Succession and transfer of businesses in Spain

AutorManuel Luque Parra - Anna Ginès i Fabrellas
Páginas33-42

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Introduction

Prior, in the Spanish legal system, article 44 of the Workers’ Statute (Royal Legislative Decree 1/1995, March 24) (ET, hereinafter) expressly regulates the case of succession and transmission of companies and the labor consequences derived from this circumstance. This regulation transposes into national law the EU regulation regarding this matter: Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses.

In summary, it can be stated that when a «transfer of business» occurs, the legal regulation recognizes workers affected by this process a set of legal guarantees, which can be summarized in (i) the prohibition of the termination of their employment contract without another cause different from the transfer of the business, (ii) maintenance of their working conditions, including the collective bargaining agreement applicable prior to the transfer and (iii) joint liability of the transferor and transferee regarding labor and Social Security debts existing prior to the transfer.

1. b What is the national law that implements the Council Directive 2001/23/EC?

Article 44 of the Workers’ Statute. An article whose current wording dates from the reform introduced by Law 12/2001, so as to adapt its content to the provisions of EU Directive 2001/23/EC. Not having suffered, since then, any other legislative reform.

2. What are the situations that determine the situation of «transfer of businesses»? How does the legal system in your country regulate the phenomenon of a transfer of business established in a collective bargaining agreement? And how does it regulate the situation of transfer of business derived from a transfer of a group of workers?

The Spanish regulation on this issue is as follows:

· Productive autonomy of the transferred undertaking, business or part of company

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Workers’ Statute Council Directive 2001/23/EC
Article 44.2: For the purposes of the provisions of this Article, it will be considered that there exists a transfer of business when the transfer affects an economic entity which retains its identity in the sense of a group organized resources necessary to develop an economic activity, essential or accessory. Article 1. (a) This Directive shall apply to any transfer of an undertaking, business, or part of an undertaking or business to another employer as a result of a legal transfer or merger.
(b) Subject to subparagraph (a) and the following provisions of this Article, there is a transfer within the meaning of this Directive where there is a transfer of an economic entity which retains its identity, meaning an organized grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.
(c) This Directive shall apply to public and private undertakings engaged in economic activities whether or not they are operating for gain. An administrative reorganization of public administrative authorities, or the transfer of administrative functions between public administrative authorities, is not a transfer within the meaning of this Directive.

Article 44 ET, in its wording since 2001, captures perfectly the essential elements that in the EU regulation define the case of transfer of businesses, namely that the transferred entity maintains its own identity so as to allow for it to carry out an economic activity.

Obviously, there exist no problems when the object of transfer is an entire undertaking, business or company or a part of such, as the "productive autonomy of the transferred- is beyond doubt. The problem arises when the object of the transfer is a part of a workplace, an activity or production line that develops in part of a workplace. In these cases is when legal disputes emerge, which examine whether such transferred economic entity can by its self be exploitable in the market (that is, if it can carry out an economic activity).

At this point, it is important to note that the autonomy or exploitable character in the market of the transferred economic entity must be prior to the transfer, not existing a case of article 44 ET when such autonomy is only achieved after the transfer when joining other productive elements of the transferee, with which obtains the productive autonomy it lacked in origin (decision CJEU March 6, 2014, C. 458/12, case TelecomItalia).

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· Business transfer by express provision in collective bargaining agreement

In those activities where the relevant element lies primarily in the workforce (i.e. security, cleaning, maintenance, etc.), in Spain it is common for collective bargaining agreements, usually in the sector/industry level, to establish the new contractor to assume all or part of the outgoing contractor’s employees, in the case of change in the contractor providing the service (i.e. security, cleaning, maintenance, etc.) for another company (leading business).

In this case, unlike what happens in the cases of business transfer as a result of a transfer of a group of workers (next section), Spanish courts have accepted that the collective bargaining agreement can set the percentage of workers affected by the transfer...

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