The courts mark the limits of labor reform

The Supreme Court has become a protagonist in the implementation of the labor reform by generating harsh rulings against the new norm and annulling more than 25 Employment Regulation Files.

The open conflicts over collective dismissals have generated a flood of sentences in the last year. In fact, the social chamber of the Supreme Court (TS) has issued 79 rulings in cassation appeals related to these procedures since March 2013, when it first applied the labor reform of February 2012.
In this sense, the most important decision that the TS has taken on this matter was made public on December 19 and it dealt a resounding blow to the labor reform in one of its substantial issues: the ultra-activity of the agreements.
Contrary to what this regulation says, the High Court has decided that the working conditions agreed in the old and expired agreements remain in force, as long as they are not replaced by a new one agreed by the company and the workers.
While waiting for the ruling to be written, the Supreme Court reported that the majority of its magistrates had decided that "the conditions agreed upon in the employment contract from the moment of its constitution, whether directly or by reference to the applicable collective agreement , are contractual in nature and, therefore, continue to be enforceable between the company and the worker under the contract that binds them. Even, the text noted, "although the validity of the reference collective agreement has expired."
Continue negotiatingOf course, the Supreme Court establishes that, where appropriate, working conditions can be modified if the objective conditions for this to be done exist, that is, due to economic, technical, organizational or productive circumstances. "All this without prejudice to the continued obligation to negotiate a new agreement."
It is also important to note that the TS grants contractual nature to the conditions agreed in the agreement, which means that these must be respected even if they exceed the basic level of the Workers' Statute. The Supreme Court's opinion is better understood when it is taken into account that the labor reform was intended to promote the updating of collective agreements to the conditions of the sector and the company.
To this end, the Government decided to limit the extension of an expired agreement to one year, "as long as there is no agreement to the contrary" of the employers and workers, thus limiting what is technically known as ultra-activity of the agreements.
On the other hand, the rule regulates that as long as there is no new agreement, the company's workers are covered by a higher level agreement, such as the provincial, regional or national one. In the event that this does not exist, employees will only maintain the basic conditions included in the Workers' Statute in salaries, working hours or vacations, among other points.
Inner workingsThe Government thus intended to pressure employers and, fundamentally, the unions to sit down to negotiate a new agreement, and not to prolong its contents except for the salary chapter. In fact, this is the reason why in recent years, sectors and companies have had many problems adapting their internal functioning to a situation of losses or market deterioration.
Consequently, they quickly resorted to dismissing workers. That is, the resort to external flexibility. For these reasons, the Supreme Court ruling, which must be ruled on other similar issues, threatens to return to the previous rigidity of collective bargaining.
Sources familiar with the Supreme Court's deliberation have explained that what is expected is that the High Court will interpret what happens when an agreement expires and there is no higher sectoral agreement, because although the Government intends for the Workers' Statute to be applied, the reform work does not specify it.
Thus, the ruling could clarify that the expired agreement will apply to workers with a previous contract, because it is understood that their contractual agreement maintains the validity of that agreement under whose authority it was signed, but that the new workers will have the conditions established by the statute. until there is a new agreement. Of course, former employees will keep the previous conditions frozen.
Without a doubt, this ruling represents a new blow to the battered application of the labor reform by the judges, which has worsened significantly in courts such as the National Court or the Supreme Court itself in recent months.
Canceled processesIn this sense, according to data collected by the TS, it is worth noting that it has only endorsed 31 of the 58 processes appealed, which represents practically half. More specifically, the Supreme Court states that 9 of these Employment Regulation Files (ERE) did not comply with the law and 18 were declared null.
Of these last collective dismissals declared void, in which the right of reinstatement of workers was also recognized without the employer's option for compensation, the TS ensures that on 5 occasions fraud of the law was observed. In another 5 cases there were procedural defects of relative importance to the consultation period; In 4 of the appeals it was estimated that an irregular group of companies participated; and on two occasions that a fundamental right such as the right to strike or freedom of association was violated.
Given the last two appeals declared null, the Supreme Court affirms that they were revoked due to the lack of the necessary documentation to be able to carry out an effective negotiation during the consultation period.
Another piece of information provided by the Supreme Court, and which demonstrates a certain harmony between the courts, is that in 83% of the cases, the rulings of the TS confirm the sentences handed down by the National Court or by the higher courts of justice.
Furthermore, it adds that in the rulings rejecting the appeals, the majority percentage corresponds to those raised by the labor representation, while the appeals filed by the companies were only dismissed in 37% of the cases.
New technologies and other challenges in the workplaceThe emergence of new technologies in the company has had a strong impact on the workplace, introducing new challenges such as managing schedules or the workplace, which are becoming increasingly diffuse.
Added to all this is the arrival of technological developments such as artificial intelligence and robotics, which imply advantages for companies, but also some complications in the workplace and raise doubts as to whether machines will be able to select candidates in the future.
Salvador del Rey, president of the Cuatrecasas International Institute of Legal Strategy in Human Resources and partner of the firm, raises some of these reflections, and remember that all of this implies "a fundamental challenge" for the regulatory framework of human resources, especially in Europe, where labor regulations are showing "big signs of lag."
As he explained during the presentation of the book Human Resources and globalization: challenges for multinationals in the next five years, edited by La Ley, "labor regulations are now unstable, which is why European countries introduce continuous reforms." And he claimed that the promotion of regulatory changes must also continue on the Spanish agenda.
Del Rey recalled that in recent years labor law has ceased to be a protective norm for the worker, to also grant a relevant role to the mission of guaranteeing the organizational efficiency of the company, something that, as he highlighted, the judges do not they finish assuming.
In this sense, he criticized that more than two years after the labor reform, the scope of some of its key measures have been neutralized by the courts.
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