A worker’s length of service at a company
Although when we think about a worker’s length of service at his or her company, we usually think of a specific start date or a number of years worked, the truth is that the same worker may have different lengths of service, depending on the right in question and the circumstances of his or her work life at the company.
This post confines itself to examining the concept of length of service regarding the right to financial promotion and to the receipt of severance pay following the termination of an employment contract in cases—quite common in practice—in which there has been a chain of employment contracts with more or less significant interruptions in between, although this analysis could extend to other matters such as, among others, the always contentious mechanism of partial retirement.
That said, when it comes to financial promotion and notwithstanding some isolated court rulings, one must look to the wording of the clause (individual contract, collective labor agreement, etc.) that regulates the compensation linked to the length of service, which is usually equivalent to the computation of the different periods in which the worker has provided services to the company, thereby excluding any periods during which there was no contractual relationship.
However, for severance purposes (excluding severance for the valid end of temporary contracts), one must apply the judicial doctrine of the essential unity of the contractual relationship, an example of which would be the recently published judgment of the Labor Chamber of the Supreme Court on February 26, 2016. This doctrine, which is settled but constantly evolving, requires an analysis in each case of the entire contractual chain to determine which one of the employment contracts entered into marks the start of the length of service. The circumstances to be borne in mind for this purpose include the number of contracts entered into, the length of the interruptions between them, the position held, the provision of services to third parties, etc. The formula for determining length of service for severance purposes is therefore inexact, with the attendant uncertainty that this generates for the parties, as well as the risk for all employers where the employment contract is terminated on objective grounds where a mistake in the setting of the length of service and, therefore, most likely in the severance made available to the worker, may lead to the dismissal being classified as unjustified, notwithstanding certain defenses that can be asserted, not always successfully, such as that of the rectifiable nature of the mistake.
In conclusion, the length of service of a worker at a company should be analyzed on a case-by-case basis, always bearing in mind the specific right of the worker that is at stake.
Garrigues Labor and Employment Department