On the subject of retroactivity in collective agreements

We will see some sentences in relation with the retroactivity establised in the collective labour agreements,

First, the High Court of Justice of Catalonia on 25/09/2015 issued a ruling on this matter. In it  the Court confirmed the validity of the termination of a temporary relief contract. In order to reach this conclusion, the Court analized the retroactivity included in the Collective Bargaining Agreement of the Company. This was after the signing of that temporary contract, and the transitional regime. Transitional regime used to enforced the amendments to Law 40/2007. Amendments that this law introduced in the area of partial retirement and relief contract. (Twelfth Transitional Provision of the Workers’ Statute).

In this regard, it should be noted that when the contract was signed, the Collective Bargaining Agreement for 2005-2008 was in force. The articles of the agreement provided that it would be in force until December 31, 2008. It was understood that it would be automatically extended if there were no denunciation, and in this case, the conditions agreed therein would continue to apply. These conditions will be in force until the approval of a new collective bargaining agreement. And, on the other hand, in matters of relief contracts. Contracts whose duration would be equal to the time remaining for the worker to reach retirement age.

Subsequently, the Collective Agreement for the years 2009-2012 is signed, registered and published by Resolution of 24.02.2010. In the articles it was stated that this agreement would have a duration of four years. This calculation would be from January 1, 2009 to December 31, 2012. Although, the economic conditions, the changes in workin hours and others changes introduced would be effective from its signature. Except where expressly stated otherwise. And regarding  relief contracts,i.e. situation in which a worker agrees to a partial retirement, a relief  full time agreement of indefinite nature would be formalized.

Add that the new agreement does not provide for the retroactivity of the modifications introduced. Neither in the area of partial retirement nor in the relief contract.

Well, starting from the referenced premises. The Chamber dismissed the appeal filed by the appellant, since:

1. We are NOT facing a new Collective Agreement that proclaims full retroactivity of all its clauses. (as of January 1, 2009). That is, it would be a new Collective Agreement that would not contain a full retroactivity clause. For situations that, arising during the term of the previous Agreement, could be affected by the subsequent one. The principle of non-retroactivity, whose original source is Article 9.3 of the Spanish Constitution, should prevail. This principle is enshrined in Article 2.3 of the Civil Code, which proclaims the general rule of non-retroactivity.
2. It can NOT be understood that after the effective date of the new Collective Agreement, and based on its content, the temporary relief contract transformed its character, ex lege, into an indefinite one. Since, the new Agreement opens the possibility that the previous situations can be covered by the new agreement ( i.e retroactivity). This must be expressly provided for. This must be done in accordance with the provisions of ex-Article 90.4 of the TE. This article states the date of entry into force, which is subject to the agreement of the parties negotiating the Convention.

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And this, in the understanding of the undersigned, since otherwise it would have meant a breach of the obligation of concurrence of Collective Bargaining Agreements. Established in Article 84 of the Workers’ Statute, and a breach of the principle of legal security. As well as a manifest illegality by affecting situations that occurred prior to its signing.

The ruling also addresses the issue of the impossibility of assessing the tacit retroactivity of interpretive norms. Norms that seek to eliminate past situations that are incompatible with the legal purposes pursued by the new provisions. Since the regulation contained in the Convention for 2005-2008 cannot be understood as being contrary to the regulations in force ( Contrary at the time of signing the temporary relief contract).

Likewise, we must remember that Law 40/2007 introduced modifications regarding partial retirement and relief contracts. But it should also be noted that a transitional regime was introduced to apply to those modifications. Specifically, in the Twelfth Transitional Provision of the Workers’ Statute: “the new legal regime of the part-time contract for partial retirement and the relief contract established in paragraphs 6 and 7 of Article 12 of the Workers’ Statute Law, in the wording given by the Law on Social Security Measures, will be applied gradually in accordance with the provisions of the seventeenth transitional provision of the General Social Security Law”.

The Seventeenth Transitional Provision of the LGSS, for its part, provided in paragraph 5 that “the legal regime for partial retirement in force on the date of entry into force of the Law on Social Security Measures may continue to be applied to workers affected by commitments adopted prior to that date, by means of collective agreements and arrangements. In these cases, the aforementioned regulations will apply until the end of the term of the aforementioned commitments and at the latest until 31 December 2009”.

In other words, at the time of signing the temporary relief contract, there was no legal obligation to formalize the contract for an indefinite period, since by virtue of the transitional regime provided for, the commitments adopted in collective agreements and arrangements prior to the entry into force of the Law could continue to be applied until the end of their validity, and at the latest, until December 31, 2009.

In conclusion, the Chamber understands that the dismissal of the worker on the date of her replacement contract coincides with the date of retirement of the replaced worker. Therefore, this termination must be declared as a valid contractual extinction of a temporary contract. It cannot be understood as an extinction decision of an indefinite employment relationship constituting a null dismissal.  Nor will it constitute an unfair dismissal, since the contract complied with the regulatory requirements at the time. As the duration of the contract was equal to the time that the replaced worker was missing to reach retirement. And it was not possible to affect it by a later regulation:

• Because this was not the will of the negotiating parties of the Collective Agreement.
• As a matter of doubtful legality, according to the principle of non-retroactivity, which governs our legal system.

If this article has been of interest, we also suggest you to read the following article published on our website: Jurisprudence on Exclusivity Pacts, non-concurrence and permanence in Spain. Limits and requirements