How to calculate the number of contract terminations in collective dismissals has just been clarified by the TJUE. A Ruling of the First Chamber of the Court of Justice of the European Union has been published in which it interprets how the number of terminations in collective dismissals should be calculated from a temporary point of view. This interpretation contradicts the jurisprudential criteria maintained by our Supreme Court.
Calculate the number of contract extinctions in collective dismissals
Let’s start by remembering that the European Union Directive 98/59 defines in its article 1 that it will be understood as collective dismissals:
- Those carried out by an employer, for one or more reasons not inherent to the person of the workers. When the number of dismissals produced is, according to the choice made by the Member States
- For a period of 30 days:
- They will be at least equal to 10 in workplaces which habitually employ more than 20 and less than 100 workers,
- At least 10% of the number of workers. In workplaces that usually employ at least 100 and less than 300 workers,
- At least equal to 30 in workplaces that usually employ at least 300 workers.
- Or, for a period of 90 days, at least equal to 20, whatever the number of workers habitually employed in the workplaces concerned.
For the purposes of calculating the number of dismissals provided for in the first point above, terminations of employment contracts at the initiative of the employer on one or more grounds not related to the person of the employees will be treated as dismissals. Provided that the dismissals are at least 5.
What happened in Spain
The Spanish legislator, in transposing European legislation into Spanish law, opted for the temporary period of 90 days. Art. 51 of the Workers’ Statute Law defines collective dismissal as
“… the termination of employment contracts based on economic, technical, organizational or production reasons when, within a period of ninety days, the termination affects at least
- 10 workers, in companies with less than 100 workers.
- 10% of the number of workers of the company in those companies that employ between 100 and 300 workers.
- 30 workers in the companies that occupy more than 300 workers.
In calculating the number of terminations of employment contracts …, account will also be taken of any other terminations that have occurred during the relevant period at the initiative of the employer for reasons other than the person of the employee … provided that there are at least five such terminations.
When in successive periods of 90 days and with the purpose of evading the provisions contained in this article, the company terminates contracts under the provisions of article 52.c) in a number lower than the thresholds indicated, and without new causes justifying such action, such new terminations shall be deemed to have been effected in fraud by law, and shall be declared null and void”.
Point of discord
The question of counting has not been peaceful. The formula for calculating the 90-day period established by Article 51-1 mentioned above is the subject of controversy. Specifically:
- whether this calculation of dates should be made backwards, that is, looking at what happened in the period of time prior to the dismissal
- if looking to the future, this is starting the countdown to the day of extinction.
- And even, some Magistrates proposed, anticipating the criterion now maintained by the TJUE if the simultaneous calculation towards the past and towards the future was possible. Provided that 90 days were counted and that all the contractual extinctions.
Calculate the number of contract terminations in collective dismissals according to the TJUE
Well, the Social Chamber of the Supreme Court has been maintaining a clear and unaltered jurisprudential criterion for several years now. In the sense of considering that this calculation was made backwards. Starting from the date of the dismissal that is being challenged, as the last day of calculation of the 90-day period, as indicated by Article 51 of the TRET (Consolidated Text of the Workers’ Statute). To reach the numerical threshold required to consider that it is a collective dismissal. And at the same time, as the first from which a new period of 90 days begins to be counted.
The ruling of the Supreme Court of Justice of November 11 contradicts this jurisprudential criterion of our Supreme Court. In establishing that for the purposes of assessing whether a contested individual dismissal is part of a collective dismissal, the reference period provided for in that provision for determining the existence of a collective dismissal must be calculated
- computing any period of 90 consecutive days in which this individual dismissal has taken place and during which the largest number of dismissals by the employer has occurred. For one or more reasons not inherent to the person of the workers, within the meaning of that same provision.
On which the ECJ bases itself
He bases his decision on that:
- “the full effectiveness of that directive would be limited, contrary to its very purpose, if it were interpreted to mean that national courts could not take into account dismissals occurring before or after the date of the contested individual dismissal for the purposes of determining whether or not there is collective redundancy, within the meaning of that same directive”, accepting the argument of the European Commission that the court must examine “the period covering the contested individual dismissal and during which the largest number of dismissals by the employer for one or more reasons not related to the person of the workers occurred
Regardless of the fact that it will be necessary to see how our courts accept this new European Jurisprudential criterion. And how the Jurisprudence of our Supreme Court evolves, there is no doubt that we will have to be very cautious. And we must take these new time limits into account when dealing with individual dismissals if we do not want to see the viability of the extinction measure compromised.
A new scenario is therefore opened up. With new elements to take into account in these dismissals, in addition to the existing formal and substantive requirements. At a time of maximum uncertainty about the economic situation we face. And with many companies waiting to undertake extinctions. Once the Government lifts the brake on the dismissals arising from Articles 51 and 52.b of the ET. Collective dismissal and objective dismissal respectively, with direct cause in losses of activity as a consequence of the COVID-19.
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Human Resources Management