Employment Newsletter October

Legislation

1. Regulatory development of LGTBIQ+ Plans

Royal Decree 1026/2024, of 8 October, which develops the planned set of measures for equality and non-discrimination of LGTBIQ+ people in companies

This decree applies to all companies with more than 50 employees. One of the main updates with respect to the plans for the effective equality of men and women is that the negotiation of the measures will have to be agreed in different negotiation areas according to different parameters:

(a) Within the framework of the company's collective bargaining agreement, if any;

(b) In the absence of a company-level collective bargaining agreement, the measures are negotiated within the framework of the collective bargaining agreement at a higher level than the company (e.g. within the framework of the sectoral collective bargaining agreement);

(c) In those cases in which collective agreements, whatever their scope, have been approved prior to the entry into force of the Royal Decree, the respective negotiating committees must be convened to negotiate the measures exclusively;

(d) In those cases in which the company does not have a collective bargaining agreement, there are two different cases:

(i) If the company has legal employee representation, negotiation will take place through company agreements; and

(ii) If the company does not have legal representation of workers, negotiation will be articulated through company agreements reached by the negotiating committees created ad hoc. It will be constituted by company representation and worker representation made up of the most representative trade unions and the most representative trade unions in the sector to which the company belongs. In any case, each of the parties shall have a maximum of six members.

The negotiation process must start within three months from the entry into force of the decree (that is, no later than 9 January 2025), or six months in companies without legal worker representation (9 April 2025).

In case no agreement is reached, the specific measures set out in the decree will be applied until further measures are agreed which include, among others, equal treatment and non-discrimination clauses, clear criteria for access to employment and career advancement, and specific training on LGTBIQ+ rights for all staff.

Case law

1. The contractor's employees can claim the working conditions of the principal if they are under the power of direction and control of the contractor

Judgment of the Court of Justice of the European Union in Case C-441/23 of 24 October 2024

A case is analysed in which a female worker is employed by several contractors to provide services in a main company. During the worker's pregnancy, the main company informed the contractor that it would not renew the contract for the provision of services and this led the contractor to dismiss the worker. The worker challenges the dismissal by requesting to be null and void.

The Court of Justice of the European Union (‘CJEU’) concludes that Directive 2008/104/EC on temporary agency work applies to any undertaking which concludes contracts for temporary assignment to another companies, even if it does not have the status of a temporary employment agency, given that Directive 2008/104/EC itself does not require prior administrative authorisation to carry out that activity. Consequently, the CJEU determines that the essential working and employment conditions of the contract staff assigned to the main undertaking cannot be lower to those of the workers of the main undertaking.

2. It is contrary to European law to set a limitation period of five weeks for a pregnant worker to challenge her dismissal

Judgment of the Court of Justice of the European Union in Case C-284/23 of 27 June 2024

This case examines whether a time limit of three weeks and an additional two weeks (in the case of an untimely claim) under German law for bringing a claim for dismissal in the case of a pregnant worker hinders the exercise of the rights under Directive 92/85 EEC on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers. In this case, a female worker, after being dismissed, found out that she was pregnant at the time of the dismissal and brought an action out of time.

The CJEU concludes that the national legislation under which a worker who becomes aware of her pregnancy after her dismissal, has a period of two weeks for applying for admission of her untimely dismissal claim, is contrary to the Directive because these are particularly short time-limits which hinder the principle of effective judicial protection.

3. Nullity of the probationary period agreed in the contract "According to the collective bargaining agreement"

Judgment 1164/2024, of the Supreme Court, Social Chamber, of 24 September 2024

It is argued in the present proceedings whether a clause in the employment contract which states "a probationary period is established in accordance with the collective bargaining agreement", referring to the collective bargaining agreement but without fixing a specific duration, is valid.

The Social Chamber of the Supreme Court ("SC") concludes that the clause is invalid because the lack of a specific duration creates legal uncertainty for the employee. This means that the termination of the contract is classified as unfair dismissal.

4. Valid claim extension applying for the dismissal to be declared null and void

Judgment 1038/2024, of the Supreme Court, Social Chamber, of 10 September 2024

A female worker was dismissed on 17 February 2012, following an administrative authorisation for the termination of 227 employment contracts for objective reasons in the context of a collective dismissal procedure whose causes were validated by the National High Court. The dismissal was declared unfair at first instance and on appeal considered a substantial variation of the claim. The employee appealed, arguing that the dismissal should be declared null and void due to her recent maternity status, which was not alleged in the administrative conciliation or in the claim.

The SC declared the dismissal null and void, upholding the remaining rulings because (i) it ruled out that there had been a substantial modification of the claim, since the extension of the claim is admissible as long as it is made before the trial and the opposing party is notified (in accordance with article 85.2 of the LRJS); and (ii) it acknowledged that the company could have proposed evidence to fully exercise its right of defence.

5. Entitlement of staff with reduced working hours to receive 100% of the incentive for reduced absenteeism

Judgment 1028/2024 of the Supreme Court, Social Chamber, of 17 July 2024

It is examined whether the annual incentive for reduced absenteeism provided for in the company's collective bargaining agreement must be paid in full or proportionally to employees who take advantage of reduced working hours for the legal guardianship of children.

The SC dismissed the appeal for the unification of doctrine brought by the company, as article 37.6 ET only implies a proportional reduction in salary for those supplements that are linked to the working day, which is not the case of the incentive for absenteeism, which rewards attendance at work and compliance with the timetable. In addition, the SC adds a gender perspective and considers that the company's interpretation is a disadvantage for women who reduce their working hours to family life conciliation.

6. The fact that unfair competition is established in the contract as a cause for dismissal does not imply an automatic dismissal on that ground

Judgment 120/2024, of the National High Court, Social Chamber, of 7 October 2024

This case examines the validity of a clause in an employment contract stipulating that the fact of engaging in an activity constituting unfair competition is sufficient cause for dismissal. It is questioned whether such a clause would be valid, given that it could be understood that we are dealing with an automatic cause for dismissal without the need to prove disciplinary grounds.

The Labour Chamber of the National High Court ("NHC") concludes that the clause is valid because it does not imply automatic dismissal on that ground and does not relieve the employer of the burden of proving the facts constituting a disciplinary dismissal.

7. The 5 days of family care leave cannot be reduced if the person concerned needs to rest at home after discharge from hospital

Judgment 101/2024 of the National High Court, Labour Chamber, of 24 July 2024

A collective dispute is resolved on the right of workers to take five days' paid leave for hospitalisation or surgery of family members or relatives when they have been discharged from hospital but still need to rest at home.

The NHC declares the right of workers to take five days' leave under the terms provided for in article 37.3 b) of the ET and considers that home rest is related to the surgical intervention suffered by the family member and its purpose is for the patient to rest at home and for this rest to be effective it is necessary for the patient to be cared for by a third party. In addition, the NHC adds that a restrictive interpretation would be contrary to the principle of effective equality between women and men, as it perpetuates the gender employment gap and does not favour joint responsibility for family burdens.

8. Dismissal on the grounds of supervening unsuitability after the undertaking has attempted to make reasonable accommodation

Judgment 3718/2024 of the High Court of Justice of Catalonia, Social Chamber, of 28 June 2024

A press operator returning from temporary incapacity is classified by the external prevention service as "suitable with limitations" for his job (e.g., he could not handle loads of more than 12 kilos, nor could he handle repetitive finger gripper movements, nor forced postures, etc.). The company tried to relocate the worker to other jobs by creating an ad hoc job for the claimant and by inviting him to a refresher and training course for forklift operators. He is finally dismissed for supervening ineptitude.

The HCJ of Catalonia holds that the dismissal cannot be classified as null and void as it has been demonstrated that the worker has physical limitations that prevent him from carrying out the essential tasks of his job and the company has made reasonable adjustments before dismissing the worker. The fact that the total permanent incapacity benefit is not recognised does not condition this process.

9. No proof of cohabitation is required for the 5 days' leave to care for a family member in need of care when there is no family relationship

Judgment 3159/2024 of the High Court of Justice of Galicia, Social Chamber, of 27 June 2024

A company informed its employees that in order to take 5 days' leave, they would have to prove, in any case, (i) that they live in the same household with the sick or injured person (whether or not a relative), and (ii) that the person requesting the leave requires effective care.

The HCJ of Galicia ruled on the correct interpretation of the provision in question and differentiated that: (i) in the event that there is a family relationship (conjugal, blood or affinity), the mere existence of this relationship confers the right to five days of leave; and (ii) cohabitation and the need for care must only be accredited if the worker is not linked to the sick or injured person by any of these ties, as the subjective scope of this leave has been extended.

10. Entitlement to supplementary severance pay calculated on the basis of severance pay in previous employment and unemployment benefits

Judgment of the Social Court no. 42 of Madrid, 19 July 2024, Proc. 1134/2023

A company dismisses an employee for poor performance and recognises the unfairness of the dismissal, paying him compensation of 1,512.50 euros. The worker sued for additional compensation in the amount of 28,206 euros.

The judgment concludes that the legal compensation to which she is entitled is meagre and recognises her right to a supplementary compensation of € 8,603 based on: (i) the compensation for unfair dismissal that she would have received considering the length of service accumulated in her previous job (deducting what she had already received in compensation); and (ii) the amount that she would have received as unemployment until she found a new job (since if she had not left her previous job voluntarily, her unemployment benefit would have been higher).

To keep an eye

1. Entry into force on 1 January 2025 of the solidarity quota

On 1 January 2025, this new quota will come into force. Its purpose is to tax workers with higher salaries and their companies, as it will be applied to those salaries that exceed the maximum contribution base (4,720.50 euros per month / 56,646 euros per year) that the Government establishes annually through the General State Budget (Presupuestos Generales del Estado) in order to support pensions.

The new solidarity quota will be applied progressively until 2045 and will be applied in three tranches: (i) 5.5% taxed up to 10% of the excess of the maximum contribution base; (ii) 6% taxed on the excess of the maximum contribution base between 10% and 50%; and (iii) 7% taxed on the excess of the maximum contribution base above 50%. The distribution of this increase between the company and the worker will be 83.4% for the company and 16.6% for the worker.

By 2025, it will start with a contribution rate of 0.92% in the first tranche, 1% in the second tranche and 1.17% in the third tranche.

This means that the maximum contribution base is not capped, as companies and employees are not going to contribute based on the maximum contribution base. As an example, using the current contribution base, the Social Security contribution would be as follows:

2. The Administrative Chamber of the Supreme Court recognises the right of single-parent families to double maternity leave

The Administrative Chamber of the Supreme Court has recognised the extension of a public employee's maternity leave from 16 to 26 weeks (excluding the 6 weeks of compulsory leave) in order to avoid discrimination against the newborn child. The Chamber defends that the type of family cannot imply a difference in treatment and may be discriminatory. This pronouncement is relevant because it may lead the Social Chamber to rule in the same sense for workers who are not subject to the Basic Statute of the Public Employee.

3. New risk prevention obligations for domestic workers

On 11 September 2024, Royal Decree 893/2024, of 10 September, regulating health and safety protection in the family home, was published. Employers are obliged to (i) carry out a specific risk assessment; (ii) adopt preventive measures; (iii) provide work equipment and individual protection; (iv) provide information on specific risks; (v) organise preventive activities; and (vi) monitor health.

These obligations shall not become due until six months after a free risk assessment tool of the National Social Security Institute has been made available.