SPAIN Law and Practice Contributed by: José Antonio Segovia, A&O Shearman
After the consultation period has ended, the compa - ny shall communicate to those employees who were part of the negotiation committee and to the labour authority the decision on collective dismissal. This communication should be made within a maximum period of 15 days from the last meeting held in the consultation period. The company must also com - municate notice of dismissal individually to each of the affected employees. The individual communica - tion must follow the formal procedure for individual objective dismissals. Severance The statutory payment in case of collective redun - dancy is 20 days’ salary per year of service up to a maximum of 12 months’ salary. The final amount of severance is negotiated during the consultancy peri - od, which is usually increased by companies in order to reduce the risk of litigation. Other obligations to be included in the social plan Out-placement programmes must be provided for a minimum of six months if the collective redundancy affects more than 50 employees. Special social security contributions will be made for employees in the case of employees aged 55 years or above who did not make social security contribu - tions prior to 1 January 1967 and who are included in a collective dismissal process that is not based on an insolvency. The employer must pay their contributions until they reach the age of 61 (in the case of economic grounds) or 63 (in the case of organisational, produc - tive or technical grounds). The application of the spe - cial agreement must be made during the collective dismissal procedure. An additional contribution to the Public Treasury must be paid by companies which make profits and carry out a collective dismissal that affects employees aged 50 or above. Qualification of collective dismissal Collective dismissals can be challenged collectively by workers’ representatives on the basis that: • the grounds argued by the company to justify the dismissals do not exist;
• the formal process has not been followed; or • the decision has been reached after wilful coercion, fraud or abuse of law. Normally, the workers’ representatives only launch a claim against collective dismissal if the negotiation period concludes without an agreement. The subsequent judgment may render the company’s decision as one of the following. • Fair – where the company has complied with the legal procedure and has evinced the existence of the grounds for the dismissal. • Not according to law – when the company has not proved the grounds justifying the dismissal, in which case the employer will have to pay to the affected employees the same compensation that would apply in the case of unfair individual dis - missals. • Null and void – this applies (i) when the legal pro - cess has not been followed, or (ii) when the com - pany’s decision was taken in breach of fundamen - tal rights or public liberties, or (iii) in cases of wilful coercion, fraud or abuse of law. In this case the employer must reinstate the affected employees and pay them the salaries accrued from the date of termination up to the reinstatement date. Termination of Top Executive Contracts Top executives’ contracts, regulated by Royal Decree 1382/1985 of 1 August 1985, may be terminated as set out below. Termination by the employer The employer can terminate a top executive contract at any time without giving any reason. The company must deliver to the employee a termination letter stat - ing the date of the termination, serve three months’ notice (or a longer notice if contractually agreed) or make payment in lieu of salary. The employee is enti - tled to the compensation agreed in the employment contract or, in its absence, the legal compensation of seven days’ salary per year of service subject to a limit of six months’ salary. The employer can terminate a top executive contract for a serious breach of their contractual duties. The
604 CHAMBERS.COM
Powered by FlippingBook