Timing rules in the calculation of collective dismissals
At current times when dismissals are increasing because of the pandemic crisis, the Court of Justice of the European Union (CJEU) has changed the way to calculate redundancies that have to proceed through the route of collective redundancies.
The CJEU judgment of 11 November 2020 (Issue C 300/19) increases the reference period to calculate the number of redundancies that force companies to resort to the collective redundancy procedure through the so-called timing rules.
For better understanding purposes, we explain below the starting point and the effects of the amendment.
Collective redundancies thresholds in Spain: Starting point
Article 51.1 of the Workers’ Statute establishes: when in successive periods of 90 days and to avoid the collective redundancy procedure, the company hands out several redundancies lower than the legally established thresholds, and without new reasons, those redundancies are considered having been carried out by legal fraud and will be void.
Until now, Spanish case law understood that for the calculation of the 90-calendar day period, the date of the redundancy made up both the final date of the term for redundancies up to that date and the initial date for the calculation of the following 90-day period.
For instance, let us assume that a company with less than 100 employees (*) does not carry out redundancies from January to March and then carries out eight redundancies at the start of April and two more in June. Even though the company reaches ten redundancies by June, a procedure of collective dismissal claimed by the employees dismissed in April would not be successful.
Change in doctrine, the timing rules
The new doctrine introduced by the CJEU judgment, known as the timing rules, establishes that the calculation of the 90 calendar days must be established both before and after the redundancy.
It means that, from then on, before terminating a contract, the company will have to determine whether collective redundancy is appropriate. Therefore, the company must analyse the number of redundancies in the 90 days before the date of redundancy and the number of redundancies expected to be carried out in the 90 days following the same date.
Returning to the previous example, and by reaching the threshold of employees in June (less than 90 days after the redundancies in April), the new redundancies would count to consider having reached the collective redundancies’ threshold.
Given this change in doctrine, we recommend that companies that foresee dismissals should analyse the new procedure before doing so.
(*) If the redundancies affect ten or more employees, the company must resort to the collective route.
If you require additional information about the collective dismissals’ thresholds in Spain,
This article is not considered legal advice