The economic contribution to the Public Treasury in collective layoffs at groups of companies
We have already discussed in this blog the legal uncertainty regarding the obligation on companies that carry out collective layoffs to make an economic contribution to the Public Treasury.
In the two years and four months since its introduction, the applicable legislation has been modified by lawmakers on at least five occasions and the current wording can be found here.
Today we refer to the latest change to this legislation, introduced by Royal Decree-Law 16/2013, of December 20, 2013, on measures to encourage stable hiring and improve the employability of workers.
In its article five, it clarifies that “group of companies” for the purposes of the above-mentioned economic contributions has the meaning established in article 42.1 of the Commercial Code, that is, a commercial group of companies.
It also specifies that in order to determine the result (i.e. profit/loss) for the year of the group of companies, account will only be taken of the result obtained in Spain by the companies in the group.
This last circumstance can have a positive effect for many companies.
In effect, this restriction (“account will only be taken”) will allow companies to avoid the requirement to make the contribution in cases, among others, such as:
- A company with more than one hundred workers performs a collective layoff affecting workers aged fifty or over, among others.
- The percentage of laid-off workers aged fifty or over with respect to the total number of workers laid off is higher than the percentage of workers aged fifty or over with respect to the total work force.
- The company does not record any profit (positive result) in its financial statements in the two years prior to the start of the collective layoff procedure, or for two consecutive financial years in the period between the financial year prior to the date of commencement of the procedure and the four financial years following that date.
- The company belongs to a group of companies.
- The group of companies records a profit (positive result) in its financial statements in the two years prior to the start of the collective layoff procedure.
- The result obtained in Spain by the companies in the group is negative in the two years prior to the start of the collective layoff procedure.
Without this last specification, as introduced by Royal Decree-Law 16/2013, of December 20, 2013, the company in question would be obliged to make the contribution.
However, this specification, while it remains positive for companies, has once again raised uncertainty from a legal standpoint: Does this specification apply to collective layoffs prior to the entry into force of Royal Decree-Law 16/2013, of December 20, 2013 (but after January 1, 2013)? What is understood by result obtained in Spain? Should the results of a Spanish company with a specific business abroad managed from Spain be excluded? Should the results obtained in Spain by a foreign company making up a group o companies be included?
Garrigues Labor and Employment Law Department