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In comparison to 2017, which was relatively calm on the legislative front and somewhat more active in the judicial field, 2018 is approaching packed with new developments in legislation and case law that will be key for corporate strategy decision making. Starting with legislative developments in the labor field, we highlight the most important ones below:
- Subcontracting of work and services
- The new Public Sector Contracts Act will come into force.
One of the main legislative developments in 2017 was Act 9/2017 on Public Sector Contracts, which comes into force in March 2018. The act will impose important obligations regarding applicable collective agreements and social clauses for companies wishing to contract with the public administration (access our legal flash and post on the 12 key labor points of the new act).
- The amendment process of article 42 of the Workers Statute (“WS”) will be concluded.
The anticipated amendment of article 42 WS, on matters of contracts and subcontracts, will probably be concluded during 2018. Its parliamentary process was started by the Socialist Group in 2016. The scope of this amendment is twofold: (i) to clarify the polemic concept of “own activity,” identifying it with the main or core activity of the main company, and (ii) to equate the basic working conditions of the subcontractor and the main company, imposing those established in the collective agreement applicable to the main company, or those that are effectively implemented in the main company. Basic working conditions are understood to be “those referring to remuneration and salary levels; hiring conditions; working and rest time; equality; the protection of maternity, nursing mothers and paternity leave; and occupational risk prevention.”
If the amendment prospers in those terms, it will have an enormous effect on the subcontracting and outsourcing policies of the companies affected, as well as on the negotiation of service provision contracts between companies.
- Record of the working day
Another legislative initiative, started in 2017 by the Socialist Group, and that is currently at the amendment stage in the lower house of the Spanish parliament is the amendment of article 34 WS, which seeks to include the obligation to record the normal working hours daily, including each worker’s specific time of arrival and departure. This initiative seeks to amend the Supreme Court’s case law reflected in its rulings of March 23, 2017 (the case of Bankia, analyzed in this post), and of April 20, 2017 (the case of Abanca), by which article 35.5 WS currently in force only requires the overtime hours actually worked to be recorded, but not normal working hours, as opposed to what happens with part-time workers. This obliged the Inspectorate of Work and Social Security (ITSS) to adopt its own internal criteria (see our post and our legal flash).
- Protection of workers’ personal data
In a matter that unquestionably affects labor relations, it should be highlighted that the new Regulation (EU) 2016/679, of April 27, on the protection of natural persons with regard to the processing of personal data, will be fully applicable as of May 25, 2018. Consequently, the new Personal Data Protection Act (LOPD), which is under consideration in Spain and due to be adopted in May, currently looks as though it will reflect the Supreme Court’s case law on video surveillance in the workplace (see the developments of the draft bill in this post).
- Posting of workers
A draft bill is under consideration to implement European Union (EU) directives in the financial, corporate and healthcare areas, and on the posting of workers in the framework of the provision of services, originating from Royal Decree-Law 9/2017, of May 26. On this last point, the directive stipulates the introduction of some administrative requirements and control measures, as well as the classification as administrative offense proceedings of the breaches of these new obligations. The sanctions imposed by the authorities of other States must be recognized as if they had been imposed by the Spanish authorities themselves, establishing the steps for their notification or collection in Spain.
- Possible reform of corporate internships of university students
The lower house of the Spanish parliament has agreed to consider the draft bill regulating external academic internships, presented by the Unidos-Podemos-En Comú Podem-En Marea parliamentary group, which includes steps to limit the number of interns according to the size of the company.
- Nullity of dismissal and assisted reproduction
The lower house of the Spanish parliament has also agreed to consider a draft bill, presented by the same parliamentary group, to amend the WS regarding the occupational safety of women workers undergoing assisted reproduction treatment. It includes the unfair disciplinary or objective dismissal of these workers in the list of contract terminations that have to be classed as null, in a similar way to pregnancy, maternity and paternity leave, and reduction in working hours.
Trade union leaders and management representatives are negotiating the amendment of employment contract regulations, one of the points of the investiture agreement after the last general elections. If the negotiations progress in the coming year, the apparent intention is to reduce the number of contracts to three: the standard open-ended contract, the training contract and the temporary contract with increasing compensation and limited to three years.
In the area of case law, we are awaiting a series of judicial decisions in 2018, mainly from the Court of Justice of the European Union (CJEU), which will be crucial for providing legal security in some areas that currently cause concern for many companies:
- Compensation for termination of temporary contracts
As we informed in this post, during 2018 we will be waiting expectantly for the CJEU ruling on the triple preliminary issues submitted by the Labor Division of the Supreme Court, questioning the scale and extent of the controversial ruling issued by the CJEU on September 5, 2016, on the Diego Porras case (discussed here). The ruling equated the compensatory effects of termination of an interim contract with termination for objective reasons.
- Pregnant workers’ priority of permanence in collective dismissals
The issue submitted by the High Court of Justice of Catalonia about whether the inclusion of pregnant workers in collective dismissal proceedings breaches EU regulations on maternity protection must also be determined by the CJEU in 2018. The Advocate General has already stated that she considers dismissal for business reasons is not always an “exceptional reason” for pregnant workers to be included in a collective dismissal and that, in this context, there would be an exceptional reason for dismissal if it was established that the worker could not be relocated in another workplace.
- Subrogation of workers planned in collective dismissal
The CJEU has also a preliminary issue pending from the High Court of Justice of Galicia, which questions whether the standard clauses that regulate business succession under collective bargaining agreements, but limit its legal effects, are in line with the EU directive. If the clauses are found contrary to European law, a large amount of collective agreements in Spain will be affected.
- Monitoring by companies and protection of privacy
In 2018 we will find out the reaction of our courts (particularly the Constitutional Court) to the case law issued by the European Court of Human Rights in the case of Barbulescu (ruling of September 5, 2017). This case law defines the scope of corporate control and the monitoring of workers’ electronic communications, making the control subject to a series of requirements of prior notice, limitation, proportionality and justification (see our post here).
In conclusion, everything suggests that 2018 will be a year with many major and complex developments in labor law, some of which will be subject to approval by Parliament.
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