Collective redundancy consultation

Following a recent preliminary referral and ruling from the European Court of Justice, employers in Spain will have to carry out a double assessment when considering whether or not collective redundancy consultation obligations have been triggered. This is because there is a discrepancy between the meaning of “collective redundancies” under European Union and Spanish law.

In terms of European law, redundancies are defined as redundancies effected by an employer for one or more reasons not related to the individual employees. There are two options which Member States can choose between when defining when collective consultation obligations are triggered.

The first option is that collective consultation obligations are triggered where the number of redundancies over a period of 30 days reaches either:

  1. 10 in establishments normally employing more than 20 and less than 100 workers;
  2. 10% of the number of workers in establishments normally employing at least 100 but less than 300 workers; or
  3. 30 in establishments normally employing 300 workers or more.

The second option is that collective consultation obligations are triggered where the number of redundancies over a period of 90 days is at least 20, whatever the number of workers normally employed in the establishments in question.

Spain has not implemented either of the options outlined above. Instead, under Spanish law, collective consultation obligations are triggered in circumstances where, within a period of 90 days, it is anticipated that the number of dismissals for economic, technical, organizational or production reasons will be:

  1. 10 in businesses with less than 100 employees;
  2. 10% in businesses and employing between 100 and 300 employees; or
  3. 30 in businesses normally employing 300 employees or more.

The essence of the question before the European Court of Justice was whether, when assessing whether the collective redundancy consultation obligations have been triggered, employers in Spain should be counting the number of redundancies in each “establishment” (as required by European law), as opposed to the number of redundancies across the business in Spain as a whole (as required by Spanish law).

The European Court has stated that if the application of national law and the unit of reference being “the business” impedes the rights to collective consultation set out in the Directive, then consideration should be given as to whether collective consultation rights are triggered either under the Directive or Spanish national law.

In practical terms the conclusions are as follows:

  • If the proposed collective dismissal affects fewer than 20 employees, Spanish national law may apply but European law will not apply because the Directive only affects workplaces with 20 or more employees.
  • If the proposed collective dismissal affects more than 20 employees, a double analysis will need to be undertaken to see whether collective consultation obligations are engaged either as a result of counting the number of proposed dismissals in the “business” (as required by Spanish law) or “the workplace” (as required by European law).

This may mean that in the future legislative changes are introduced to clarify the position in Spain.