On 7 July 2012, Law 3/2012, which introduces urgent measures for labour market reform, was published in the Official Gazette.

Law 3/2012 is similar in content to the Royal Decree (3/2012 of 11 February), but it introduces some amendments, the most relevant of which are summarised below:

Paid leave for training:

The Royal Decree introduced paid leave for employee training of up to 20 hours per year, for a period of up to three years. Law 3/2012 has now increased the period over which an employee can take paid leave for training from three to five years.

Irregular distribution of working hours: Under the Royal Decree companies were given the flexibility to alter up to 5% of annual working hours.  Law 3/2012 has increased this percentage to 10%, provided there is no collective bargaining agreement or agreement between the employer and employee representatives which provides otherwise.

Definition of economic, technical, organizational and production causes:

Law 3/2012 clarifies the definition of 'economic causes' which is relevant in so far as employers can justify:

  1. suspending the employment contract and reducing working hours;
  2. failing to abide by the terms and conditions set out in an applicable collective bargaining agreement; and
  3. making collective redundancies.

It is now clear that the words indicate a "persistent decrease in the level of incomes and sales"  by reference to "ordinary" income. Furthermore, the decrease must be evident over two consecutive quarters if an employer wishes to suspend an employment contract, reduce working hours or disapply minimum conditions contained in an applicable collective agreement. The decrease must be evident over three consecutive quarters if an employer wishes to make collective redundancies. Whether the definition is fulfilled is determined by reference to the equivalent quarters of the previous year.

Collective dismissals:

Law 3/2012 has introduced some modifications to collective dismissals carried out pursuant to Section 51 of the Workers Statute and to the judicial process involved in challenging such dismissals:

  • A new provision (yet to be adopted) will establish what documentation is needed to start the consultation period with workers' representatives. The new requirements are due to come into force within one month of Law 3/2012 coming into force but have not been published as yet.  
  • The parties will be able to agree to replace the consultation period for a mediation and arbitration procedure at any time.
  • Following a joint request by the parties, the Labour Authority will be able to mediate during the consultation period in order to find solutions to the problems.  
  • An affected employer will be able to seek a judicial declaration that it has acted lawfully providing this is applied for within 20 days of the end of the 20 day period within which employee representatives can challenge the employer's decision.