Employment - Legislative and case law developments

1. Directive 98/59/EC on collective redundancies also applies when redundancies are caused by the employer’s retirement

The Court of Justice of the European Union has held that the Spanish law provisions that establish that the collective redundancy procedure does not apply when employment contracts are terminated owing to an employer’s retirement are contrary to Directive 98/59/EC. The court has clarified that when the number of terminations exceeds the statutory thresholds, even if the cause of the dismissals is due to an employer’s retirement, the employee representatives must be consulted and the competent public authority duly notified.

2. Discontinuing an employee transport service is an unreasonable and disproportionate substantial modification of working conditions

The Supreme Court has declared that an employer’s decision to discontinue its employee transport service, which took staff to their respective workplaces, was an unjustified substantial modification of their working conditions. The court considered that the employer had failed to prove that the savings from eliminating this service reasonably justified such a drastic modification and the consequent effect it would have on the workers who relied on the service to get to and from their places of work.

3. Discontinuous and continuous workers who perform duties of equal value should receive equal pay

The Supreme Court has declared that a company’s discontinuous workers have the right to receive the same supplementary allowance under the same conditions as the company’s continuous workers, since it determined that they perform the same functions. Given that the company was unable to  prove the contrary, the Supreme Court concluded that there was no objective justification for a pay difference aside from the fact that one group of workers had full-time contracts and the other had part-time contracts.

4. Requiring a generic justification of working time used to carry out trade union work does not infringe the right to freedom of association

The Supreme Court has ruled that a company’s requirement that employee representatives provide a generic justification of how they used their time assigned for union work does not infringe their right to freedom of association. The court also declared lawful the company’s decision not to pay for hours of work that were not justified, provided this did not in any way impede employee representatives from using this assigned time or imply the adoption of punitive measures.

5. Employer can retract its notice of dismissal

The High Court of Justice of Castille-Leon has held that an employer could retract its decision to terminate one of its employee’s employment contracts during the dismissal notice period, given that the employee had continued to provide their services during this period and the contract remained in force. The court declared that an employer’s retraction is valid if the dismissal has not yet taken effect.

6. Disciplinary dismissal of an employee who threatened to publish confidential company information is justified

The High Court of Justice of Madrid has ruled that dismissing an employee on disciplinary grounds for threatening his employer while he was being investigated for harassing a colleague was fair. The employee informed his employer that he would send clients confidential information that he had collected and stored on his personal computer if the employer failed to negotiate his exit and pay him compensation for an unfair dismissal. The court considered this a clear breach of contractual good faith.