New guidelines for the calculation of collective redundancy thresholds

Written on 24 Nov 2016

The Supreme Court confirms that a double calculation should be applied: at company level according to the Workers´ Statute and at workplace level in accordance with the same concept established in Directive 98/59.

In accordance with the Workers´ Statute and the interpretation given so far by the Supreme Court, it seemed clear that the reference to be taken into account was the company -and not the workplace- in the calculation of the thresholds that determine the obligation to carry out a collective dismissal where the dismissal of employees is due to economic, technical, organisational or productive reasons. Although in this regard Directive 98/59 refers to the workforce in the workplace, the Spanish Legislator opted to consider the entire workforce of the company implied an additional protection for workers it being a much broader reference.

However, the Judgement of the Supreme Court of October 17, 2016, pursuant to various rulings of the Court of Justice of the European Union (CJEU) in 2015, for example the judgement of the “Rabal Cañas” case of 13/5/2015, modifies the criteria and establishes a new calculation for the purposes of the thresholds for collective redundancies.

Taking into account the above, the dismissal procedure established in the Workers´ Statute should be followed providing that the employees affected by the redundancies exceed the following percentages:

  1. Ten employees in companies that have less than one hundred employees.
  2. 10 per cent of the number of employees in those companies which have between one hundred and three hundred employees.
  3. Thirty employees in those companies that have more than three hundred employees.

The change proposed by the Supreme Court is that, in those cases in which the thresholds are not exceeded at company level, it will be necessary to analyse whether they exceed the workplace level according to the definition of workplace in Directive 98/59. The concept of workplace referred to in article 1.1 of Directive 98/59 refers exclusively to the centres in which there are more than 20 workers.

As a result, before carrying out redundancies for economic, technical, organisation or production reasons, companies should analyse a double calculation. Firstly, assess whether the above thresholds are exceeded at company level because if so, the collective redundancy procedure should be initiated. Secondly, if they are not exceeded, the same analysis would have to be carried out at workplace level, provided that there are at least 20 workers at said workplace. If they were exceeded at workplace level, companies would also be obliged to initiate the collective redundancy procedure.