Lawyers specialised in redundancy procedures

It is understood that the employer applies for an employment regulation procedure because the situation in which his company finds itself from an economic and financial point of view is unsustainable; and it is expected that with the measures for termination of employment contracts proposed in the employment regulation procedure it will be viable for the company to survive, overcoming the crisis it is going through.

Furthermore, the economic reasons alleged must be objective for the company in particular in order to serve as a basis for the proceedings, i.e. it is not accepted as sufficient cause to request the application of the proceedings for the employer to allege a crisis in the specific sector in which the company is located.

Collective dismissal shall be understood to be the termination of employment contracts based on economic, technical, organisational or production causes, when, in a period of ninety days, the termination affects at least:

• a) Ten workers, in companies employing fewer than one hundred workers.
• b) 10 per cent of the number of workers in the company in companies with between one hundred and three hundred workers.
• c) Thirty workers in companies with three hundred or more workers.

The causes referred to in this article shall be deemed to exist when the adoption of the proposed measures contributes, if they are economic measures, to overcoming a negative economic situation of the company or, if they are technical, organisational or production measures, to guaranteeing the future viability of the company and of employment therein through a more appropriate organisation of resources.

Collective redundancies shall also be understood to be the termination of employment contracts affecting the entire workforce of the company, provided that the number of workers affected is greater than five, when this occurs as a result of the total cessation of its business activity based on the same causes as indicated above.

For the purposes of calculating the number of terminations of contracts referred to in paragraph 1 of this article, any other terminations occurring in the reference period on the initiative of the employer for reasons other than those provided for in paragraph c) section 1 of Article 49 of this law shall also be taken into account, provided that their number is at least five. When in successive periods of ninety days and with the aim of evading the provisions contained in this article, the company carries out terminations of contracts under the provisions of Article 52 c) of this law in a number lower than the thresholds indicated, and without new causes justifying such action, these new terminations shall be considered to have been carried out in fraud of the law, and shall be declared null and void.

1. The proceedings may be initiated at the request of the employer or the workers:

A.- The employer's request shall be addressed to the labour authority, in this case the Provincial Director of Labour, simultaneously opening a period of consultation with the workers' representatives.

This communication is initiated in writing on an official form addressed to the competent authority, accompanied by all the documentation that accredits the reasons for the proceedings and the justification of the measures to be adopted.

Specifically, the documentation to accompany the written request is as follows:

•     a) Explanatory report on the causes or reasons for the proposed collective redundancies, accompanied for these purposes by all the documentation that may be appropriate and, in particular, if the cause invoked by the company is of an economic nature, duly audited documentation accrediting the state and evolution of its economic, financial and equity situation over the last three years, If they are of a technical, organisational or production nature, the plans, projects and technical reports justifying the cause or causes given as grounds for dismissal, the measures to be adopted and their expected repercussions on the future viability of the company.
•     b) Number and categories of workers normally employed during the last year, as well as the workers to be affected, criteria taken into account to designate the workers to be affected and the period during which the termination of employment contracts is foreseen.
•     c) In companies with fifty or more workers, a social support plan setting out the measures adopted or envisaged by the company in order to avoid or reduce the effects of collective redundancies, as well as to mitigate their consequences for the workers who are finally affected, such as, inter alia, those aimed especially at the retraining or reconversion of the workers and their possible integration into other jobs within the company or group of companies, as well as those that favour the maintenance of jobs of an indefinite nature or the redistribution of the working day among the workers employed and others of a similar nature.
•     d) Written request for the report referred to in art. 64.1-4 a) and b) TR LET, to the legal representatives of the workers.

2. For the purposes of art. 51.3 TR LET, if the application for the initiation of the employment regulation proceedings for economic, technical, organisational or production reasons does not meet the requirements, the labour authority shall, within ten days, address the petitioner to remedy the defect observed within a further ten days, with the warning that, if he fails to do so, he shall be deemed to have withdrawn his petition, and the proceedings shall be filed; once remedied, the periods referred to in art. 51.4 TR LET shall begin to run. 51.4 of the aforementioned law. A copy of the rectification that is carried out shall be sent within the same period to the workers' legal representatives.

B.- Request by the workers, through their representative, if they presume that failure to submit the file could cause them damages that are impossible to repair.

The labour authority verifies whether the requirements are met, and there is a period of 10 days to rectify the situation. If the application is not corrected within this period, the application will be considered withdrawn.

3º - The labour authority notifies the INEM of the initiation of the proceedings and obtains a mandatory report from the Labour and Social Security Inspectorate on the reason for the proceedings.

The reports must be submitted within 10 days and be in the possession of the labour authority before the end of the consultation period.

4º - The labour authority may, during the processing of the proceedings, paralyse the measures adopted by the employer to render ineffective the result of any pronouncement.

The consultation period may end

a.- In agreement between the parties. In this case, the labour authority issues a resolution within 15 calendar days authorising the termination of the employment relationship.

If this period elapses without a resolution being issued, the termination is understood to be authorised under the terms of the agreement.

The labour authority shall refer the agreement to the judicial authority, with a suspension of the period for reaching a decision, for the purposes of its possible declaration of nullity in two cases:

• If, ex officio or at the request of a party, fraud, fraudulent intent, coercion or abuse of rights is detected.
• If it is considered that the agreement is aimed at unduly obtaining unemployment benefits for the workers affected due to the non-existence of the cause for the legal situation of the same.

At the end of the consultation period, the employer must inform the labour authority of the outcome of the agreement.

b.- Without agreement between the parties. The labour authority issues a decision upholding or rejecting, in whole or in part, the employer's request.

The decision must be issued within 15 days of the communication of the end of the consultation period. In the absence of a decision, the termination measure is understood to be authorised under the terms of the request.

The approval of the redundancy plan produces the following effects:

1st) Authorisation for the employer to proceed with the termination or suspension of the contracts affected by the plan.

2) Compensation: 20 days' pay per year of service with a maximum of 12 monthly payments, unless a higher amount is established by individual agreement.
If any worker has been with the company for less than 1 year, the months worked will be prorated to calculate the severance pay.
It is important to point out that in companies with less than 25 workers, FOGASA PAYS 40% OF THE COMPENSATION corresponding to the workers whose employment relationship is terminated, with the limit of one year's salary and without the base daily salary for the calculation exceeding twice the Minimum Interprofessional Wage.
If the company is late in the payment of compensation, this shall constitute a compensable default.

3) Entitlement to unemployment benefits, if the requirements are met, and which will be declared in the resolution of the case.

4º) In the event that the proceedings do not affect the entire workforce, the legal representatives of the workers have priority of permanence in the company.