The Constitutional Court backs the labor reform
The Constitutional Court Judgment of July 16, 2014, ruling on the action for unconstitutionality brought by the Navarre Parliament against Law 3/2012, of July 6, 2012 on urgent measures to reform the labor market; in other words, against the labor reform, was published recently.
Specifically, the Constitutional Court looked at three of the most controversial aspects of the Law, namely: (i) the one-year trial period provided for in indefinite-term contracts to support entrepreneurs; (ii) the possibility of submitting to the National Consultative Commission on Collective Labor Agreements or to the equivalent regional bodies in the event no agreement is reached in a procedure to opt out of a collective labor agreement, and (iii) the priority application, in certain matters, of company collective labor agreements over industry collective labor agreements.
The judgment held these aspects to be valid, based fundamentally on the economic situation of Spain at the time of publication of the Law. In particular, the Constitutional Court concluded that the legislative measure is constitutional since it was “adopted in a context of severe economic crisis with a high rate of unemployment”.
Specifically, one of the most controversial points of the reform, the possibility of establishing a one-month trial period in contracts to support entrepreneurs, was justified with the objective of making hiring more attractive to companies and thereby bringing the dramatic joblessness number under some sort of control. The Constitutional Court stated that the conditions established by the lawmakers to grant access to this type of contract contributed to the successful outcome of the legislative measure; a measure, let us not forget, that will remain in force only while the unemployment rate remains above 15%.
However, despite the significance of the ruling, we will have to wait and see whether the legal battle against Law 3/2012, of July 6, 2012, will come to an end with this judgment, since various union organizations have stated their intention to continue their legal fight, even by taking it to the international courts.
Garrigues Labor and Employment Law Department