The presence of objective grounds in collective dismissals following the labor reform
In order to carry out collective dismissals, provided for in article 51 of the Workers’ Statute, the presence of an objective ground is required: whether economic, technical, organizational or production-related. Thus far, the labor reform contains nothing new.
What is new is the clarification of when one ground or another is deemed to exist. Compared to the pre-labor reform wording, it is now easier, certainly in literal terms, for a company to be subject to an economic ground. This is because, also in literal terms, the so-called reasonable connection between the motivating ground, regardless of its type, and the collective dismissal itself, has been removed from the text of the Statute.
Does this mean that the reasonable connection is no longer required? If a company evidences that it is in an adverse economic situation of the type defined in the current legislation governing collective dismissal, can the company, as a business manager, lawfully terminate the employment contracts it sees fit by means of collective dismissal?
Judging by what the lawmakers have said (or rather stipulated), the answer is a straight yes. Should there be any doubt, see Recital V of the preamble to Law 3/2012, of July 6, 2012, on Urgent Measures to Reform the Labor Market.
Nevertheless, this tangible limit on judicial control in collective dismissals may come up against some obstacles, at least from a conceptual standpoint, in cases of abuse of law or anti-social exercise of the law, not to mention the constitutional principles that must be followed by the courts in exercising their function.
In short, the above may help make sense of some judgments handed down in collective dismissal proceedings conducted after the labor reform which, when examining the substance of the case (the formal requirements merit a whole other post), declare that the dismissals are not in keeping with the law (read unjustified) because the alleged ground is not present…even where it has been evidenced that the company was subject to a situation currently defined in the legislation as an objective ground for collective dismissal.
For example: if it is construed that there is a less onerous alternative to the collective dismissal; if it is construed that the collective dismissal has a disproportionate scope with respect to the ground supporting it; or if it is construed that the collective dismissal will not help resolve the problem for which a solution is sought, etc.
In other words: with or without the labor reform, in collective dismissals, the thing is to be reasonable.