The High Court of Justice of the Basque Country has widened the impact of the judgment delivered by the Court of Justice of the European Union (CJEU) on 14 September concerning discrimination against temporary employees upon termination of their employment relationship in comparison with permanent employees to the private sector, granting the right to compensation of 20 days’ salary per year of service upon termination of a specific works or service contract with a private entity.

Judgment delivered by the High Court of Justice of the Basque Country on 18 October 2016 >>

As opposed to the case analysed by the CJEU –in its judgment dated 14 September 2016–, the vertical effect of a Directive did not apply to the case heard before the High Court of Justice of the Basque Country since it was not related to a public authority in the broadest sense.

On the contrary, given that the case was between private parties, the judgment analyses the so-called horizontal direct effect of the Directives. In addition, the Basque Court believes that the conclusions reached by the CJEU also apply to this case even though the contract in question was categorised as an interim agreement, as opposed to one entered into for specific works or services.

In such regard, when the company decides to unilaterally terminate the employment relationship on legally justified grounds and, therefore, reasons other than the employee’s will, there is a likeness in the nature of the termination in the case of both permanent employees and those with fixed-term contracts.

In essence, there is a clear distinction in relation to the treatment of the employee under a specific works or services contract given that the difference in compensation would remain substantial –12 days as opposed to 20 days’ salary per year of service–, for which there are no justifiable grounds. 

By way of conclusion, there is no objective and reasonable justification for an employee under a temporary works or services contract not to receive the same compensation as a permanent employee dismissed on objective or production grounds, given that the reason for termination is identical.