In this information alert, we provide a summary of several recent court rulings, handed down between October and November 2024, which address key issues in the employment field. These decisions, issued by the Court of Justice of the European Union and the Supreme Court, address issues such as the procedure to be followed in the event of disciplinary dismissal, the information to be provided on the pay register, or the application of the Temporary Agency Workers Directive to companies that do not have this status under Spanish law. Through these rulings, important implications for employers and workers are outlined, as well as the current interpretations of the labour regulations in force in Spain. 

New jurisprudential updates

Ruling of the Supreme Court of 18 November 2024 (rec. no. 4735/2024)

This Supreme Court ruling introduces a change in the formal requirements to be followed in disciplinary dismissals. Specifically, it assesses the case of a teacher who is disciplinarily dismissed for harassment of his female students. During the proceedings, the violation of article 7 of ILO Convention 158, which requires a prior hearing to be given to the employee when his or her contract is terminated for breach of contract. The Supreme Court understands in its judgment that this Convention is directly applicable in Spain and, therefore, that the prior hearing must be respected even though it is not expressly provided for in national labour legislation. 

Ruling of the Supreme Court of 21 November 2024 (rec. no. 218/2023)

The Supreme Court analyses whether, under the rules on the remuneration register (article 28.2 ET and Regulation 902/2020), there is an obligation to provide individualised remuneration information, so that the person behind the remuneration can be identified. The High Court understands that the regulations on the remuneration register do not provide for the obligation to provide individualised information, but rather to provide the average values broken down by sex according to the professional classification of the company. It also points out that providing individualised salary information on the basis of article 28.2 ET could violate data protection regulations, since there is no legal basis that expressly permits the provision of such information.

Ruling of the Supreme Court of 30 October 2024 (rec. no. 1271/2023)

The Supreme Court analyses whether the failure to simultaneously deliver a copy of the letter of objective dismissal of an employee to the workers' representatives means that the dismissal is considered unfair. In this case, the company had delivered a copy of the letter of objective dismissal to the works council 5 working days after the letter of dismissal had been delivered to the employee. In the appeal, this fact led the High Court of Justice of the Valencian Community to classify the dismissal as unfair. 

Ruling of the Supreme Court of 16 October 2024 (rec. no. 211/2022)

The Supreme Court analysed whether a radio and television company had infringed the right to strike by replacing the regular presenter of a radio programme who was exercising her right to strike with another person of the same professional category who did not assume that responsibility on a regular basis, in what is known as internal scabbing. The Supreme Court understands that there has been a violation of the right to strike because this substitution did not obey any of the cases in which this is permitted: for minimum services and/or for security and maintenance services in the company. Therefore, it understands that the company should not have broadcast the programme, in such a way that by replacing the presenter with another person, the right to strike was violated.

Ruling of the Court of Justice of the European Union of 24 October 2024 (C441/23‑)

The Court of Justice of the European Union (CJEU) has given preliminary rulings on questions referred for a preliminary ruling by the Tribunal Superior de Justicia de Madrid (High Court of Justice of Madrid) concerning Directive 2008/104 on temporary agency work. In this case, the question referred for a preliminary ruling concerns a worker who provided services for Microsoft and was formally hired by a contractor (not a temporary employment agency). 

Legislative updates

Organic Law 5/2024, of 11 November, on the Right to Defence

This regulation includes an additional provision that develops the right of indemnity of workers and their families against the unfavourable consequences that they may suffer as a result of any claim they may make against the company regarding their labour rights.

The main objectives of the law are: to promote the circular bioeconomy, to structure a more efficient management of resources and to raise awareness and inform both food chain actors and consumers. It also aims to establish structural amendments in the food production, processing and supply chain to ensure strict compliance with the objectives.
 

The law consists of 19 articles structured in six chapters:
 

• Chapter I is dedicated to the general provisions, where the object and scope of application of the law is established.
   
• Chapter II regulates the obligations of the actors in the food supply chain.
   
• Chapter III establishes recommendations for Public Administrations, companies selling to the final consumer and the catering sector, based on a set of good practice measures.
   
• Chapter IV focuses on the rationalisation of best-before dates to help prevent and reduce food losses.
   
• Chapter V sets out a series of tools to reduce these problems, including a strategic plan detailing waste policy, guidelines for regional programmes and minimum targets to be met.
   
• Finally, Chapter VI of this law sets out the sanctioning regime. It classifies infringements and details the basic penalties in this area, so as to ensure a wide margin for the autonomous regions to decide what their system of infringements and penalties should be.
   

This regulation represents a significant step forward in the fight against food waste. It establishes obligations and recommendations for all actors in the food chain and poses a challenge for businesses, which will have to adapt to the new requirements. It is essential to closely monitor its evolution and the impact it will have on the market, both in terms of sustainability and business competitiveness.

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Our labour law partner, Alberto Novoa, and senior associate, Rubén González, have published the book ‘Modalidades procesales: tutela de derechos fundamentales y procesos de índole colectiva (conflictos, convenios)’.

This work, which forms part of the collection Los Diez Esenciales de Aranzadi sobre el Proceso Laboral (book number 5), offers a detailed explanation of the essential aspects of each procedure, deals with specific situations and compiles ordinary and constitutional case law to complete any regulatory analysis. The collection is coordinated by Antonio V. Sempere Navarro and is a joint project between ASNALA and Aranzadi.

Link to publication (available in Spanish)

On 2 October 2024, the General Court of the European Union (‘GC’) delivered its judgment in case T-126/23, VC/EU-OSHA.

In this important judgment, the GC has ruled on the significant effects that any sanction adopted by a national competition authority may have on any undertaking seeking to operate in the field of public procurement at European level, in application of the provisions of the Financial Regulation.

Although the GC's judgment is not final - it may be subject to appeal to the CJEU - the conclusions contained therein have major practical implications.

In the case before the GC, the Comisión Nacional de los Mercados y de la Competencia (‘CNMC’) sanctioned a certain entity (‘VC’) for an infringement of Spanish and European antitrust law. The aforementioned entity appealed the CNMC's Resolution before the Audiencia Nacional, filing a request for a precautionary suspension of the enforcement of the Resolution (which was granted by the Audiencia Nacional).

At the same time, that entity submitted a financial bid for one of the lots in a call for tenders issued by the EU-OSHA (European Agency for Safety and Health at Work) for the provision of web services and information and communication technologies. However, EU-OSHA considered that the infringement of antitrust rules sanctioned by the CNMC in Spain was to be considered as ‘grave professional misconduct’ under the Financial Regulation. On that basis, it decided to exclude the company from the tendering procedure in question, as well as to exclude it from any tendering procedure involving EU funds for a period of two years, and to record that fact in the database of the early detection and exclusion system.

The entity affected by that decision challenged it, alleging infringement of its right to effective judicial protection, inasmuch as a sanctioning decision which was not final and which had been judicially suspended at Spanish level could not entail such serious consequences in the field of European public procurement. Furthermore, the appellant argued that it had adopted a proven competition compliance programme which should have been taken into account by the European authorities when imposing the exclusion.

The GC's conclusions have important repercussions on the application of exclusions from tenders (i.e. prohibition from contracting) at European level on the basis of national sanctioning procedures, as well as on the configuration and application in companies of compliance programmes in the field of competition that can serve to avoid the exclusion of companies in public procurement.

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Disclosure and compliance obligations are becoming increasingly important in the context of European regulation, and this importance is intensified when it comes to sustainability.

The Comisión Nacional del Mercado de Valores (CNMV) and the Instituto de Contabilidad y Auditoría de Cuentas (ICAC) have issued a joint statement in view of the possible failure to transpose the Corporate Sustainability Reporting Directive (EU) 2022/2464 (CSRD) and the European Sustainability Reporting Standards (ESRS) into Spanish law by 31 December 2024.

The CSRD replaces the previous Directive (EU) 2014/95/EU of 22 October, which introduced the obligation to include in the management report a statement of non-financial information (NFI) on environmental and social issues, as well as on personnel, respect for human rights and the fight against corruption and bribery.
 

The main considerations of this statement:

• Companies and their verifiers are advised, even if the CSRD is not transposed in time in the Spanish legal system, to prepare their annual sustainability report as of 1 January 2025 in accordance with the CSRD and the ESRS.
   
• CSRD broadens its scope compared to Law 11/2018
   
• The communiqué seeks the comparability of the reports published in Spain with those of the rest of the entities in the European Union and thus correctly assess the developments made in recent years.
   
• When drafting the Sustainability Report based on the CSRD and following the ESRS, it should be carefully assessed that the report continues to comply with the requirements of the current Law 11/2018, as there are transitional provisions and specific breakdowns not expressly contemplated in the ESRS.
   
• Given that Law 11/2018 already established the obligation to verify by an independent verifier the content of the ESRS, but did not indicate who could carry out this verification, nor the rules for its performance, nor its scope, until the ICAC's technical verification standard is approved, it is recommended that this verification be carried out by an independent third party.
   

In summary, as of 1 January 2025, and until the regulations transposing the CSRD are published and come into force, the CNMV and the ICAC recommend that companies that were or will fall within the scope of application of the future standard begin to present Non-Financial Information Statement (NFS) reports under the indications of the CSRD, the COESA guidelines and the IAASB international standard, as well as using the ESRS. This is provided that, after assessing the compatibility of these new considerations with the non-financial information in their reports, compliance with all legal requirements is ensured.
 

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This is an important legal provision, a consequence of the implementation in Spain of what is known as Pillar II of Action 1 of the BEPS Project, led by the OECD, which started remotely in 2008 and has been gradually developing since then. However, this legislative initiative has been more widely publicised in the media, not because of the tax itself, but because the government has taken advantage of its parliamentary processing to incorporate, by means of numerous amendments to the legal text, relevant modifications to other tax regulations, thus affecting taxes such as corporate income tax, personal income tax and excise duties, among others, and even incorporating the creation of new taxes. The parliamentary process has been intense, with meetings of the Finance Committee ending in the early hours of the morning and heated debates between the different parliamentary groups.

We will deal with these modifications in this Alert, leaving the complex Complementary Tax for a much more detailed analysis once its legal regulation has been definitively approved. It is now appropriate to rank those "additional" elements offered by the legislative initiative, as some of them are immediately, and even retroactively, applicable. To do so, we will use a classic scheme, tax by tax, ranking those provisions that will come into force in 2024. We will also include at the end a brief reference to the provisions that have not been approved by Congress.

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The sustainability report includes information on the company's impact on sustainability issues, as well as information necessary to understand how environmental, social, human rights and governance factors affect the performance, results and position of the company or group.

The project establishes a single EU-wide framework, with an electronic format to facilitate comparability. In addition, it regulates independent verification of the reports, similar to financial auditing. Companies will have to comply gradually from 2024, with mandatory dates varying according to size and business characteristics.

From 1 January 2024, the reporting obligation will start for large public interest companies and groups with more than 500 employees. From 1 January 2025, this requirement will be extended to all other large companies. In 2026, it will be the turn of listed SMEs, except for micro-enterprises, and other specific financial institutions. Finally, subsidiaries and branches of third country companies operating in the EU with a turnover of more than 150 million euros will have to comply with these obligations from 1 January 2028. This progressive roll-out is intended to give each type of entity time to adjust to the new transparency and sustainability regulations.

In conclusion, this legislation strengthens transparency and consolidates sustainability reporting obligations, making progress in their harmonisation, traceability and third-party verification, which will result in more uniform, reliable and useful information, according to its explanatory memorandum.

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The Constitutional Court has declared unconstitutional and null and void several precepts of Law 1/2022 of the Parliament of Catalonia, which amends Law 18/2007, Law 24/2015 and Law 4/2016, to address the housing emergency. The ruling, dated 8 October 2024, declared the following articles null and void:
 

1. Article 1.3
    
2. Paragraphs 1 and 2 of Article 12 and Transitional Provision.
    
3. Article 11 and Transitional Provision
    
4. Article 7
    

It is important to emphasize the Judgment, for which Judge Maria Luisa Segoviano Astaburuaga was the rapporteur, with four dissenting votes, in which it is stressed, among other issues, that the compulsory transfer of housing requires adequate compensation, by virtue of the provisions of art. 33 EC.
 

The unconstitutionality and nullity of the precepts will take effect from the publication of the ruling, except in the case of the nullity of article 7, which, being of a sanctioning nature, will also affect sanctioning procedures that are in progress at the time of its publication. For any question or clarification related to this ruling, please do not hesitate to contact our Real Estate and Construction Law Department.

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David Vegara, Chairman of the Advisory Board of RocaJunyent, invites us to read his Economic Note. In it, he analyses how Trump's recent re-election could brand a new era, with a more experienced and decisive administration, but facing a deeply divided country. This Republican triumph, driven by the discontent of sectors marginalised by technological change and previous economic policies, reflects a populist turn in the Republican Party, which could transform both domestic policy and international relations. Trump's protectionist and transactional vision poses significant challenges: his tariff approach could raise the costs of imported goods in the US and affect the Federal Reserve's monetary policy. Also, his expansionary fiscal policy and rising public debt add uncertainty about long-term interest rates, which could destabilise markets.
 

In Europe, a more isolationist US approach to defence and security would force the European Union to reconsider its common policy in these areas, although without a clear consensus among member states.
 

Finally, although the Spanish economy shows dynamism, it will not be exempt from the effects of this complex global context, with lower growth forecasts for 2025.

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