Pérez-Llorca and CEOE organised a conference which addressed the main developments in the field of collective and individual dismissals, analysing the challenges of the current legal regime. During the event, controversial issues arising from the extensive case law of the Court of Justice of the European Union and the Spanish Supreme Court affecting the legal regime of dismissal were discussed, as well as the challenges that it poses in terms of the balance between the rights of workers and the needs of companies, with the aim of providing clarity and promoting a better understanding of the issue for all parties involved.
The session was opened by Luis Enrique Fernández Pallarés, partner of Pérez-Llorca’s Employment, Compensation and Benefits practice area; Rosa Santos, director of CEOE’s Employment, Diversity and Social Protection department; and Yolanda Valdeolivas, Of Counsel of Pérez-Llorca’s Employment, Compensation and Benefits practice area.
Rosa Santos noted that the signing of the 5th Agreement for Employment and Collective Bargaining (“AENC”) was “another milestone in the bipartisan social dialogue, which has provided a roadmap that negotiators have followed and has allowed purchasing power to be restored by keeping inflation in check,” stressing that “dismissal was a consciously neglected issue when it came to labour reform.” In this regard, Yolanda Valdeolivas added that the 2021 Labour Reform and the aforementioned AENC established a consensus framework in which dismissals were not part of the structural framework agreed by the business and trade union representatives. “It is crucial to understand that industrial relations must be approached in a cross-sectoral or holistic and unhurried manner,” she said. Valdeolivas argued that we are in a period of ‘regulatory stress’, characterised by a flood of legislation, contrary to the recommendations for law-making in this area.
Luis Enrique Fernández Pallarés pointed out that in recent months we have witnessed a series of court rulings made by the Supreme Court that have created a framework of debate and uncertainty. For Rosa Santos, many of the regulatory changes have been implemented without consultation or debate with the business and trade union representatives, which has led to “legal uncertainty and difficulty in interpreting the law.” To conclude the first session, Pérez-Llorca’s Of Counsel emphasised the importance of a more reflective and collaborative approach to law-making: “The rules need to be developed, consulted and enriched by the various legal operators,” she added.
This was followed by the round table discussion entitled ‘Collective dismissal: crucial legal and judicial aspects’, moderated by Valdeolivas and with the participation of María Luisa Segoviano Astaburuaga, judge of the Constitutional Court and former President of the Labour Chamber of the Supreme Court; Carles Frigola Barrios, Director of Labour Relations, Equality and Diversity at Air Europa; and Iván Gayarre, partner of Pérez-Llorca’s Employment, Compensation and Benefits practice.
Segoviano Astaburuaga explained the importance of standardising regulation to achieve a balance in collective dismissals, and pointed to Article 51 of the Workers’ Statute and Article 24 of the European Social Charter as fundamental pillars. She also stressed that reaching an agreement does not guarantee that it is in accordance with the law and urged companies to reinforce and specify the causes justifying the termination of jobs, avoiding generic language.
In this regard, Frigola Barrios reiterated the need for clear and standardised regulation, considering that this is essential for guaranteeing a stable regulatory framework: “For companies, it is vital that the legal certainty enshrined in Article 9.3 of the Spanish Constitution is guaranteed in the interpretation and application of employment law.” He also stressed that this objective should be approached from various perspectives: social dialogue, improvements in legislative technique and clarity of jurisprudential criteria that sometimes go as far as modifying existing regulations or well-established case law.
Finally, Gayarre favourably highlighted the recent Organic Law on Measures for the Efficiency of the Public Justice Service, which introduces the possibility for labour inspectors to participate in conciliation, mediation and arbitration activities in labour disputes, beyond their role as inspectors. “This measure allows the parties to appoint a labour and social security inspector during the consultation period, without affecting the final report of another inspector,” Gayarre said. In addition, he proposed three legal reforms: clarifying consultation periods and the appropriate time to carry out a collective dismissal in cases of Article 44 of the Workers’ Statute; allowing the Supreme Court to limit the retroactive effects of its changes in doctrine in cases of collective dismissal arising from rulings of the European Court of Justice; and facilitating the advance payment of labour compensation by the Wage Guarantee Fund (“FOGASA”) in judicially approved insolvency restructuring plans, with a reasonable time limit for repayment by companies.
After this debate, Fernández Pallarés led the panel ‘Unfair dismissal: new procedural and compensation aspects’, which included the participation of Ignacio García-Perrote Escartín, Judge of the Labour Chamber of the Supreme Court; Ana Benavides Pizarro, Corporate Director of Labour Relations at Banco Santander; and Fernando Luján de Frías, Vice Secretary General of UGT. The Pérez-Llorca partner presented the judgments of the Labour Chamber of the Supreme Court of 18 November 2024, on the prior hearing for disciplinary dismissal, and of 19 December 2024, on the amount of severance pay for unfair dismissal, which were discussed by the panellists.
García-Perrote Escartín underlined the clarity of Article 7 of ILO Convention 158, examined by the judgement on the prior hearing, stating that “the company must give the worker the opportunity to defend himself before the employment relationship ends, so there is no doubt as to when it should be held.” However, he pointed out that Article 10 of ILO Convention 158 requires legislative development, as judgement 1350/2024 of 19 December has confirmed that Spanish labour legislation respects the aforementioned Article 10 of the ILO Convention. The judgment of 19 December 2024 could not analyse the compatibility of Spanish labour legislation with Article 24 of the European Social Charter, because this provision was not in force in Spain when the dismissal in the case took place.
Benavides Pizarro then went on to highlight the concerns that these rulings are prompting in companies, particularly in relation to the prior hearing process and the possible practical consequences that he believes could result from the judicial modification of the severance pay set by national regulations. “There is a problem of legal certainty for companies,” he said.
To conclude the session, Luján de Frías stressed the binding nature of the decisions of the European Committee of Social Rights. He stressed that Spain, in compliance with the commitments made when ratifying the international legal instrument published in the Official State Gazette on 11 June 2021, must ensure that the three branches of government (executive, legislative and in this case judicial) implement the Committee’s resolution of 20 March 2024, which resolved complaint 207/22 filed by UGT against the Kingdom of Spain, in accordance with the opinion of the Council of State.
