included in the calculation of collective redundancy thresholds, provided that they take place in the context of an overall workforce reduction and during the corresponding 90-day period.