Further pressure on Spain’s severance cost review: CC OO’s European claim recognized for processing

The maximum compensation for unfair dismissal in permanent contracts in Spain is 33 days of salary per year worked. This is the panoramic photo from 2012, when Mariano Rajoy’s populist government cut off the 45 days in force until then (which are reserved for the periods prior to the change). But in July 2021, there was an institutional movement that put the system in jeopardy: then Spain has fully ratified the European Social Charter. This legal provision, which goes beyond national regulations, introduces a change that allows judges to determine compensation beyond those 33 days, because it recognizes “the right of workers fired without good cause to adequate compensation or other appropriate compensation.” And that the period of work in a year, according to the judge, should not correspond to what he deems “appropriate” or “appropriate” in view of the damage caused. For this reason, CC OO filed a collective claim in November 2022 in which it denounced the failure to adapt Spanish regulations to the Charter. This Monday, the union announced that the European Committee of Social Rights had recognized its treatment.

Carlos Gutierrez, Secretary of Confederate Studies and Union Training for CC OO, believes the committee will agree with them: “Given reasonable uncertainty in any such process, our outlook is positive. Declarations and decisions made regarding other states expect a positive outcome.” It refers, among other things, to the July 2022 decision in which the Committee condemned France: agreed with the complainant’s union because the system of compensation for dismissal without just cause in this country “sets mandatory compensation brackets, depending on the seniority of the worker and the size of the company (eg Spain), considering that it conflicts with the right to protection in the event of employment termination, both in terms of adequate compensation in the event of unfair dismissal and the right to compulsory return”. The commission also ruled in favor of union claims in Italy or Finland.

The General Federation of Workers submitted its complaint against the government to the committee May 2022I confess Processed in October last year which is expected to be resolved by the end of 2023 or the beginning of 2024. The Confederation is aware that the Spanish labor regulations violate the legal principles of society with regard to dismissal, because in those cases where the end of the employment relationship occurs For reasons unrelated to the worker’s performance The compensation they receive does not compensate for the harm caused, nor is it a deterrent. This is particularly the case when the business relationship is short. “The Spanish regulatory system and its practical application is similar to that of other countries, with which the Commission has already declared its disapproval, because there is neither sufficient margin for judicial assessment of real damages (and their deterrent effect) nor an effective alternative route, referred to what is merely hypothetical and residual or accidental,” the UGTT noted in its claims against the Spanish CEO and those submitted by the Spanish government.

CC OO points out that he does not question the system evaluated, “but we want to supplement and strengthen it.” One aspect that the union insists on most is the “difficulty” in reinstatement: “In our legislation, the alternative remains to reinstatement in cases of unfair dismissal, which, together with the low amount of compensation, constitutes a total spectacle of impunity in the face of unlawful dismissal. In particular, reinstatement is not contemplated when dismissal turns out to be a fraudulent measure to achieve the expulsion of the worker from his work activity, as a way to prevent the exercise of the rights recognized in the Charter. The union also condemns that there is no limit. Minimum compensation, additional compensation related to the actual harm suffered, non-addressing wages or no compensation for fraudulent temporary employment.

Action advocates for change

The Second Vice President and Minister of Labor, Yolanda Diaz, commented on the matter in February in the House of Representatives: “Separation in our country is not expensive, it is very cheap. It is very cheap [a las empresas] It is convenient for them to fire with their 33-day severance pay. my word. We will abide by what the European Committee of Social Rights decides because it is the source of law in our country. I think we have to act.” The Secretary of State for Labour, Joaquín Pérez Rey, echoed the same message In conversation with EL PAÍS in April: “It is important to comply with our international obligations. And in the event that the commission decides that compensation in Spain must be sufficiently deterrent and compensatory for the damage already caused, this must be taken into account.

In other words, those responsible for the work expected their desire for the government to change the regulations on severance pay if the committee agreed with the unions, the commitment They were transferred to the electoral platform of Sumar. However, on the socialist side of the government, the Minister of Social Security, José Luis Escrivá, said in April that he was “very comfortable” with the system “in terms of the conditions it is in at the moment”. He noted that “you always have to find a balance between the different elements”, and that when designing severance payments, elements of employment incentives must also be “accommodated”. PSOE Electoral Program does not mention this issue. The new government is under no obligation to change the dismissal system if the commission agrees with the unions — France and Italy have not done so — but more judges are expected to recognize an increase in compensation based on a worker’s conditions.

This discussion has reached a new dimension yet A leading verdict delivered in Barcelona on January 30, which admitted 33 days of additional compensation to a worker who was laid off in March 2020, just before the pandemic hit — which prevented her from benefiting from ERTE (Regulation File Temporary Employment) — and just five months after she signed the contract. The company compensated her with €941.78, but the ruling increased that figure to €4,435.08 (or for the payment of unpaid wages from the date of dismissal). In addition to the European Social Charter, the provision refers to Article 10 of the Convention No. 158 of the International Labor Organizationwhich are expressed in terms similar to the European text.

Ana Gomez, president of the National Association of Workers of Spain (ASNALA), confirmed that no new rulings had been issued that recognized additional compensation. “After the Barcelona ruling, there was a lot of expectation in the face of similar new rulings, but I think the judges consider it the task of the legislator to determine how this new scenario will affect us,” notes this expert, who anticipates that in the world of labor justice, “grasps” that there will be reform when “the commission will most likely agree with the unions.” However, he believes that many of the agreed compensation (where dismissal disputes are usually resolved) is better thanks to the new argument that becomes the charter for lawyers defending workers. “Whatever the case is, it is important for reform to establish a clear system so as not to fall into legal ambiguity,” Gomez adds.

Expensive or cheap exchange?

Employers argue that compensation for unfair dismissal of 33 days in Spain is much higher than in other countries. According to World Bank dataSpain offsets terminations of workers with 10 years of seniority by about 28.6 weeks of salary, compared to 10.8 in France, 17.1 in Portugal, and 21.7 in Germany. The unions insist that this data, without context, is misleading, because in other countries it is easier to restore or salaries are fixed. Along these lines, the statistic often referred to by workers’ representatives is That toughness in the employment protections that the Organization for Economic Co-operation and Development publishes. This indicator takes into account various variables, such as time of notice, compensation or difficulties in executing dismissal. In this classification, Spain (2.43 points) is below the Czech Republic (highest data, 3.03), Portugal (2.87) or France (2.68), but higher than Germany (2.33) or the United Kingdom (1.9).

the last Data from the Ministry of Labor It indicates that in Spain there were 447,705 layoffs in 2021. The average compensation amounted to 11,416 euros, with significant differences by gender (12,238 for men and 10,327 for women), by type of contract (18,112 full-time permanent and 1,476 temporary with the same period), by age (3,593 from 25 to 34 years and 349 05 foreigners 1 over 55 years old) and 21,705 foreigners over 55 years old. “If layoffs were really expensive in Spain, there would be nearly half a million layoffs a year,” the professor concludes.

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