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LEGISLATIVE DEVELOPMENTS

 

 

NEW JURISPRUDENTIAL DEVELOPMENTS

 


 

LEGISLATIVE DEVELOPMENTS

CROSS-BORDER TELEWORKING. – Cross-border employed teleworkers who work in two or more States and who work less than 50% of their working time in the State of residence may maintain their social security contributions in the State in which the employer has its head office or domicile.

(Agreement on the application of Article 16(1) of Regulation (EC) No. 883/2004 in cases of regular cross-border teleworking)

On July 1, 2023, the Framework Agreement on the implementation of Article 16.1 of Regulation (EC) No. 883/2004 entered into force, with the following States having acceded to it to date: Germany, Switzerland, Liechtenstein, Czech Republic, Austria, Netherlands, Slovakia, Belgium, Luxembourg, Finland, Norway, Portugal, Sweden, Poland, Croatia, Malta, France and Spain.

The objective of the Framework Agreement is to mitigate the effect of cross-border telework on applicable social security legislation in the short term.

Under the aforementioned Agreement, the social security contributions of employed teleworkers who habitually work in two or more States and who reside in one of the countries signatories to the Agreement, may be maintained in the State signatory to the Agreement in which the employer has its headquarters or domicile, provided that the cross-border telework performed in the State of residence is less than 50% of the total working time.

 

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MAINTENANCE OF THE CONTRIBUTION TO THE SS IN SPAIN IN CASES OF DISPLACEMENTS TO FOREIGN COUNTRIES – Situation assimilated to that of registration of the employees displaced to foreign countries by companies with activity in Spain.

(Order ISM/835/2023, of July 20, which regulates the situation assimilated to that of registration in the Social Security system of employees posted abroad in the service of companies that carry out their activities in Spanish territory).

On July 22, 2008, Order ISM/835/2023, of July 20, 2008, came into force, regulating the Social Security coverage applicable to displaced employees who provide services for companies that operate in national territory and are sent to another country in order to perform salaried work on behalf of such companies.

The purpose of the regulation is to avoid that trips abroad do not materialize because they are not duly provided with the appropriate legal certainty as regards the possibility of maintaining Social Security contributions in Spain.

Thus, the aforementioned Order will be applicable in the following cases:

    • Posting of employees to a country where no international instrument on the coordination of social security systems is applicable or where, although an international instrument is applicable, such persons are not included within its subjective scope of application.

In these two cases, the displaced employees will be considered in a situation assimilated to that of being registered in the general social security regime in which they were included, for the purposes of entitlement to certain benefits, with the obligation to pay contributions continuing, both on the part of the company and of the displaced employees, while they remain in the country of destination and the employment relationship with the company is maintained.

    • Posting of employees to a country where an international instrument on this matter is applicable, but they have exhausted the maximum period of posting provided therein (including possible extensions), or, although an international instrument on the coordination of social security systems is applicable, it does not provide for the posting of employees by their companies to the territory of the other party.

In these cases, the employees may continue to be voluntarily subject to Spanish legislation once the maximum period of posting provided for in the respective international instrument has expired, including any extensions which, if applicable, would have been authorized, if provided for in said instrument.

The duration of the situations assimilated to those of registration referred to will be extended exclusively during the period of displacement that originates in the contracting formalized in Spain.

 

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CONTRIBUTION PERIODS FOR PART-TIME CONTRACTS. – Equalization of part-time work with full-time work for the purpose of calculating the contribution periods for the recognition of certain pensions.

(Royal Decree-Law 2/2023, of March 16, on urgent measures to increase pensioners’ rights, reduce the gender gap and establish a new framework for the sustainability of the public pension system).

On October 1, 2023, the amendment to Article 247 of the General Social Security Law came into force, by means of which “part-time work is equated with full-time work for the purpose of calculating the periods contributed for the recognition of retirement, permanent disability, death and survival, temporary disability, birth and childcare pensions“.

Thus, each working day of a employee with a part-time contract counts as one day of full-time work for the purpose of calculating the contribution periods for the recognition of the aforementioned social security benefits.

This legislative amendment is motivated by the Resolution of the Court of Justice of the European Union, dated May 8, 2019 (ratified by the Constitutional Court in its Rulings of July 3, 2019, and September 13, 2021), which declared unconstitutional, null and discriminatory the method of calculation of the contribution periods with a part-time contract that had been considered by the Social Security for the calculation of certain benefits.

It is true that the aforementioned Doctrine of the Constitutional Court has been applied by the Social Security since its promulgation, however, it was not until the pension reform of 2023 that the text of the General Social Security Law was updated.

 

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SIX MONTHS’ NOTICE IN THE EVENT OF CLOSURE. -Obligation to notify the competent labor authority and the Ministry of Labor and Social Economy of the definitive closure of one or more work centers, when this entails the definitive cessation of the activity and the dismissal of 50 or more employees, at least 6 months prior to the notification of the opening of the consultation period.

(Royal Decree 608/2023, of July 11, developing the RED Mechanism for Employment Flexibility and Stabilization).

Royal Decree 608/2023, of July 11, has amended the Regulation of the procedures for collective dismissal and suspension of contracts and reduction of working hours (Royal Decree 1483/2012, of October 29), attributing to companies that intend to proceed with the closure of one or more work centers, when this entails the definitive cessation of the activity and the dismissal of fifty or more employees, the obligation to notify this circumstance to the competent labor authority and to the Ministry of Labor and Social Economy, through the General Directorate of Labor, at least six months prior to the communication of the opening of the consultation period to the legal representatives of the employees.

In addition to the above, companies must send a copy of the aforementioned notification to the most representative trade union organizations and to those representing the sector to which the company belongs, both at the national level and at the level of the autonomous community where the work center or work centers to be closed are located.

 

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SOCIAL SECURITY REBATES. – New rebates on Social Security contributions.

(Royal Decree-Law 1/2023, of January 10, on urgent measures regarding incentives for labor hiring and improvement of the social protection of artists).

Last September 2023, the new labor hiring incentives came into effect.

The most noteworthy aspects are the following:

    • Hiring incentives focus on indefinite-term contracts with priority attention groups, as well as on the transformation of certain temporary contracts into indefinite-term contracts.

    • The requirements for beneficiary companies are simplified and homogenized. For example, for contracts financed through bonuses, it is established that the employer must maintain the employee hired in a situation of registration, or assimilated to registration, with the Social Security for at least three years from the beginning of the incentivized contract.

    • Aspects related to the amounts of the rebates on social security contributions are unified.

 

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NEW JURISPRUDENTIAL DEVELOPMENTS

RECORDING OF THE WORKING DAY. – The mere concession of flexibility when taking breaks during the working day to smoke, have coffee, have breakfast, eat, etc., does not prevent the employer from implementing a workday registration system that includes the registration of such breaks, denying their consideration as effective working time.

 (Ruling of the Social Division of the Supreme Court, dated February 22, 2023 (No. 161/2023)).

    • Issue 

It is being clarified whether the implementation of a system for recording the beginning and end of coffee, smoking, breakfast or lunch breaks used by employees constitutes a substantial modification of working conditions, considering that the time dedicated to such breaks does not constitute effective working time, in those cases in which, prior to the implementation of such record of working hours, the employer had granted its employees wide time flexibility when taking this type of breaks, without there being any time control of such breaks.

    • Legal basis

The Ruling states that the mere hourly flexibility granted by the company when taking breaks for smoking, coffee, breakfast or lunch, does not prove that the time dedicated to such breaks was considered effective working time by the employer, so that the implementation of a time recording system that includes the recording of the time dedicated to such breaks by the employees, without considering it effective working time, does not constitute a substantial modification of working conditions.

    • Conclusion 

The High Court concludes that the flexible working hours granted by the employer so that employees can take breaks during their working day does not imply that the employer considers the time dedicated to such breaks as effective working time, so that the implementation of a time registration system that does not consider it as such does not constitute a substantial modification of working conditions and, therefore, the referred business conduct does not deserve any reproach from a labor law point of view in this regard.

 

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OBJECTIVE DISMISSAL. – The delivery of a copy of the letter of objective dismissal to the legal representatives of the employees may be made after the notification of the termination notice to the employee.

(Judgment of the Supreme Court, Social Division, of July 5, 2023 (No. 484/2023))

    • Issue

The question that arises refers to the moment of compliance with the requirement of communication of the termination decision to the legal representatives of the employees in cases of objective dismissal implemented under the causes provided for in Article 52.c) of the Employees’ Statute. Specifically, the issue is whether such communication must be prior to or simultaneous with the notification to the dismissed employee, or, on the contrary, may be made after such notification.

    • Legal basis 

The legal debate lies in the obligation established in Article 53.1.c) of the Employees’ Statute, which states that “in the case contemplated in Article 52.c), a copy of the written notice shall be given to the legal representatives of the employees for their knowledge“.

Well, the Supreme Court recalls that, as the scientific doctrine has pointed out, this requirement of information to the legal representation of the employees does not really refer to the mere advance notice, but to the delivery of a copy of the termination notice.

Likewise, the High Court emphasizes that the purpose of this obligation is none other than to allow the employees’ representatives to know the situation of the company, in order to ensure the correct use of the objective dismissal procedure, as well as to enable them to exercise the rights related to the information provided, among which the possibility of advising the employee on the causes and circumstances of the dismissal in question cannot be ignored.

    • Conclusion

The delivery of a copy of the notice of objective dismissal implemented under Article 52.c) ET to the legal representatives of the employees can be made after the delivery of the communication of the letter of dismissal to the affected employee (in the case examined, said copy is delivered to the RLT four days after its delivery to the employee), provided that it is made within a reasonable period of time that neither frustrates the purposes of the aforementioned legal requirement, nor prevents the addressees, that is, the legal representatives of the employees from exercising the rights linked to the information provided.

 

 

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BUSINESS SUCCESSION – In the context of a business succession, the claim for wages accrued for services rendered in the outgoing company is subject to a one-year statute of limitations period that begins to run from the date of accrual of the wage debts in question, and not to the three-year statute of limitations period following the succession.

 (Judgment of the Supreme Court, Social Division, of September 12, 2023 (No. 544/2023))

    • Issue 

The question that arises is whether the action for claiming the amount formalized against the transferor company and the transferee companies is time-barred once the period of one year has elapsed from the date of accrual of the salary debts claimed, but not the period of three years after the succession.  

    • Legal basis

The Supreme Court reminds us that a distinction must be made between Articles 44.3 ET and 59.1 ET, which are at issue in the specific case:

    • Article 44.3 ET establishes that the transferor and the transferee shall be jointly and severally liable for three years for labor obligations arising prior to the transfer.

This is a limitation period that begins to run from the date of the business succession.

    • Article 59.1 ET establishes that the actions derived from the employment contract that do not have a special term will be subject to the statute of limitations one year after its termination. This is a statute of limitations period that begins to run from the date of accrual of the salary debts.

The Supreme Court refers that the joint and several liability that Article 44.3 ET provides for the acquirer (for the debts prior to its business condition) can only be demanded during the three years following the succession, provided that the corresponding action is still “alive” because its decay has been interrupted by any of the means that the law admits.

    • Conclusion

The Judgment states that the expiration period of three years after the succession of the company does not establish a singular statute of limitations period, and consequently, the annual statute of limitations period of Article 59.1 ET must be applied to all debts incurred by the outgoing company with respect to its former employees.

 

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DISCRIMINATORY DISMISSAL BY ASSOCIATION. – The termination of the contract of a female employee who requested six days’ leave for personal matters in order to accompany her pregnant spouse to a prenatal test, is declared null and void as it is understood to have been carried out in violation of the employee’s right to equality on the basis of sex, due to discrimination by association or reflection.

 (Judgment of the Superior Court of Justice of Catalonia, Social Division, of May 3, 2023 (no. 2763/2023))

    • Issue

It is questioned whether the termination of the temporary contract six days after the female employee requested a day of personal leave to accompany her pregnant spouse to a prenatal test must be understood to have been carried out in violation of the right to equality on the basis of sex attributable to the female employee.

    • Legal basis

The judgment states that the aforementioned contractual termination violates the right to equality on the basis of sex based on the following arguments:

    • The accreditation of the indicative scenario of violation of fundamental rights. To this effect, it considers particularly significant the temporal connection between the request of the day of leave for personal matters by the employee to accompany her spouse to take a prenatal test, and the date of the termination notice, circumstances that mediated only six days.

    • The absence of a valid termination of the temporary contract signed. In the case analyzed, it is concluded that the temporary employment contract does not meet the legal requirements for this type of contract, since the termination did not even take place on the termination date provided for in the contract itself.

    • The affectation of the right to equality on the basis of sex due to discrimination by association or reflex. The Court considers that the employee was given unfavorable treatment because of her relationship -in this case, marital- with the person in whom the protected personal condition, which is pregnancy, concurred.

 

    • Conclusion

The High Court concludes that, not having disproved the circumstantial evidence that the employee was dismissed due to his wife’s pregnancy, the termination of the employment contract was carried out in violation of the employee’s right to equality on the basis of sex, as it understands that there was discrimination by association or reflex discrimination.

 

 

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The employer cannot force the employee who teleworks to recover the working time during which he could not telework due to power cuts or network outages beyond his control, nor do such incidents entitle him to reduce his salary, provided that such consequences are not applicable to employees who provide their labor activity in person.

(Judgment of the Supreme Court, Social Division, of September 19, 2023 (No. 565/2023))

    • Issue

It is questioned whether in the case of incidents occurring within the working day provided in teleworking due to disconnections that prevent the provision of work, because they are essential for the same, such as cuts in the power supply or internet connection, unrelated to the employees, the company may require the employee to recover the working time affected by such incidents or reduce their salary on the occasion of the same.

    • Legal basis

The Judgment understands that, based on the equality of treatment, if in the face-to-face work the power or network supply cuts that may occur in the work center of the company, do not entail that such face-to-face employees must recover the working time affected by such incidents and their salary is not reduced on the occasion of such incidents, neither can such labor consequences be attributed to the employees who provide services under the modality of teleworking.

    • Conclusion

It is not possible to grant a different treatment to the employees who develop their labor activity under the modality of the telework with respect to those who do it in in-person in those cases in which incidents such as cuts of light or of connection to Internet happen during the working day, preventing from the labor activity; so that, since it is not demandable to the employees who provide services in person at the offices of the company to recover the working time affected by this type of incidents, nor entail a reduction of their salary, the same treatment is deserving of the staff who develop their work activity in teleworking regime.

 

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REINSTATEMENT ON A PART-TIME BASIS AFTER UNPAID LEAVE OF ABSENCE. The reinstatement on a part-time basis of an employee on voluntary leave, whose working day prior to the leave was full-time, does not constitute an automatic novation of her part-time employment contract if the employee expressly states that her reinstatement on a part-time basis does not imply a waiver of her reinstatement to a full-time working day.

 (Judgment of the Supreme Court, Social Division, of May 24, 2023 (No. 376/2023)) 

    • Issue

The question arises as to whether the reincorporation of a employee on voluntary leave of absence to a part-time position, whose working day prior to the leave of absence was full-time, constitutes an automatic novation of her employment contract, in the sense of changing from a full-time to a part-time contract.

    • Legal basis

Voluntary leave of absence is an atypical manifestation of the suspension of the employment contract. Once granted, it produces the typical effect of any suspension: maintenance of the contractual relationship, and suspension of the mutual obligations to work and pay for work.

In accordance with the provisions of Article 46.5 ET, the employee on voluntary leave of absence retains a preferential right to reinstatement in vacancies of the same or similar category to his or her own that may exist or occur in the company.

In this case, the High Court recalls that, according to the provisions of Article 12.4.e) ET, the conversion of a full-time contract into a part-time contract, and vice versa, will always be voluntary for the employee, and cannot be imposed unilaterally by the company.

Based on the foregoing, and being that in the case of the Judgment the employee on voluntary leave expressly stated that her part-time reinstatement did not imply waiver of her right to reinstatement on a full-time basis; her reinstatement on a part-time basis does not constitute a contractual novation on a part-time basis, which implies that the employee maintains her preferential right to reinstatement in those full-time vacancies that arise in the same or similar category to hers.

    • Conclusion

The Court declares that, since the conversion of a full-time job into a part-time job, and vice versa, is voluntary for the employee, in the event that the employee who is on voluntary leave of absence accepts her reinstatement on a part-time basis, expressly stating that her reinstatement on a part-time basis does not imply waiver of her right to reinstatement in a full-time vacancy, such reinstatement on a part-time basis does not constitute a novation of her employment contract, and therefore does not constitute a novation of her employment contract, If the employee who is on part-time leave accepts to return to work part-time, expressly stating that his/her return to work part-time does not imply waiver of his/her right to return to work in a full-time vacancy, such return to work part-time does not constitute a novation of his/her employment contract and, therefore, the employee maintains his/her preferential right to return to work in any full-time vacancies that may arise in the company.

 

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