Employment Update, Spain – February 2009

19 February 2009

Alberto Gilarranz

Case law

Dismissal based on illness is not discriminatory

Background

The Constitutional Court concluded that the fairness of dismissals on the grounds of illness is decided by analysing the specific circumstances.  Dismissals on the grounds of illness will not, however, be null and void as illness cannot be considered grounds for discrimination.

Facts

In the current case, the employee concealed from the company his previous state of illness, which prevented him from working in the construction sector. His dismissal was declared unfair by the Labour Court.  The High Court upheld the judgment against the employee’s claim in which he requested the nullity of the dismissal as it breached the right of equality. Additionally, he believed it was discriminatory on the grounds of disability (equality and discrimination have been established in Spain as two distinct principles). 

Effect on employers

Traditionally, employees on sick leave were not dismissed since there was a risk that the termination could be declared discriminatory, on the ground of health. In view of this recent case, sick employees can be dismissed under the same terms as the rest of workforce.

Judgment of the Constitutional Court of 26 May 2008

 

Unaware of an employee’s pregnancy? Dismissal could be null and void

Background

The Constitutional Court has increased pregnant workers’ protection. This judgment stated that by virtue of the scope and guarantees provided by the Statute of Workers (regarding gender equality, specifically in pregnancy situations), the employer is not required to be aware of a worker’s pregnancy in order for a determination of a null and void wrongful dismissal.

In light of the above, unless an employer can prove the fairness of the termination, the simple confirmation of pregnancy and the fact that the dismissal was not declared fair are enough reason for it to be declared automatically null and void.

Facts

The controversy arises because at the moment of the dismissal the employer was unaware of the employee’s pregnancy.  The employee defended; (a) her right to hide her state on the grounds of privacy; and (b) that [statute] [the relevant regulation] does not oblige the employee to disclose it.

Effect on employers

Employers must be extremely careful when carrying out dismissal procedures in which there is a possibility that an affected employee is pregnant. Furthermore, companies must be very careful if they request information from an employee, for example, whether they are pregnant, as it could breach the employee’s right to privacy.

Judgment of the Constitutional Court of 21 July 2008

 

Transfer of undertakings without transfer of assets: Simple transfer of staff

Background

The Supreme Court jurisprudence has traditionally declared that to consider an effective transfer of undertakings, in addition to the transfer of staff, it is necessary for a real transfer of assets to be executed. Regarding the issue of the transfer of staff, the Chamber has [specified the] European case law, in the sense that it must be “effective, peaceful and real”, and not a unilateral decision made by the employer.

Facts

A hospital outsourced their cleaning requirements and all staff assigned to the cleaning service transferred to the service company, without transfer of assets. The employees filed a claim before the Labour Court alleging that this assignment could not be considered a transfer of undertakings.   In the current case the vast majority of the hospital’s employees challenged the transfer of undertaking, on the basis that it was not in accordance with the doctrine mentioned above as it could not be considered “peaceful”.

Effect on employers

Despite the doctrine of the European Court of Justice that a transfer of undertakings can take place if the whole staff is transferred, if a company is considering a possible transfer of undertakings it should bear in mind the restrictive criteria held by the Spanish Supreme Court.  For the successful achievement of this transaction it is advisable that those assets assigned to the business are also transferred and included within the scope of the transaction in order to shape the business transferred as a real independent production unit.

Judgment of the Labour Chamber of the Supreme Court of 29 May 2008.

 

Individual dismissal for objective reasons based on economic reasons:  Appropriateness of the redundancy

Background

The Supreme Court analysed the requirements which allow companies to execute redundancies based on economic reasons, the so-called objective dismissals. This ruling rejected the appeal judgment, ratified its jurisprudence and declared that in this kind of situation, when the company proves serious economic losses, it shall be entitled to eliminate specific work positions due to economic reasons.

Facts

In this case, the Company justified the dismissals in order to reduce staff expenses, due to the serious economic losses suffered in the last years. The Labour Court declared these dismissals unfair and in addition to proving the economic losses, the Company were also required to demonstrate that the dismissals helped to stave off the crisis situation.  The Company therefore had the burden of proof as to whether the measures which had been adopted were reasonable to overcome the economic difficulties. The High Court of Justice upheld the ruling of the Labour Court.

Effect on employers

Current adverse economic environment can justify redundancies to the extent that financial statements reflect economic losses but an employer must also demonstrate that the dismissals will relieve the financial crisis.

Judgment of the Labour Chamber of the Supreme Court of 11 June 2008