The Supreme Court declares a collective dismissal carried out prior to a business succession as null and void
In a judgment dated June 26, 2014, the Supreme Court declared the collective dismissal of employees of the Madrid Data Protection Agency (APDCM) as null and void, declaring the joint and several liability of the Madrid Regional Government for the consequences of the dismissal.
The collective dismissal began and took place during the passage through Parliament of a bill to eliminate the legal liability of the APDCM. The Court considered that the acts were intended to prevent the application of the guarantee of employment and working conditions set forth in article 44 of the Workers’ Statute regulating business successions, thus preventing APDCM staff from providing their services, with no guarantee of continuity, to the public body taking over the functions and business performed by the APDCM.
The Supreme Court therefore ruled abuse of law and, accordingly, declared the dismissal null and void, declaring the entities taking part as joint and severally liable.
The ruling contained a dissenting vote claiming that it was not an abuse of law, given that in administrative law, abuse of law has been linked to the misuse and arbitrary use of power. The vote therefore considered that, in the case at hand, the Regional Government of Madrid could not be deemed to have acted fraudulently by passing a law to cancel the legal personality of the APDCM, nor the APDCM, which only intended to cut costs and facilitate compliance with the legal mandate. The dissenting vote concluded by stating that if there was no abuse of law, the dismissal could be considered as unlawful, but not as null and void.
The judgment opens the door to further possible collective dismissal annulments, in light of the array of interpretations by the Courts since 2012 as a result of the so-called “labor reform”.
Garrigues Labor and Employment Department
