Spanish labour law was shot down as a result of two recent rulings delivered by the Court of Justice of the European Union (CJEU) following preliminary references made by Spanish courts.
The first case dealt with the employment conditions of fixed-term workers. Under Spanish employment law, workers employed on indefinite basis are entitled to 20 days’ salary per year of service if their employment is terminated on objective grounds, fixed-term workers are entitled to 12 days’ salary per year and workers engaged on temporary replacement contracts are not entitled to any compensation.
The High Court of Madrid referred a case filed by a worker employed by the Spanish Ministry of Defence who had been retained on a series of temporary replacement contracts for a number of years. She instituted proceedings against her employer following termination of her contract and sought compensation.
Given that there were no apparent objective grounds to justify the difference in treatment to compensation following termination of employment, the Spanish court sought clarification from the CJEU as to whether Spanish legislation was contrary to the non-discrimination principle enshrined in the directive dealing with fixed-term work. The latter provides that fixed-term workers cannot be treated less favourably than comparable permanent workers unless such different treatment is objectively justified.
The Luxembourg court considered that entitlement to compensation on expiry of temporary contracts was an employment condition. It further established that there was a difference in treatment under the applicable Spanish statute between employees on temporary contracts and those on permanent contracts, as the former were not entitled to receive any compensation upon the expiry of their contract, unlike comparable employees employed on indefinite basis.
It was made clear that independently of the type of the employment contract, employees that essentially perform the same work or duties are entitled to be treated in a comparable fashion. The court deemed that the Spanish legislation was contrary to EU law to the extent that it permitted different treatment where the situation of the employees was comparable.
The system used to calculate the compensation payable to employees upon the expiry of temporary replacement contracts established in Spanish labour law was considered legally flawed and contrary to the EU directive since it denied employees any compensation upon the expiry of their employment contract while it granted compensation to comparable workers on indefinite basis. The court pointed out that a national law or collective agreement establishing such difference, or the temporary nature of the employment, did not suffice as objective reasons for the difference in treatment.
The second case dealt with successive employment on fixed-term contracts. Spanish legislation does not provide for limits on the duration or number of renewals of fixed- term contracts. A Spanish nurse had been successively employed by the University Hospital of Madrid on short fixed-term contracts to provide services of a temporary, auxiliary or extraordinary nature for around four years.
In March 2013, when her last contract expired, she pursued an appeal against her employer’s decision to terminate her employment, arguing that her successive appointments were not intended to meet an auxiliary or extraordinary need of the health sector but, in fact, corresponded to a permanent activity.
The Madrid Administrative Court made a reference to the CJEU seeking clarification on whether Spanish legislation that allows the renewal of fixed-term contracts in the healthcare sector infringes the EU directive pursuant to which member states must introduce measures to prevent abuse arising from the use of successive fixed-term employment contracts.
The Court of Justice examined whether an objective ground could justify the successive appointments of the nurse by the hospital. While the court acknowledged that temporary replacement of workers to satisfy temporary needs may constitute an objective ground and Spain was entitled to fill posts by hiring temporary staff without limitation as to the duration of contracts or number of renewals, it considered that EU law precludes national legislation that allows the renewal of fixed-term contracts to cover temporary staff needs when those needs are, in fact, permanent.
In this case, the successive renewal of the nurse’s fixed-term contracts was not necessitated by the temporary needs of the hospital as there was a structural deficit of health professionals throughout the healthcare sector in the Madrid region. Accordingly, the court found that Spanish legislation on this matter infringed the EU law on fixed-term contracts.
jgrech@demarcoassociates.com
Josette Grech is adviser on EU law at Guido de Marco & Associates.