Employment - Legislative and case law developments

1. An employer must make reasonable adjustments to avoid terminating the contract of a permanently disabled employee

The Court of Justice of the European Union has declared article 49(1)(e) of the Spanish Statute of Workers contrary to EU law, as it allows the automatic termination of the employment contract of an employee if they are declared to be permanently disabled and therefore unable to carry out their usual work. Before resorting to termination the employer is required to make – or to at least attempt to make – reasonable adjustments to enable the employee to keep their job, as long as these are not excessively burdensome.

2. The ground on which an employment contract is terminated does not determine whether financial compensation is paid for untaken annual leave

The Court of Justice of the European Union has ruled that it is contrary to EU law to refuse (for public expenditure reasons) to compensate a public servant taking early retirement for their accrued but untaken days of annual leave. The entitlement to financial compensation cannot depend on whether or not the employment was terminated voluntarily, because this would limit a right expressly recognised  by EU law.

3. Continuing to pay the transport supplement after a remote working agreement has been signed does not count as a more beneficial condition

The Supreme Court has determined that paying a transport supplement for nine months following the signing of a remote working agreement does not constitute a more beneficial condition for the purposes of the “most favourable condition” principle under Spanish law (that employers may establish more favourable conditions than those under labour laws or collective bargaining agreements) and therefore, removing that supplement cannot be considered a substantial modification of working conditions but merely a correction of an administrative error.

4. An employee’s waiver of claims in a settlement agreement prior to dismissal proceedings does not affect any future claims against their former employer for transferring their personal data to a third party

The Supreme Court has ruled that a waiver of claims made in a settlement agreement prior to dismissal proceedings does not affect the actions that the worker may bring against another entity, in this case their former employer, for transferring their personal data in the context of a merger with their more recent employer. The fact that the transferred data was the grounds for the dismissal is irrelevant, since the settlement agreement must be interpreted strictly and limited to the dispute in question.

5. An employee does not need to reimburse their employer for sums paid under a post-contractual non-compete agreement when these were not compensation but rather part of their salary

The Supreme Court has affirmed that post-contractual non-compete agreement payments constituted salary (rather than compensation), which was stated to be the case in the wording of the agreement itself, as well as shown by the fact that the equivalent amounts were deducted from the salary for the relevant services. Therefore, despite having breached the agreement, the employee was not obliged to reimburse these payments.

6. When a trade union obtains legal standing during protracted collective bargaining, it has a right to take part in the negotiations

As an exception to the general rule that, for the purposes of collective bargaining, which trade unions are represented on the negotiating committee is determined on the date the negotiating committee is constituted, the Supreme Court has recognised the right of a trade union that gained its legal standing during the negotiations to have a place on the negotiating committee. Due to the protracted nature of the negotiations over the collective bargaining agreement, it was concluded that the representation of each trade union needed updating.

7. Paid leave must be calculated in working days in accordance with EU law

The National Court (Audiencia Nacional) has declared a collective bargaining agreement that calculated paid leave in calendar days null for contravening EU law. Although the Statute of Workers does not specify whether leave must be in working or calendar days, Directive 2019/1188/EC does stipulate that it must be in working days. As an exception, leave may be in calendar days when this results in an improvement on the minimum entitlement.