Collective Dismissal: Can I discuss the cause of the dismissal?

I have been dismissed as part of a collective dismissal. If I sue, will I be able to check if the cause invoked by the company to justify my dismissal exists? 

On July 2, 2018, the Supreme Court delivered Judgment No. 699/2018, signed by five Judges, with one individual vote against it, analyzing the effects that a collective dismissal procedure concluded with an agreement, has on the causes that led to it, in an individual procedure for dismissal. Or in other words, if in the individual challenge of the collective dismissal that ended with an agreement between the Company and the Workers’ Representatives, can the concurrence of the case be questioned when the agreement has not been challenged in court. 

The judgment, whose ruling includes the dismissal of the appeals filed by the Workers, maintains that it is against the most elemental common sense to admit the possibility of questioning the concurrence and justification of the causes of the collective dismissal that were accepted by the workers’ representation and which have not been later questioned collectively by the labor authority, or by any other of the subjects entitled to institute the collective procedure, in individual lawsuits. 

It states that it is enough to simply imagine the enormous legal insecurity and distortion that could be generated by the existence of the innumerable individual processes, in which the point of discussion is the concurrence of the cause of the same collective dismissal of the same company, which, moreover, ended in agreement. 

Substantive and procedural law 

In order to reach this conclusion, we must start from two areas: (i) substantive law, which seeks to encourage and promote the achievement of an agreement between the Company and the Workers’ Representatives, and (ii) procedural law, referring to the collective processes the discussion on the concurrence of the justifying causes of the company’s measure, that affect all the concerned workers equally, and reserves the individual lawsuits for the analysis of the strictly particular issues that may affect each of the workers. 

Thus, it is argued that the right to collective bargaining appears as the crucial element, the first pillar, through which this type of conflict situation is to be faced, in the search for an agreement that facilitates and pacifies its resolution, and from the procedural law, attributing effectiveness of “litispendence” and “res judicata” to the collective process as opposed to the individual one, in such a way that in the individual process it is only possible to face the strictly individual issues that are singularly related to each one of the workers who are claimants. 

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Dismissal Null, Dismissal Unfair and Dismissal Proceeding: Differences

It is for this reason, the Supreme Court maintains, that the design of the legislator in the matters of collective dismissal happens because is in the collective lawsuit where  the discussion of the concurrence of legal causes is discussed, since one of the pillars on which the legal regime of collective dismissals rests is to encourage and give special relevance to the achievement of the agreement between the Company and the Workers’ Representatives during the consultation period, not only to pacify labor relations as much as possible, but also to offer the same solution to the legal situation of all workers affected by the collective dismissal, the best evidence of this being the attribution of the effectiveness of “res judicata” on individual lawsuits to the sentence handed down in the collective challenge procedure. 

This is because it is not the case of unilateral decisions by the company that have not been challenged by the legitimate collective subjects, but rather situations in which the measure has been mutually agreed upon by the legitimate Workers’ Representatives and has not been fought by those who also have the collective action to do so. 

That is to say, as opposed to a pact that is the result of collective bargaining and that for this reason has all the prerogatives and the special level of protection that all agreements resulting from the right to collective bargaining deserve, with the limited legal possibilities available to workers to be able to individually challenge a legal transaction of this nature. 

Limits to the binding effect of collective bargaining agreements

The binding effect of any agreement resulting from collective bargaining finds its limit in the impossibility of affecting unavailable rights of workers and, obviously, in the eventuality that it has been concluded with the avoidance of legal rules of law necessary to regulate the matter covered by such agreements. 

As far as collective dismissal is concerned, there is no doubt that the acceptance of the concurrence of the legal causes that justify it in the agreement reached during the consultation period, falls within the framework that corresponds to collective bargaining and does not mean invading the scope of individual rights that are unavailable to the worker. 

The possibility that these agreements may have been adopted in transgression of the legal norms that regulate collective dismissal, and cover up fraudulent actions to the detriment of the workers, leaves open the possibility to challenge them for fraud, deceit, coercion or abuse of rights in the same terms provided for other situations of business crisis in accordance with what we have already pointed out. 

On the contrary, when there is no formal defect in the agreement, not even its fraudulent nature is alleged due to the concurrence of defects that could determine its nullity, the effectiveness of what was agreed as a result of the collective bargaining would be denied and the agreement reached between the company and the workers’ representatives would become a dead letter, if it were to be admitted that in each of the individual lawsuits the concurrence of the justifying causes for the dismissal that were accepted by the union representation may be reviewed, which is a discouragement to reach such agreements that constitutes the essential object of the consultation period. 

If this article has been of interest, we also suggest you to read the following article published on our website: 

On the subject of retroactivity in collective agreements