Employment Spain Newsletter April
Legislation
1. Order PJC/281/2024, of 27 March, amending Order PJC/51/2024, of 29 January, developing the legal rules on social security contributions, unemployment, protection against cessation of activity, the Wage Guarantee Fund and professional training for financial year 2024
This Order amends Order PJC/51/2024, of 29 January, as a result of the approval of the Minimum Interprofessional Wage ("MIW") pursuant to Royal Decree 145/2024, of 6 February.
It updates the minimum Social Security contribution base with effect from 1 January 2024 in each of its schemes in accordance with the MIW approved for 2024, which is set at 1,323 euros per month or 44.10 euros per day for the general system.
2. Royal Decree 322/2024, of 26 March, amending the General Regulations on Social Security Collection and the General Regulations on Contributions and Settlement of other Social Security Rights
This amendment introduces the application of the additional solidarity contribution, which implies the obligation to pay additional contributions for those workers with a salary higher than the maximum contribution base (currently set at 4,720.50 euros gross per month).
From 1 January 2025, an additional rate (progressively increasing to 7% in 2045) will be applied to the amount exceeding the maximum contribution base. By 2025, the rate will range from 0.92% to 1.17% (depending on the amount exceeding the maximum contribution base).
Court Precedents
1. The practice of allowing holidays beyond the calendar year is a more beneficial condition
Judgement 465/2024 of the Labour Chamber of the Supreme Court of 13 March 2024
The company offered the possibility of taking the current holiday (including the first week of the following year) and added the possibility of carrying over a maximum of 5 days from one year to the next, to be taken during the first quarter of the year. In October 2020, the company decided to unilaterally modify the holiday regulations, removing the first week of the following year as the general holiday period for the current year.
The Labour Chamber of the Supreme Court ("SC") dismissed the appeal filed by the company, arguing that the company's practice consisting in the fact that, over the years, in a constant and repeated manner over time, the holiday entitlement regime allowed for holidays to be taken outside of the calendar year is considered a more beneficial condition. Therefore, it cannot be unilaterally removed by the company, outside the procedure for substantial modification of working conditions (article 41 of the Workers' Statute, "WS").
2. Compensation and absorption of overload, night work and benefit pay supplements with the increase of the minimum interprofessional wage
Judgement 446/2024 of the Labour Chamber of the Supreme Court of 7 March 2024
It is questioned whether it is appropriate to apply the compensation and absorption with the minimum interprofessional wage of transport, overload, night and benefit pay supplements, in accordance with the provisions of the collective bargaining agreement.
The SC, restating its doctrine, concludes that: (i) the compensation and absorption of the supplements for overload, night work and benefits pay applies according to article 26.5 of the WS, which applies when the salaries actually paid, as a whole and on an annual basis, are more favourable for the workers than those set in the reference regulatory or conventional order and the applicable collective agreement does not prevent it; and (ii) with regard to the transport bonus, it points out that its extra-salary nature prevents it from being compensated and absorbed, regardless of whether it is treated and considered as salary by the company.
3. Failure to establish targets does not automatically lead to entitlement to the bonus if its accrual requires a good financial situation
Judgement 415/2024 of the Labour Chamber of the Supreme Court of 5 March 2024
The SC ruled on whether the absence of targets set by the company for the accrual of the bonus entails the automatic entitlement right of the bonus for the beneficiaries when the other conditions required by the sectoral collective agreement regulating variable remuneration based on targets are not met.
The SC points out that although there are precedents that recognise the right to receive the bonus when the company fails to set targets, in the present case, this right is conditional on the company's financial and budgetary balance. Therefore, in the face of an unfavourable economic situation, it is not possible for the right to receive the bonus to arise.
4. Time recording system may not deprive the snack break (in accordance with company practice) and the registering made within 15 minutes of the start of the working day (in accordance with collective agreement) from being considered as working time
Judgement 410/2024 of the Labour Chamber of the Supreme Court of 5 March 2024
This judgment questions whether the company's application of the time register undermines the workers' rights to a snack break and to the possibility of starting the working day within 15 minutes from the start of the working day, as set out in a collective agreement agreed by the company and the workers. The SC concludes that:
(i) If the company had been considering the snack break as actual working time, either because there was no obligation to record breakfast as an absence or because it provided for a 20 minute margin, the introduction of time recording cannot alter the pre-existing situation.
(ii) Marking carried out within 15 minutes of the starting time is considered to have taken place at the beginning of the working day and therefore also counts as effective working time.
Therefore, it concludes that the employer cannot use the implementation of a working time register to introduce changes in working conditions or to avoid the recognition of rights agreed with the workers, and therefore the procedure set out in article 41 of the WS must be used for its implementation.
5. Nullity of collective dismissal for exceeding the thresholds in a workplace with more than 20 workers (application of the "Rabal Cañas" doctrine)
Judgement 284/2024 of the Labour Chamber of the Supreme Court of 14 February 2024
It is debated whether the dismissal of the plaintiff may be null and void on the ground that the thresholds for collective dismissal provided for in Article 51.1 WS have been exceeded in a case of subrogation of employment contracts.
The SC holds that, in accordance with its case law, the unit of reference for determining whether or not the threshold between collective dismissal and individual objective dismissal is exceeded must be
(i) the workplace employing more than 20 employees, in cases where the redundancies occurring in the workplace considered by itself exceeds such thresholds, or
(ii) the company when the thresholds are exceeded by taking the whole company as the computation unit.
In this case, the contracting company has a workforce of 730 workers and the dismissal of 28 of them would not reach the threshold of 30 provided for in art. 51.1 WS. However, taking the workplace as the unit of reference, the dismissal of 29 workers from a work centre that employs more than 20 workers does constitute a collective dismissal, so the SC therefore declared the dismissal null and void.
6. Negotiation of collective redundancy with the entire workforce and without an ad hoc committee: the failure to provide documentation when communicating the intention to carry out a collective redundancy does not imply that the redundancy is null and void
Judgement 296/2024 of the Labour Chamber of the Supreme Court of 14 February 2024
Individual dismissal claim is resolved, in the context of a collective dismissal without agreement and negotiated by the workers jointly, in view of their refusal to appoint an ad hoc committee. The company summoned the employees to appoint representatives to negotiate the entire workforce dismissal and they refused to form an "ad hoc" committee. On the same day, negotiations with the entire workforce began and the company handed over the documentation concerning the causes of the dismissal at the next meeting.
The dismissal is alleged to be null and void or unlawful due to defects during the consultation period consisting of (i) the failure to deliver the documentation at the start of the consultation period; and (ii) the communication to the labour authority after issuing the dismissal letters.
The SC held that the employees rejected the setting up of such a negotiating committee and, therefore, the company could not be obliged to comply with the legal requirements that the employees themselves did not wish to assume. The SC concludes that on the day on which the company communicated its intention to carry out the dismissal and requested the representative committee to be set up, it was not obliged to submit any documentation.
7. It is discriminatory to reduce the amount of variable remuneration on the grounds of sick leave, illness or medical rest
Judgement 18/2024 of the Labour Chamber of the National High Court of 13 February 2024
A lawsuit was filed seeking the nullity of the clauses of a company's incentive plan, which eliminated or reduced the incentive of employees for having been in a situation of temporary incapacity, indisposition or medical rest, which are considered to be non-recoverable absences. The incentive plan foresaw that an absence of more than 8% prevented the employee from obtaining an incentive.
The Labour Chamber of the National High Court ("NHC") declared this type of clause null and void as it is considered discriminatory because it deals with situations linked to an unfavourable health situation for the worker, beyond his or her control, and from which a clear penalisation can be inferred.
8. It is not a requirement for promotion to pass a medical examination agreed by the health and safety committee and not compulsory by law or by the collective agreement
Judgement 16/2024 of the Labour Chamber of the National High Court of 12 February 2024
Collective dispute claim concerning the inclusion of a medical aptitude table in the terms and conditions of a call for internal promotion to fill permanent positions. The NHC concludes that those medical examinations are invalid because:
(i) the employer must respect the promotion system established in collective bargaining (which does not require a medical examination to pass an internal promotion process);
(ii) require the consent of the worker (unless provided for by law or deemed necessary to assess the effects of working conditions on the health of workers or to verify whether their state of health may constitute a danger to the worker, to other workers or to other persons connected with the company) and
(iii) the medical examinations carried out by the health and safety committee are intended to protect the health of workers but in no case can be a limit to their internal promotion.
9. The submission to the court of documentary evidence on paper is rejected after the entry into force of Royal Decree Law 6/2023 of 19 December
Judgement 14/2024 of the Labour Chamber of the National High Court of 5 February 2024
The NHC resolves a procedural dispute concerning the presentation of documentary evidence before the courts with the publication of Royal Decree 6/2023 of 19 December, approving urgent measures for the implementation of the Recovery, Transformation and Resilience Plan for the public service of justice, the civil service, local government and patronage (the "RD 6/2023").
The documentary evidence submitted in paper format is rejected as it was not submitted in due time and form in electronic format on the grounds that:
(i) the RD 6/2023 states in its article 41.1 the duty of the parties or interveners to "submit all types of documents and proceedings for inclusion in the electronic court file in electronic form";
(ii) the requirement in article 6.3 for legal practitioners to use electronic means;
(iii) the rule entered into force 20 days after its publication (i.e. on 9 January) and was therefore in force at the time of the trial on 31 January 2024; and
(iv) the writ of summons required the submission of documentary evidence 10 days in advance of the trial in electronic format.
10. Increase of the legal compensation for unfair dismissal for not being "adequate" according to art 24 of the European Social Charter and the ILO Convention 158: possibility to recognise an additional compensation of 15 days of salary per year with a ceiling of 1 year's salary (according to article 281.2.b) of the LRJS)
Judgement 774/2024 of the Labour Chamber of the High Court of Justice of Catalonia of 13 February 2024
The judgement is interesting because the Social Division of the High Court of Justice of Catalonia sets out its criteria with regard to the quantification of compensation in addition to that legally established and recognises the possibility of applying a judgement of conventionality, giving precedence to the international norm over the national norm. All of this by virtue of the European Social Charter and ILO Convention 158, provided that there are exceptional circumstances and these are evidenced by the worker.
The court points out that although it is up to the court to determine whether the conduct is worthy of an increase in compensation, criteria must be established so that it is not applied in a disparate or discretionary manner. He concludes that, although it will be necessary to wait for the legislator to adapt the dismissal severance payment in exceptional cases, a provisional and acceptable solution would be to apply, by analogy, the rule contained in article 281.2.b) of the Social Jurisdiction Law when there is no readmission or an irregular readmission. For these purposes, an additional compensation of 15 days' salary per year of service with a maximum of 12 monthly payments can be imposed when certain circumstances concur.
Keep an eye
1. Conclusions of the European Committee of Social Rights on children, family and migrants. Possible impact on the statutory severance payment for unfair dismissal
These conclusions are pronounced on the right of female workers to maternity protection and the right of workers with family responsibilities to equal opportunities and treatment from the perspective of dismissal. It concludes that the Spanish legal system is contrary to the European Social Charter because, although the general rule is the reinstatement of the worker, in those cases in which this is not possible, it is not permitted to grant adequate compensation and reparation beyond the limits that take into account all the circumstances to compensate for the damage suffered.
These conclusions are revealing as they anticipate the content of the conclusions of the European Committee of Social Rights concerning the complaint filed by UGT and CCOO regarding the amount of severance pay, which has already been ruled on but for the moment we do not know its content. This resolution (concerning the UGT resolution) will not be made public until the Council of Ministers adopts a resolution or recommendation on the matter, or, in any case, until four months after it has been transmitted to the Council of Ministers.
2. Repeal of the automatic dismissal for permanent incapacity
The Minister of Labour and Social Economy and the President of the Spanish Committee of Representatives of People with Disabilities (CERMI) have signed an agreement for the protection against automatic dismissal of people with permanent disability in which they agree to repeal the recognition of permanent disability of a worker as a cause for automatic termination of the employment relationship.
This agreement follows the publication of the judgment of the Court of Justice of the European Union of 18 January 2024 in case C-631/2022, which could lead to a possible reform of the WS.
