In the past two months a range of relevant legislation developments in the field of labour have occurred, including the approval of the Spanish Strategy of Employment Activation for 2014-2016. Furthermore, there have been several interesting judgements in the social jurisdiction which deserve brief analysis.

Relevant legislation

Royal Decree 751/2014 of 5 September, which approves the Spanish Strategy of Employment Activation for 2014-2016

Under this regulation, the Spanish Strategy of Employment Activation for 2014-2016 is approved with the aim of promoting proactive employment policies, and sets out he guiding principles and objectives of this Strategy, distinguishing between strategic or priority objectives and structural objectives.

The strategic or priority objectives include the following: improving the employability of young people; enhancing the employability of other specially protected groups affected by unemployment (the long term unemployed, people over 55 years old and beneficiaries of PREPARA[1]); improving the quality of Professional Training for employment; strengthening the links between active and passive policies of employment; and promoting entrepreneurship.

The structural objectives of the Strategy are grouped into six categories of activation policies which were drawn up together with the Autonomous Communities. The categories are:

1.orientation;
2.training;
3.employment opportunities;
4.equal opportunities in access to employment;
5.entrepreneurship; and
6.improvement of the institutional National Employment System.

Through a system of indicators, at the end of each year, achievement of the proposed objectives will be measured and depending on the grades earned by the Autonomous Communities, financial funds devoted to the Employment Activation policies will be distributed according to the grades earned by the Autonomous Communities.

The regulation came into force on 24 September 2014, and its regulatory development is envisaged.

Annual Plan of Employment Policy for 2014

On 24 September 2014, the Official Gazette of the Secretary of State for Employment published the Resolution of 16 September 2014, which approved the Annual Plan of Employment Policy for 2014, as established in article 4 ter of Employment Law 56/2003, of 16 December.

The Annual Plan of Employment Policy 2014 is created as an instrument for the evaluation of the employment measures carried out by the Autonomous Communities and the Public Employment Service and establishes the objectives to be reached this year in Spain in each of the different Autonomous Communities. The Plan also establishes the indicators which will be used to decide the grades earned for achieving such objectives.

Relevant Case law

Judgement of the National Court, Social Chamber, of 17 September 2014, which recognizes the employees’ right to have the variable concepts accrued in their ordinary working day included in their holidays’ payment

In the case at hand, the National Court, following the judgement of the European Union Court of Justice of 22 May 2014 which reflects the provisions of Directive 2003/1998/EC, and contrary to the position maintained to date by Spanish case law, ruled that while the remunerated annual holidays last, the employee’s remuneration should be maintained. In this sense, the exclusion of variable remunerations accrued during the ordinary working day goes against the provisions of the aforementioned Directive 200371998/EC. In this case, the Court examined the article of a collective bargaining agreement applicable to a company which sets out that annual holidays will be paid to employees on the basis of items established in a particular annex of the aforementioned collective bargaining agreement. It had been evidenced that the company complied with the stipulations of the above mentioned article including the items indicated in such article for the calculation of holidays’ remuneration. However such items did not include the variable remunerations accrued during the ordinary working day (those related to night hours, public holiday hours, Sunday hours, splitting of working hours and overtime or part-time hours). Given that situation, the Court ruled against the company, noting that such exclusion goes against the ruling of the aforementioned Directive and acknowledging the right of employees to receive in their annual holidays the average of the aforementioned remunerations.

Judgement of the European Union Court of Justice (ECJ), Fourth Chamber, of 11 September 2014, which analyses the application of a denounced collective bargaining agreement in a transfer of undertaking scenario

In the case at hand the transferor company, which was the parent company of the transferee company, agreed to transfer its aviation activity to the transferee company by transferring an activity centre. The transferee company had been applying a collective bargaining agreement in worst work conditions than those of the transferor company. The collective bargaining agreements of both companies were denounced the day before the transfer. As a consequence of the denouncement of these collective bargaining agreements, the transferee company applied unilateral internal rules which adversely affected working conditions and also a reduction in the wages of the transferee employees. The union alleged that the transferee company did not have an applicable collective bargaining agreement of its own to the extent that it had been denounced. The Superior Austrian Court asked the European Union Court of Justice for a preliminary ruling related to determining whether or not the effects of a denounced collective bargaining agreement should be kept. The ECJ stated in its judgement that a denounced collective bargaining agreement continues to be in force while no other signed agreement is in place; therefore it should be applicable to the employees transferring to the transferee company (subsidiary).

Judgement of the National Court, Social Chamber, of 9 July 2014, which renders legal the collective dismissal carried out by a company despite the accounts of a company in the group not having been provided and despite the company having delivered an alternative proposal during the second half of the consultation period

In the case at hand the Court analysed two controversial elements in the process. The first of these was the lack of delivery of the accounts of a group company in the documentation provided to the employees’ representatives at the beginning of the consultation period although these accounts were contained in the documentation of the administrative file. In its judgement the Court stated that the existence of the group and the share capital structure of the group and its results were not hidden but expressly mentioned in the explanatory memorandum delivered as an annex (expressly referred to) and pointed out that the employees’ representatives at no time requested the delivery of such documentation. Therefore, the Court stated that as the information was expressly contained in the explanatory memorandum, if the employees’ representatives considered that such documentation was crucial for the negotiation, they should have requested it. Since they had not done so, the failure to provide the documentation did not nullify the collective dismissal since it had not affected the negotiations. The second of the controversial issues that the Court analysed was the alleged lack of good faith during the consultation period on the basis that the company did not formulate a viability plan at an early stage and it had maintained the decision to close the work centre and dismiss all of the workforce during the course of the consultation period. The Court stated that if there are effective offers and counter-offers during the negotiation and reasons are given as to why such offers and counter-offers are accepted or not, the negotiations would be in good faith even though the consultation period was not successful. The Judgement stated that in the case at hand the company requested the insolvency proceeding during the consultation period and delivered an alternative to the closure; it also explains that, although it is true that the viability plan should have been provided at the beginning of the consultation period, that proposal would have been rejected after analysis by all the employees’ representatives who did not need more time than that available and therefore the late submission did not affect the negotiation and cannot be considered a reason to nullify the dismissal.

Judgement of the National Court, Social Chamber, of 13 June 2014, which renders null a collective procedure of suspension of contracts because the consultation period was negotiated with a negotiation committee which did not represent all affected employees

In this procedure the Court declared the nullity of the suspension because it had been proven that the defendant company, which had three work centres located at Zamora, Orense and Valladolid, only two of which (Zamora and Orense) had union delegates, carried out and negotiated the consultation period with only those two centres, without having served notice on Valladolid’s employees in order to communicate the beginning of the consultation period to them. Those employees could not, therefore, choose an ad hoc commission or give its representation to the union delegates of the other work centres. For that reason, the process of the consultation period did not follow the rules established for this purpose. Furthermore, the Court also held that the company did not negotiate in good faith during the consultation period since the company promoted an insolvency procedure which activated its liquidation only a few days after the conclusion of the consultation period and this entailed the termination of all employment contracts, stating that “it is unthinkable that a company doomed to its liquidation might deal with its economic problems through a suspension of employment contracts only a few days earlier”.

Judgement of the Supreme Court, Social Chamber, of 10 June 2014 which dismisses a revision claim filed by an employee and establishes the circumstances needed in order that judgements ruled in the criminal proceeding may act as a reason for revising a labour judgement

In the case at hand, the claimant, who had been dismissed and whose dismissal was rendered according to law in the social jurisdiction, requested revision of the final judgment that confirmed the fairness of her dismissal since there was a criminal proceeding against her due to facts related to those which entailed her dismissal and the ruling of the criminal proceeding absolving her could not be appealed. However, the Supreme Court stated that such judgement cannot open a revision in the social jurisdiction since the circumstances needed in order for the judgement in the criminal proceeding to act as a reason for revising the labour judgement are that the absolving criminal judgement takes place due to the absence of fact or the lack of participation of the subject in the process and this is not what happened in the case at hand. In such case the absolution in the criminal proceeding is due to the fact that the presumption of innocence of the employee was not distorted and furthermore the Supreme Court stated that the reason for the dismissal of the employee was not the commission of a criminal offence but the negligent conduct of the employee at work.

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[1] Professional requalification programme for people who have exhausted their relevant unemployment benefits (PREPARA) - Aids established in the Royal Decree-Law 1/2011 of 11 February.