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The High Court of Justice of Galicia (Spain) has issued a significant judgment that could lead to many collective bargaining agreements in workforce-intensive sectors becoming unlawful.

In July, we reported (see our post dated July 18 on the “Somoza Hermo” case) on an important judgment by the Court of Justice of the European Union (CJEU), ruling on a preliminary question that the High Court of Justice of Galicia (HCJG) referred in a matter involving the changeover of the company providing security services at the Pilgrimage Museum in Santiago de Compostela (in Galicia, Spain). The HCJG asked the CJEU whether the change of company fell within the concept of transfers of companies in Directive 2001/23/EC and, if so, whether liability could be limited under a collective bargaining agreement, so that the incoming company would not have to take over the outgoing company’s employment-related debts in relation to the employees affected by the transfer.

In the case in question, company succession was dependent on the collective bargaining agreement; there was no transfer of assets between the former and the new contract awardee; rather, there was a transfer of staff in line with article 14 of the security services sector collective bargaining agreement. The CJEU answered the first question in the affirmative but did not answer the second question, holding that it was a discretionary matter for the national court to decide whether joint liability within the meaning of article 44 Spanish Workers Statute was applicable; now, we start the new judicial year with the judgment issued by the HCJG on July 26, 2018, ruling on the second question in the Somoza Hermo case for the time being.

In its judgment, after establishing that the matter does involve a company transfer, the Galician court had to decide whether the collective bargaining agreement could in this case be settled under the directive (technically, as a transposition of law) and, therefore, whether liability could be limited as in the security services sector collective bargaining agreement or instead whether article 44 Spanish Workers Statute was applicable if the case fell within the concept of a transfer of companies, since as we know, the Spanish Workers Statute establishes joint and several liability by the former company and the new company for debts incurred before the transfer, for a period of three years.

In this scenario, in its recent judgment the court held article 44 Spanish Workers Statute to be mandatory law, meaning that the collective bargaining agreement could not specify a less favorable regime, i.e., for our purposes, limiting the liability for prior debts on the part of the new service provider was unlawful.

This is unquestionably an about-face with regard to settled case law from Spain’s Supreme Court, which not only denied that taking over staff under conventional conditions in cases of transfer could be regarded as a transfer under article 44 Spanish Workers Statute but also allowed the collective bargaining agreement to stipulate limitations on liability.

Therefore, as a consequence of academic legal opinion, we dare say that the former academic legal opinion on case law may be changed when these matters return in appeal to the Fourth Chamber of the Supreme Court for unification of academic legal opinion.

The practical upshot is both undeniable and significant: in a change of workforce-based contract and concession (cleaning, security, maintenance), or both, which very often includes subrogation clauses, it is the collective bargaining agreement that turns what initially was not a company transfer into one, therefore making article 44 Spanish Workers Statute fully applicable and ruling out conventionally relieving the transferee company from liability for previous debts.

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Socio

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Experto en litigios y práctica judicial, tanto en el orden social como en el orden contencioso – administrativo, asesoramiento en negociación de convenios colectivos y acuerdos colectivos, reestructuraciones, sucesiones empresariales y outsourcing, asesoramiento en relaciones especiales de alta dirección y deportistas profesionales, asesoramiento jurídico continuado a empresas de distintos sectores, tanto nacionales como extranjeras, asesoramiento en Seguridad Social y Prevención de Riesgos deportivoes

ruben.doctor@cuatrecasas.com

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