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The Labor Division of the Spanish Supreme Court has just issued an important judgment that changes its earlier case law to bring it into line with the doctrine of the Court of Justice of the European Union (“CJEU”) in the Somoza Hermo Case (C-60/17)—discussed previously here. This change could mean that all clauses in collective bargaining agreements establishing limitations on the liability of transferee companies that take over contracts in workforce-intensive sectors will be without effect.

The CJEU in Luxembourg had left it to the discretion of the national courts to decide whether joint and several liability within the meaning of Section 44 Spanish Workers Statute applied in the event of a transfer under a collective bargaining agreement, even where there is a clause in the collective bargaining agreement limiting the transferee company’s liability. There had already been an affirmative ruling by the court that had referred the question for a preliminary ruling—the judgment of the High Court of Justice of Galicia of July 26, 2018 (Somoza Hermo case), discussed here—but the change in the case law has now been upheld by the Supreme Court.

Many industries could be affected given that their collective bargaining agreements contain transfer clauses that limit the transferee company’s liability. For example: the private security, cleaning, maintenance, contact center, ambulance, food and beverage, hotel, and tourism sectors, to mention just a few.

Under this judgment, worker claims in these sectors against transferee companies should prove that the conditions for applicability of Section 44 Spanish Workers Statute have been met, specifically, the transfer of an economic unit which, in these cases, consists of the transfer of the contracts of a major part of the staff (in qualitative or quantitative terms). In that case, Section 44 Spanish Workers Statute would kick in with full force, and it would not be possible to alter the statutory liability regime and most likely also not other conditions of the transfer.

In any case, the judgment–which also had a dissenting vote–leaves unresolved significant uncertainties regarding the extent to which the established collective bargaining agreement regime does not apply, something that will have to be decided in each individual case.

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


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