Personnel restructuring in Spain is a complex procedure usually involving collective dismissal.
A collective dismissal is the termination of employment contracts for economic, technical, organisational or production (ETOP) reasons. To constitute a collective dismissal, the causes must affect at least:
- 10 workers in companies with less than 100 employees
- 10% of the workers in companies with between 100 and 300 employees
- 30 workers in companies with more than 300 employees
Collective dismissal always follows a consultation period with the workers’ legal representatives or the negotiation committee established for this purpose. The consultation period will last 30 days in companies with more than 50 employees and 15 days in companies with fewer than 50 employees. This consultation period must follow a series of formal requirements and be presented to the labour authority and the workers’ legal representatives.
If the company or workplace lacks elected worker representatives, it’s necessary to establish a negotiation committee. The time limit for setting up the representative committee shall be seven days from the date of the communication unless one of the work centres affected by the procedure does not have legal workers’ representatives, in which case the time limit shall be fifteen days. If the representative committee has not been constituted by the mentioned date, the consultation period will start without extending the deadline for its creation.
After forming the representative committee (or once the specified date has passed), the consultation begins with a letter submission to the workers’ representatives and a copy to the labour authority. The letter shall provide the following information:
- The reasons for adopting the measure, whether economic, technical, organisational or production reasons
- The number and professional classification of the workers affected by the dismissal
- The estimated period to execute the redundancies
- The workers to be appointed to the negotiation committee or, failing this, the absence of such a committee
- The basis for nominating the workers affected by the redundancies
- A copy of the initial communication sent to the workers or their representatives by the company management, informing them of its intention to initiate the collective redundancy procedure.
This information must be in the Explanatory Memorandum, detailing the reasons for collective redundancies. It should also have a technical assessment from an independent expert confirming the legitimacy of the grounds.
Once received, the labour authority must request a report from the Labour and Social Security Inspectorate, within a maximum of fifteen days, on the declaration made and the development of the consultation period. The labour authority verifies that the documentation submitted complies with the requirements according to the specific grounds for dismissal. This report must be part of the file.
Termination of employment
After the consultation period, the employer shall notify the labour authority, the workers’ legal representatives and the employees themselves of the outcome of the consultations. Additionally, the employer shall provide a copy of any agreements reached within fifteen days following the last meeting. Moreover, all meeting minutes from the consultation period, duly signed by all those attending, must be submitted.
If the employer fails to communicate their decision within fifteen days from the conclusion of the final meeting held during the consultation period, the procedure will expire.
The employer’s decision may be disputed by the workers’ legal representatives, following the specific procedure established in the applicable regulations, and by the workers individually. The labour authority retains the right to examine the decision under certain circumstances. This includes instances where there are suspicions of fraud, fraudulent intent, coercion or abuse of rights or if the agency responsible for unemployment benefits raises concerns about the potential wrongful acquisition of benefits through the agreement.
If you need workforce restructuring or contract termination strategies to avert the mandatory application of collective dismissal procedures, please do not hesitate to contact us.
Eduardo de Sousa Gama
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This article is not considered legal advice