The (more than) necessary reform of the regulation of collective redundancy
All self-respecting lawyers must learn to interpret the legislators’ intention when passing a law. However, there is a thin line between the need for interpretation and the right to a clear regulation that provides legal certainty.
One of the most obvious cases is the regulation of collective redundancy which, due to the lack of legal definition, has had to be resolved by legal doctrine, not only with interpretative criteria, but also in order to fill authentic legal loopholes; for example and amongst others, the reference period for the calculation of thresholds, the unit considered for calculation purposes (group/company/work center), the types of termination, date considered, etc.
With respect to the period of reference to be used to determine whether or not the collective redundancy thresholds are exceeded, in its ruling dated April 23, 2012, the Supreme Court (SC) clarified for the first time that the “successive periods of 90 days” referred to in article 51 of the Workers’ Statute (WS), rather than being interpreted as the need to examine terminations over a total period of 180 days (either prior to the dismissal examined, the previous and subsequent 90 days, or all subsequent days – theories that have all been claimed by attorneys and Courts -), means that, with the exception of cases of fraud, for the purposes of determining whether or not collective redundancy has occurred, only the terminations produced during the period of 90 days before the dismissal examined should be considered.
In relation to the consideration of the unit at which the number of terminations has taken place, the Court of Justice of the European Union (ECJ) judgment of May 13, 2015 concluded that article 51 WS breached Directive 98/59/EC, of July 20, 1998, on the approximation of the laws of the Member States relating to collective redundancies, given that it states that the numerical threshold for collective redundancy must take into account the entire company and not the work center. This doctrine has already been applied by our Courts and led to the annulment, for example, of a collective redundancy that, although not exceeding the thresholds set forth in article 51 WS, did exceed those established by the Directive (amongst many others, the judgment by the High Court of Justice of the Basque Country of May 21, 2015).
As far as the type of termination that should be considered to determine whether or not collective redundancy thresholds have been exceeded, (i) in its judgment dated November 11 2015, the ECJ concluded that the termination of a contract at the request of a worker following a substantial modification of his/her working conditions must be included for the purposes of calculating whether or not the threshold for collective redundancy has been exceeded, such doctrine having been applied by the High Court of Justice of the Basque Country in a judgment dated January 26, 2016 (in spite of the abundant Spanish case law concluding that such terminations should not be included, as they were not at the initiative of the company); and (ii) although article 51 WS itself excludes terminations under article 49.1.c) WS, the SC Ruling dated July 9, 2013 stated that the employer must certify the legality of such terminations at trial, otherwise they will be included in the calculation to determine whether or not collective redundancy has taken place.
In addition, clarification is still pending as to when the staff of a company (or work center) should be calculated in order to determine whether or not there has been collective redundancy. According to Royal Decree 1483/2012, of October 29, 2012 passing the implementing regulations governing collective redundancy, contract suspension and reduced working hour procedures, the date to be considered should be when the (collective redundancy) proceedings are initiated. However, if what is being determined is whether or not there has been a concealed collective redundancy, what is the number of staff that should be calculated? Should it be the number that existed 90 days prior to the termination or the number of workers with a contract in force at the date the dismissal examined took place?
While waiting for the legislative reforms capable of clarifying all these issues, it will be necessary to consult professionals in order to obtain legal certainty, before undertaking a project as important as collective redundancy.
Departamento Laboral de Garrigues