Constitutional Court Supports the Labour Changes

18 July 2014

In July 16th the Constitutional Court by large majority declared constitutional key aspects of the Government’s changes to Employment regulation. Specifically, these are:

1. The one year probationary period for the new employment contract of indefinite duration for companies with up to 50 workers.
The Court concluded that the measure aims to make it easier for small and medium-sized enterprises to take decisions creating stable employment. At the same time, it enables the employer to determine if the job position is economically viable and therefore sustainable.
2.  The possibility that resolution of a dispute over non-application of a Collective   Agreement may be submitted to binding arbitration by a third party.
 The Court concluded that the possibility of intervention by the arbitrator is an exceptional measure which is justified, reasonable and proportionate.
3.  Giving priority to the implementation of agreements at company level over those at a higher level on certain matters.
The Court declared that the objective of the said measure is to safeguard the productivity and viability of the enterprise and, ultimately, to protect jobs.
It is the second time that the Constitutional Court has approved the big reformations to the labour rules.
This decision has not gone down well with either the Constitutional Court’s more progressive Judges, trade unions or the main opposition party (which has announced that if it becomes elected again it will abolish the changes). The “legal battle” which they have waged against the labour reformation does not end with this ruling, and they have indicated that they will be exploring other ways of opposition, such as appeal to international Courts. 

For further information, please contact Ana Gómez