Employment Spain Newsletter May
New Legislation
1. Royal Decree-law 2/2024, of 21 May, which supplements the transposition of Directive (UE) 2019/1158 of the European Parliament and the Council of 20 June 2019, on work-life balance for parents and carers
This Royal Decree-law 2/2024, published on 22 May 2024, covers a number of relevant issues:
- Breastfeeding leave: all workers shall enjoy this leave on a cumulatively basis, with no need for it to be foreseen in the collective bargaining agreement nor agreed with the company. Hence, greater flexibility is granted in terms of its use and workers may exercise it automatically as of 23 May 2024; and
- Prevalence of the autonomic collective bargaining agreements over the state bargaining agreements: in any case, the priority of application of the state bargaining agreement will remain in matter such as the probatory period, contracting modalities, professional classification, the maximum annual workdays, the disciplinary regime, the minimum regulations in labour risk prevention matters and geographic mobility.
These are the same legislative changes that were attempted to be approved through the Royal Decree-law 7/2023 19 December, which was not ratified by the House of Commons (Congreso de los Diputados). Thus, although in force, they are once again pending to be ratified by the House of Commons (Congreso de los Diputados).
2. Directive (UE) 2024/1233 of the European Parliament and the Council of 24 April 2024 on a single application procedure for a single permit for third-country nationals to reside and work in the territory of a Member State
This Directive states the following: (i) a single application procedure leading to a unique title encompassing both residence and work permits for third-country nationals in the territory of a Member State within a single administrative act and (ii) a common set of rights for third-country workers legally residing in a Member State.
This Directive aims to simplify and harmonise the procedures for their admission and to facilitate the control of their status and guarantee equal treatment with nationals of that Member State.
It becomes effective on 20 May 2024 and grants a term of two years (this means, until 21 May 2026) for its transposition.
Court Precedents
1. Definitive registration of a "provisional" equality plan unilaterally adopted by the company in the absence of a response from the trade unions
Judgement 545/2024, of the Labour Chamber of the Supreme Court of 11 April 2024
The registration of an Equality Plan unilaterally adopted by the company, after having requested the most representative trade unions, on several occasions, to set up the negotiating committee and not having received a response for more than a year, is admitted.
The company attempts to register the unilaterally prepared equality plan and the Labour Directorate (Dirección de Trabajo) dismisses the registration due to the absence of a negotiating committee and lack of negotiation.
The Labour Chamber of the Supreme Court (the "SC") concludes that the plan must be registered and reiterates its doctrine which exceptionally admits the validity of a provisional equality plan that does not comply with the legal requirements (specially, when it has not been agreed because of circumstances such as a negotiating deadlock attributable to the other party or the refusal to negotiate or the absence of representative bodies).
2. Incompatibility of the severe disability economic benefit with the performance of a remunerated activity (doctrine change)
Judgement 544/2024, of the Labour Chamber of the Supreme Court of 11 April 2024
The compatibility of the severe disability economic benefit with the performance of a full-time work in a specific job (in this case, work at the ONCE) is denied on the grounds that the literal interpretation of Article 198.2 of the General Social Security Act refers to activities which are of an accessory, marginal, occasional or limited nature and which do not give rise to its inclusion in the Social Security system.
Additionally, to justify this doctrine change it is stated that if there is no income loss because the incapacitating situation does not make it impossible to work, entitlement to the benefit does not arise (because there is no specific need for protection).
3. The company's refusal to recognise a validly constituted trade union section implies the violation of the right to freedom of association and the payment of compensation for non-pecuniary damage
Judgement 534/2024, of the Labour Chamber of the Supreme Court of 9 April 2024
An appeal to the SC is decided to determine whether the company's refusal to recognise the constitution of a trade union section by a trade union which does not have a presence on the Works Council (and, consequently, the appointment of the trade union delegate): (i) constitutes an infringement of the fundamental right to protection of trade union freedom and (ii) whether that infringement gives rise to a right to compensation for a moral damage.
The SC clarifies that the trade union section is an internal organisational body of the trade union itself and forms part of the essential content of trade union freedom and may be represented by delegates who serve as a link between the section and the company. Consequently, it declared that the right had been infringed and ordered the company to pay compensation of 3,000 euros for moral damages.
4. Notification to the legal representation of the objective dismissal after the effective date is allowed provided that it is made within a reasonable period of time
Judgement 522/2024 of the Labour Chamber of the Supreme Court of 3 April 2024
In this case, it is clarified whether the communication to the workers' legal representatives is valid if it takes place after the dismissal or whether, on the contrary, the communication requirement of article 52 d) of the Statute of Workers ("SW") must be interpreted in a rigorous manner and must take place before or at the same time as the dismissal.
The SC upheld the cassation appeal in unification of doctrine and, applying its doctrine, clarified that the communication may be made subsequently, provided that it is made within a reasonable period of time that does not frustrate the legal representatives in exercising the rights derived from the information provided. In this case, communication within a period of five working days after the dismissal is understood not to prejudice the rights of the representatives or of the worker himself.
5. The absorption and compensation of transport bonuses by the increase in the minimum interprofessional wage is not possible when it is of an extra-salary nature
Judgement 495/2024 of the Labour Chamber of the Supreme Court of 20 March 2024
The appeal lies in determining, in accordance with the applicable collective bargaining agreement, whether the transport allowance constitutes a wage concept capable of absorption and compensation or whether on the contrary, it is a non-wage item which cannot be absorbed or compensated by increases in the minimum interprofessional wage (MIW).
The SC points out that in general, this supplement is of an extra-salary nature, however, when it corresponds to a real salary in return for the work performed, its classification as a salary is accepted. It is essential to determine the actual reality of this remuneration, as there is no room for absorption and compensation in respect of items that cannot be absorbed due to their nature, such as non-wage supplements.
6. Entitlement to the full amount of the currency loss allowance irrespective of the working hours
Judgement 500/2024 of the Labour Chamber of the Supreme Court of 20 March 2024
A collective dispute claim is resolved regarding the right of workers who carry out payment and collection functions and who provide their services under a reduced working day to receive the non-wage concept of ‘currency loss’ in its full amount, without a reduction according to the actual working day carried out. The company has been applying a reduction proportional to the working time.
The SC reinforces that the payment of the concept of ‘currency loss’ is intended to compensate for the risks arising from the handling of currency, regardless of the time of exposure to the risk in terms of working time. It is a non-wage concept and is identified as true compensation, indivisible in nature, and must therefore be paid in its full amount regardless of the actual working time worked.
7. Right to severance pay additionally to the statutory severance pay for unfair dismissal when the severance pay is very low and the employee left his previous position to work for one year with the new employer
Judgement of the Labour Chamber of the High Court of Justice of the Autonomous Community of the Basque Country of 23 April 2024
The employee, after voluntarily resigning from his previous job, enters into an interim contract for a vacancy that was intended to last for one year, which is terminated after one month due to an error regarding the duration of the contract. However, after one month, he is unfairly dismissed.
The Labour Chamber of the High Court of Justice ("HCJ") of the Basque Country, after analysing the existing case law on supplementary compensation, states that judges and courts are not obliged to accept the decision of the European Committee of Social Rights. However, in this case, it considers that the legally assessed compensation (which amounted to 493.49 euros) is insufficient to repair the damage suffered by the employee. The HCJ of the Basque Country recognises an additional compensation to that legally assessed, quantified in the wages lost by the worker (30,000 euros) in view of his expectation of being employed for at least one year.
8. The initiation of harassment proceedings is essential in order to reduce penalties for companies. The mere mocking of a worker is not considered a sort of harassment tolerated by the company and therefore a violation of fundamental rights
Judgement 240/2024 of the Labour Chamber of the High Court of Justice of Madrid of 6 March 2024
A case of discrimination on the grounds of racial origin was analysed in which the employee sought recognition of a violation of fundamental rights and compensation for moral damage amounting to 18,000 euros (among other claims for damages). The employee alleged that a colleague had made fun of her physical appearance and the company, after activating the harassment protocol, concluded that there was insufficient evidence to affirm that there had been harassment at work and sanctioned the employee with a suspension of employment and salary.
The employee appealed and the HCJ of Madrid concluded that from the proven facts it was not considered that harassment had been accredited and added that the company had acted diligently in initiating the informative file, its investigation and the adoption of the different measures, within a prudent period of time, according to the accredited conduct.
9. Company fined for violating the right to digital disconnection by sending mails outside normal working hours
Judgement 1158/2024 of the Labour Chamber of the High Court of Justice of Madrid of 4 March 2024
In this ruling, the right to digital disconnection was recognised and the company was condemned to pay compensation of EUR 7,551 for violating the right to privacy by transferring his personal data. It is proven in the case that the company sent the worker emails outside working hours and that he received emails and Whatsapp messages from a training academy and from Quirón Prevención, without his express consent to transfer his data to third parties.
The HCJ of Madrid declared that the right to digital disconnection and data protection had been violated because the employee's consent had not been obtained and set a total compensation amount of 1,000 euros, disaggregated as follows: (i) 300 euros for non-pecuniary damage (taking into account the small number of emails) and (ii) 700 euros for the violation of data protection because the plaintiff's express consent to transfer his data to third parties was not on record. The relevance of the judgment lies in the fact that it points out that the right to digital disconnection is linked not only to the employee's right not to respond to communications from the employer or third parties but also to the employer's duty to refrain from contacting the employee.
Keep an eye
1. Approval by the Council of Ministers the derogation of the dismissal in the event of a declaration of permanent disability
On 21 May 2024, the Council of Ministers approved the modification of article 49.1.e) of the SW which allows the termination of the employment contract when the worker is declared to be permanently totally, absolutely or severely disabled. This modification derives from the ruling of the High Court of Justice of the European Union of 18 January 2024, which requires employers to make the necessary adjustments and adaptations to the job before terminating the contract.
In addition, this regulation also establishes criteria for determining the costs that these necessary adjustments will entail for the company. For the time being, the content of the approved text has not been published.
2. Labour inspectorate campaigns: probation period and time recording
The Labour Inspectorate (LI), has anounced a campaign:
- To detect irregularities regarding the use of trial periods: the LI aims to extract from the anti-fraud tool: (i) the exceeding of the trial periods established in the SW; (ii) to detect those workers who have previously provided services under a contract with the same functions and have already been subjected to a trial period; and (iii) the termination of contracts within the trial periods as an alternative to the (very legally restricted) use of temporary contracts; and
- Regarding time recording: it intends to increase fines in order to deter non-compliance and is exploring digital tools to have direct access to the working time records of each worker.
3. 5,000 sanction by the Data Protection Agency against a company that dismissed an employee and informed clients that he was no longer providing services due to professional malpractice
The Spanish Data Protection Agency (the ‘SDPA’) penalises this business practice by concluding that the principle of data minimisation has been infringed by communicating to the former employee's clients the reason for the termination of the employment relationship. In essence, the SDPA considers it unnecessary to communicate the reasons for the end of the employment relationship as it points out that ‘the causes of the termination of the employment relationship between employee and employer is a private matter that only concerns both parties and not third parties’.
4. Social Security Agreement between Spain and United States
A new text of the Social Security agreement between Spain and the United States has been signed. It has not yet been published in the Official State Gazette and, therefore, has not yet entered into force, but it highlights that the period of posting of employees of Spanish companies to the United States remains in 5 years, extendable for another two years.
5. The Taxation General Directorate clarifies that compensation for infringement of fundamental rights is exempt from taxation if the amount is judicially fixed
By binding consultation V0283-24 of 4 March 2024, the Taxation General Directorate clarified that compensation for infringement of fundamental rights is exempt from taxation if the amount is judicially determined in accordance with Article 7.d) of Law 35/2006 of 28 November on Personal Income Tax.
Therefore, for the amount to be exempt, it is necessary: (i) that it is a civil liability compensation for personal injury (this concept includes physical, psychological or moral damage) and (ii) that the amount is judicially fixed. It is clarified that the expression ‘judicially recognised amount’ includes both cases of quantification fixed by a judge or court and those intermediate formulas in which there is a voluntary approximation in the positions of the parties in conflict, provided that there is judicial intervention.
