Employment annual report
All change?
Political upheaval in Spain and
Portugal means it’s possible that the
two countries’ labour laws could
change significantly in the coming
year – however, anxiety among
investors could be good news for
employment lawyers who will be
needed to provide advice on the
best way to proceed in an uncertain
climate
While clients are enjoying a little
more clarity with regard to what
employment rules and regulations
they must adhere to in Spain, it
would be wrong to say that all
doubt has been removed. Indeed,
the country’s Supreme Court has
been divided on the issue of how
it should interpret some elements
of the 2012 Labour Reform. If that
is not unsettling investors, perhaps
the prospect of a new labour law
being introduced in Spain after
the general election in December
2015. However, while clients may
have worries due to the uncertainty
surrounding employment
regulations, such uncertainty plays
into the hands of lawyers who will
be sought out by company bosses
seeking to put their minds at rest. It
is a similar story in Portugal where
the recent change of government
is expected to trigger significant
changes to labour laws.
Spain’s 2012 Labour Reform
intended to make collective
dismissals easier, but in practice
it often made them more difficult,
says Román Gil, partner at
Sagardoy Abogados. He adds
that this is partly because Spain’s
Supreme Court has not always been
able to solve some issues [created
by the Labour Reform] with enough
clarity “due to a split – which some
say is on ideological grounds –
on the adequate interpretation”.
Naiara Rodríguez Escudero,
counsel at Linklaters, says there is
“no consensus in parliament” with
regard to the Labour Reform, which
has also been “received terribly”
by trade unions. Cuatrecasas,
Gonçalves Pereira partner Juan
Bonilla says that a new government
following the elections in December
is likely to mean a “new labour
law”. He adds that consensus on
employment law is needed, though
the lack of consensus is “good for
44 • IBERIAN LAWYER • November / December 2015
lawyers”.
Gil says there has not been any
major new legislation in the last
year and thus there is more “legal
certainty” with regard to some
employment issues. However, in
collective dismissal procedures, it
is not clear what documents should
be provided, according to Gil. He
adds: “Unions ask for thousands of
documents, there are many hurdles
and if one hurdle is missed, there is a
problem.” Another issue is that some
of the minor trade unions are trying
to raise their profile and therefore
they “challenge everything”. Gil
adds there is a “fight among unions
to be the most radical”.
Unions more aggressive
Mario Barros, partner at Uría
Menéndez in Madrid, says that, in
collective dismissal cases, some trade
unions tend to face the negotiation
period as the preparatory stage for
a court case. He adds: “In light of
the number of judgments classifying
collective dismissals as void, some
trade unions are less prepared to
enter agreements.” However, with
regard to collective dismissals,
Bonilla says there has been a shift
in that unions no longer dispute
the business case for making
redundancies. Hogan Lovells senior
associate Vidal Galindo says that
one of the consequences of the most
recent employment reforms in Spain
regarding collective dismissals is that
the parties are now taking a different
approach to negotiation and “the
compensations agreed are lower
than before the reforms”.
The Spanish courts need to be
careful interpreting employment
law and be aware of how it may
affect potential investment in the
country because “the world is
looking at us”, according to Gil. He
adds: “It [company restructuring]
can be done in Spain and it can be
done at a lower price [than other
jurisdictions] – Spain is competitive
in terms of labour regulations, you
can do reasonable restructuring in
most cases.” David Díaz, partner at
Baker & McKenzie, says that, while
there is uncertainty surrounding the
interpretation of the 2012 Labour
Reform, it is “not preventing
foreign companies investing in
Spain”. With regard to the appeal of
Spain to foreign investors, PérezLlorca partner Fernando Ruiz
says employment laws are “more
flexible” in Spain than they are in,
say, France, for example.
Most of the largest corporate
restructurings have already taken
place and companies are now
“fine-tuning” their organisations
and implementing measures aimed
at reducing costs, but maintaining
levels of employment, according
to Galindo. He adds: “This is an
opportunity for lawyers. We can
be involved in projects designed
to improve the organisation and
companies’ situation.”
50 per cent rate cuts
Gil says there is strong competition
in the market for employmentrelated legal services and,
consequently, fees are going down,
with rates dropping around 30
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