At a time when companies are immersed in the not-always-easy process of complying with the different labor obligations imposed by the recent reforms (registration of working hours, recording of salaries, etc.), a new formal issue has to be added to the list: to revise the pay slip structure to ensure that it has no defects that could make it invalid.

In its judgment of January 17, 2019, the Supreme Court confirmed the judgment given by the National Court on May 16, 2017 acknowledging the right of company staff to receive a pay slip that is clear and separates all the different items, in particular in cases of an increase or decrease in working hours or the receipt of supplementary sick leave items.

For both courts, the basis of said obligation is found in article 29.1 of the Workers’ Statute, which establishes the duty to use a «template that is sufficiently clear and separates the different amounts received by the worker and the legally applicable deductions». It therefore establishes that pay slips must comply with the template approved by the Ministry of Labor and Social Security, unless a different template is established under a collective bargaining agreement or, in the absence thereof, a company agreement with the workers’ representatives that is sufficiently clear and separates the different amounts received by the worker and the legally applicable deductions.

For this purpose, notwithstanding the powers granted by collective bargaining under the aforementioned article, an Order dated December 27, 1994 established a template for individual pay-slips. The Order schedule included a template –modified by Order E55/2098/2014 of November 6, 2014- that must be used by companies in the absence of an agreement otherwise, to ensure that there is a record of the worker having received the amounts paid and the proper degree of transparency to enable workers to understand the different items paid and deducted.

According to the Supreme Court. Workers cannot be obliged to control the number of days and hours worked, nor to make more or less complex mathematic calculations to check that the company is paying them correctly. This would be in breach of the principle of transparency that must preside over a labor relationship and the drafting of contracts and other related documents. Pay slip content must enable easy understanding of the items paid and how each one is calculated, by performing a minimum number of mathematic operations, in such a way that workers are informed, at least on a monthly basis, of the different items resulting in their particular remuneration.

This obligation is not met if the pay slip amount is specified as a lump sum, contains weighted averages or does not specify the type of supplement applied to the worker for each day he/she was on sick leave, or does not differentiate between the amounts paid for each type of hour worked.

The issue requires special attention by companies, especially those in which, due to the nature of the services, it is common for working hours to increase or decrease with respect to those initially contracted, as well as those that pay different salary supplements depending on the service provided. Nevertheless, absolutely all companies must ensure that they comply with the obligation.