New CJEU ruling on collective redundancies – Bird & Bird

The Court of Justice of the European Union (CJEU) has issued an important ruling, dated 13 May, 2015, regarding the collision between Spanish legislation on collective redundancies and the contents of Directive (EC) 98/59 on the approximation of the laws of the Member States relating to collective redundancies(hereinafter, the “Directive 98/59”).

This judgment results from the request of a preliminary ruling submitted by the Employment Court no.33 of Barcelona in the context of a termination claim filed by an employee of Nexea. The claimant was affected, together with other 12 colleagues, by the closure in 2012 of the workplace of his former employer, which was located in Barcelona.

The claimant alleged that his dismissal was null and void insofar as Nexea unlawfully avoided fulfilling the collective redundancy process and formalities provided for in the Directive 98/59. In particular, he argued that the total number of terminations taken into account for collective redundancy purposes must refer to the number of employees in each work place (as per Directive 98/59), rather than to the total headcount of the company (as set forth in the Spanish legislation and the Spanish case law).

In its analysis, the CJEU concludes that any national legislation that introduces the whole company and not each work place as the sole reference frame (as it is the case of Article 51.1 of the Spanish Statute of Workers) is contrary to Directive 98/59.

This would be the case if such national regulation results in a reduction of employees’ protection when the thresholds are surpassed (if taking the work place as reference) and collective information and consultation rights are triggered pursuant Directive 98/59.

Hence, companies that are planning to terminate employees, should from now on take into consideration (and in view of prospective amendments to Spanish employment laws) that the thresholds provided for by Spanish regulations shall be implemented taking, as reference units, both the work place and the company as a whole.

This judgement also implies the review of the thresholds for collective redundancies, as long as Spanish regulations also differ in this matter from European rules, which set forth a maximum of 20 dismissals in a 90-day period. A threshold that, if surpassed, will require compliance with the process and formalities provided for collective redundancies irrespective of the number of employees in the workplace.

In any event, until the Spanish Statute of Workers is amended in this regard, and as cautionary criteria, it is advisable for companies to take into account not only the current thresholds for collective redundancies provided in the Spanish Statute of Workers but also those established by Directive 98/59.

Miguel Pastur is counsel at Bird & Bird. He can be contacted at miguel.pastur@twobirds.com