Pérez-Llorca and CEOE discuss New Developments and Trends for 2025 in the field of dismissals

Pérez-Llorca and CEOE organised a conference to discuss the main developments in the field of collective and individual dismissals, analysing the challenges of the current legal regime. During the event, controversial issues arising from the abundant case law of the Court of Justice of the European Union and the Supreme Court that affect the legal regime of dismissal were discussed, as well as the challenges that the figure poses in terms of the balance between the rights of workers and the needs of companies, with the aim of providing clarity and promoting a better understanding of this matter among all the agents involved.

The session was opened by Luis Enrique Fernández Pallarés, partner of the Labour, Compensation and Benefits Department of Pérez-Llorca; Rosa Santos, director of Employment, Diversity and Social Protection of CEOE; and Yolanda Valdeolivas, Of Counsel of Labour, Compensation and Benefits of Pérez-Llorca.

Rosa Santos highlighted the signing of the V Agreement for Employment and Collective Bargaining (V AENC) ‘as another milestone in the bipartite social dialogue, which has provided a roadmap that negotiators have followed and has allowed for the recovery of purchasing power while keeping inflation in check’, stressing that ‘dismissal was a consciously neglected issue in the labour reform’. In this line, Yolanda Valdeolivas added that the Labour Reform of 2021 and the aforementioned V AENC determined a framework of consensus in which dismissal was not part of the structural framework agreed by the social partners. ‘It is transcendental to understand that labour relations must be approached in a transversal or holistic and unhurried manner’, he pointed out. For Valdeolivas, we are immersed in a period of ‘regulatory stress’ characterised by an alluvial accumulation of laws, precisely contrary to what is recommended by legislative action in this area.

For his part, Luis Enrique Fernández Pallarés pointed out that in recent months we have witnessed a series of pronouncements by the Supreme Court that have given rise to a framework of debate and uncertainty. For Santos, many of the regulatory changes have been implemented without having been subject to consultation or debate with the social partners, which has generated ‘legal uncertainty and difficulty in interpreting the regulations’. To conclude the first session, the Of Counsel of Pérez-Llorca emphasised the importance of a more reflective and collaborative approach in the creation of laws: ‘The rules must be matured, consulted and enriched by the different legal operators’, she added.

This was followed by the round table discussion ‘Collective dismissal: crucial legal and judicial aspects’, moderated by Valdeolivas and with the participation of María Luisa Segoviano Astaburuaga, Magistrate of the Constitutional Court and former President of the Social Division of the Supreme Court; Carles Frigola Barrios, Director of Labour Relations, Equality and Diversity at Air Europa; and Iván Gayarre, Partner of Employment, Compensation and Benefits at Pérez-Llorca.

Segoviano Astaburuaga explained the importance of systematising the regulation in order to achieve a balance in collective dismissals. He pointed to article 51 of the Workers’ Statute and article 24 of the European Social Charter as fundamental pillars. He also stressed that reaching an agreement does not guarantee that it complies with the law and urged companies to reinforce and specify the causes justifying the termination of jobs, avoiding generic formulations.

Along these lines, Frigola Barrios reinforced the need for clear and systematic regulation, considering that this is essential to guarantee a stable regulatory framework: ‘For companies, it is vital that the legal certainty enshrined in article 9.3 of the Spanish Constitution is guaranteed in the interpretation and application of labour regulations’. He also emphasised that this objective must be approached from various perspectives: social dialogue, improvements in legislative technique and clarity of jurisprudential criteria which, on occasions, go so far as to modify current regulations or very consolidated jurisprudence.

Finally, Gayarre favourably highlighted the recent Organic Law on measures for the efficiency of the Public Justice Service, which introduces the possibility for Labour Inspectors to participate in conciliation, mediation and arbitration activities in labour disputes, beyond their inspection function. ‘This measure allows the parties to appoint a Labour and Social Security Inspector during the consultation period, without affecting the final report of another inspector,’ Gayarre said. In addition, he proposed three legal reforms: to clarify the consultation periods and the appropriate time to carry out a collective dismissal in cases of article 44 of the Workers‘ Statute; to allow the Supreme Court to limit the retroactive effects of its changes of doctrine in cases of collective dismissal arising from judgments of the European Court of Justice; and to make it easier for the Wage Guarantee Fund (FOGASA) to advance workers’ compensation in judicially approved bankruptcy restructuring plans, with a reasonable time limit for repayment by the companies.

Following this debate, Fernández Pallarés led the panel ‘Unfair dismissal: new procedural and compensation aspects’, which included the participation of Ignacio García-Perrote Escartín, Judge of the Social Division of the Supreme Court; Ana Benavides Pizarro, Corporate Director of Labour Relations at Banco Santander; and Fernando Luján de Frías, Deputy Secretary General of UGT. The Pérez-Llorca partner presented the judgments of the Social Division of the Supreme Court of 18 November 2024, on the prior hearing in disciplinary dismissal, and of 19 December 2024, on the amount of compensation for unfair dismissal, which were discussed by the panellists.

García-Perrote Escartín underlined the clarity of article 7 of ILO Convention 158 examined by the judgement on the prior hearing, stating that ‘the company must give the worker the opportunity to defend himself before the end of the employment relationship, so there is no doubt as to when it should be held’. However, he pointed out that article 10 of ILO Convention 158 requires legislative development, with judgement 1350/2024, of 19 December, having confirmed that Spanish labour legislation respects the aforementioned article 10 of the ILO Convention. The judgment of 19 December 2024 could not analyse the compatibility of our labour legislation with Article 24 of the European Social Charter, because this provision was not in force in Spain when the dismissal in the case took place.

For his part, Benavides Pizarro highlighted the concerns that these rulings are generating in companies, especially in relation to the hearing procedure and the possible practical consequences that he believes could result from the alteration in the courts of the compensation set by national legislation. ‘There is a problem of legal certainty for companies,’ he said.

To conclude the session, Luján de Frías stressed the binding nature of the decisions of the European Committee of Social Rights. He stressed that Spain, in compliance with the commitments made when ratifying the international legal instrument published in the BOE on 11 June 2021, must ensure that the three branches of government - executive, legislative and in this case judicial - apply the Committee’s resolution of 20 March 2024, which resolved complaint 207/22 filed by UGT against the Kingdom of Spain, in accordance with the opinion of the Council of State.

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