subrogacion convencional

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In an expected decision handed down on July 11, 2018 (case C–60/17), in response to two preliminary rulings by the High Court of Justice (“HCJ”) of Galicia, the Luxemburg court may have laid the groundwork for the Spanish Supreme Court (“SC”) to amend its case law on the effects of conventional subrogation in labor-intensive sectors.

The first preliminary ruling refers to the scope of application of Council Directive 2001/23/EC, on the succession of companies in cases where the subrogation of the incoming company in the employment contracts is established through collective agreement. The second preliminary ruling if there is an affirmative response to the first and refers to the application of the joint and several liability between the transferor and transferee companies established in article 44.3 Spanish Workers Statute.

The rulings stem from the change of the company awarded the security services contract for the Santiago de Compostela Pilgrimage Museum. The transfer was based on article 14 of the collective agreement of private security companies, which requires the new contractor to oversee the employees of the transferor company and establishes that the incoming company is not liable for the outgoing company’s employment debts with workers affected by the succession. The plaintiff, Mr. Somoza Hermo, took legal action against the transferor and transferee companies, claiming the difference in salary and ancillary benefits from 2010 to 2012.

The judge partially upheld the claim, ordering the two companies to pay for the benefits that were not considered prescribed. The transferee company appealed to the HCJ of Galicia, which suspended the proceedings and raised the preliminary issues.

To date, SC case law—starting with SC ruling of April 7, 2016, upheld in several subsequent decisions—has placed conventional subrogation outside the scope of application of article 44 Spanish Workers Statute, considering that, when subrogation occurs according to the mandate in the applicable collective agreement, it is this mandate that sets the assumption of fact and the legal consequence, validating the typical disclaimer clauses that favor incoming companies.

After analyzing the requirements established by the Directive, the Court of Justice of the European Union (“CJEU”) determined that, although the agreement established subrogation, when the transfer of all or an essential portion of the workforce alone comprises an “economic unit” subject to the transfer to which the directive refers, the assumption of fact falls within the scope of application.

With regard to the second preliminary ruling, regarding which there was maximum expectation, the CJEU determined that it falls within the margin of national discretion to decide whether to apply joint and several liability as established in article 44 Spanish Workers Statute. Under article 3.1 of Directive 2001/23, Member States can establish joint and several liability between the transferor and transferee, but it is not compulsory. Therefore, according to the CJEU, the Spanish courts will be tasked with determining whether article 44.3 Spanish Workers Statute applies in the case of conventional subrogation or it can be replaced by a collective bargaining rule, such as the sector’s collective agreement.

Thus, we remain attentive to the resolution handed down by the Labor Division of the Galicia HCJ in this case that, if favorable to the application of article 44.3 Spanish Workers Statute, may lead to the intervention of the SC to unify (or amend) the doctrine. The ruling may be particularly relevant to companies in the cleaning, maintenance, surveillance and security industries.

This post is also available in: Español



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Abogada del Área de Conocimiento e Innovación de Cuatrecasas. Profesora colaboradora en ESADE