Worker subrogation or company subrogation

Labour subrogation is undoubtedly one of the issues that generates most uneasiness and doubts among workers. This is normal. After all, it means that the company they work for changes hands. For this reason, here we are going to answer the most common and frequently asked questions related to this situation.

What is labour subrogation and when does it occur?

A company, like any other asset, can be sold and transferred to another company or individual. When this happens, the new owner is obliged to respect the labour relations that the previous owner had. This is known as labour subrogation.

However, subrogation of workers can occur in two different circumstances. Let's take a look at them:

• By succession. This means that the business changes hands as a result of the employer's retirement or a transfer. In this case, the procedure is governed by Article 44 of the Workers' Statute.
• By obligation. This is a rather more complex case and is related to collective agreements in the security, hotel and catering or cleaning sectors. It is based on the above-mentioned article of the Workers' Statute and on several rulings of the Supreme Court and the European Court of Justice.

However, the reason for the subrogation of companies does not affect the worker in any way. The reason? In both cases, the new employer has to respect your employment rights, as we said above.

But what are these rights? We are talking, for example, about the salary, the length of the working day or the type of contract. Of course, he or she can modify the conditions associated with it, but never terminate it. At least, not without going through the Spanish dismissal procedure.

How can the new employer change the working conditions of the subrogated contract?

We already know that a subrogated worker cannot be dismissed without payment of the corresponding severance pay. In this respect, the employee's seniority also remains unchanged. By this we mean that if, for example, he worked for the company for 10 years before the transfer, the new employer will have to respect this period of time.

What he can do is to change the conditions specified in the contract. However, in order to do so, it is essential that the employer proves that there is an objective cause provided for in the Workers' Statute. This may be of an organisational, economic, productive or technical nature.

In the event of one of these circumstances, the new employer may modify the employee's salary, shift, working hours or the length of the working day. However, there are also limits, which are set out in the collective agreement in force in the sector.

Can the employee refuse subrogation?

Unfortunately, the answer is no. This is mainly because the decision to transfer the business is a right of the employer. This is mainly because the decision to transfer the business is a right of the employer which cannot be opposed.

Obviously, any subrogated worker can request voluntary redundancy from the new employer. However, he or she must bear in mind that this will result in the termination of his or her employment relationship without the right to receive compensation or unemployment benefits.

However, there is the possibility that the new employer makes a "substantial" change to your working conditions and you do not agree to it. If this happens, the law provides two alternatives:

• Challenge the employer's decision before the Social Court that corresponds to him. This will leave it to the judge to determine whether or not the substantial modification of conditions is in accordance with the law. This is the recommended option for those who neither wish to terminate the contract nor to undergo such modifications.
• Terminate the contract. In this case, you are entitled to compensation. However, it is only 20 days per year worked with a maximum of 9 monthly payments.

Other frequently asked questions about surrogacy

We have already cleared up a good number of doubts about the subrogation of workers. However, there are still some questions that are just as important as the previous ones.

Is the employer obliged to inform the employee of the subrogation?

Obviously, the answer is yes. In fact, it is an obligation of both the employer who transfers the business and the employer who receives it. The document delivered by way of notification must contain the date on which the subrogation will take effect, the reason for the subrogation, the economic, social and legal consequences of the subrogation and, most importantly, the measures it will entail for the employees.

This notification has to be given to the employees themselves as well as to their representatives. Moreover, although there is no time limit set by law, the law provides that "it must be given sufficiently in advance so that the workers are not affected by the subrogation".

Who is liable for the debts in the event of a subrogation of employment?

It is possible that, at the time of subrogation, the employer transferring the business may owe money to its employees in wages. In this respect, the fact that this happens has no effect on the employees' right to be paid. In fact, both the previous owner and the new owner are obliged to settle such debts as soon as possible.

The same applies if these debts relate to the business's social security obligations. In other words, both will be responsible for paying them.

In short, we know that labour subrogation is a complex subject, but we hope we have shed some light on it with this information. If you have any doubts, please contact one of our labour lawyers specialised in labour subrogation to protect your rights.