Concerns continue over alleged ban on dismissals for Covid-19 reasons
The alleged ban on dismissals continues to be subject to contradictory interpretations by labour courts. In times of economic doubt, the controversial clause that aims to limit dismissals is generating legal uncertainty for both companies and workers. For the time being, contradictory rulings continue to be handed down while waiting for the Supreme Court to unify the criteria to be applied.
Royal Decree-Law 9/2020, of 27 March, which adopted complementary measures in the labour sphere to mitigate the effects of COVID-19, established in Article 2 that “force majeure and the economic, technical, organisational and production reasons for the suspension of contracts and reduction of working hours provided for in Articles 22 and 23 of Royal Decree-Law 8/2020, of 17 March (ERTE COVID), organisational and production causes which are the basis for the measures to suspend contracts and reduce working hours provided for in Articles 22 and 23 of Royal Decree-Law 8/2020, of 17 March (ERTE COVID), may not be understood as justifying the termination of the employment contract or dismissal”. This provision limited the cases in which companies can proceed to make redundancies.
The validity of this precept, which was initially foreseen during the state of alarm for the management of the health crisis caused by COVID-19, has been extended and, by virtue of the provisions of article 3.6 of Royal Decree-Law 2/2021 of 26 January, will continue until 31 May 2021, although it cannot be ruled out that it will be extended again.
Thus, the High Court of Justice of Madrid, in a judgment of 25 November 2020, analysed a case in which a company – dedicated to the management of incidents related to the purchase and sale of tickets for public events – undertook a collective dismissal due to the loss of a contract, concludes that although this would have constituted a legitimate cause for dismissal before the COVID-19 pandemic, in the current scenario it does not justify it, given that it cannot be ignored that this loss is due to the aforementioned health crisis, which has led to the reduction, and even suppression, of these shows. He concludes that the dismissal must be declared unlawful as unjustified, but not null and void.
For its part, the High Court of Justice of Catalonia, in its judgment of 11 December 2020, analyses a case in which a company whose activity is related to the tourism sector also carries out a collective dismissal based on the termination of the commercial contract for the provision of services that linked it to the tour operator that was its main client. The court concludes that article 2 of Royal Decree-Law 9/2020 is not applicable, as this is only foreseen for cases in which the loss of activity is a direct cause of the COVID-19 and, in this case, the termination of the contract is, even if the mediate or ultimate cause could be the aforementioned health crisis. Therefore, the company having accredited the concurrence of the objective cause and the fulfilment of the formal requirements demanded in the trial, it declares the collective dismissal to be in accordance with the law.
The aforementioned judgment includes an extensive dissenting opinion in which one of the judges of the court sets out the reasons why he considers that, given that the objective causes on which the company based the collective dismissal are related to COVID-19, Article 2 of Royal Decree-Law 9/2020 was applicable and, therefore, measures to suspend contracts or reduce working hours should have been implemented and, as a collective dismissal had been processed, it should be declared null and void due to fraud of law or, alternatively, not in accordance with the law.
In 2021, the High Court of Justice of the Basque Country, in a judgment of 26 January, upheld the appeal filed by a dismissed worker against the judgment handed down by Bilbao Social Court no. 6 which declared the dismissal to be justified. The court overturned the judgment, declaring the contractual termination null and void.
The Social Court concludes that, although the company, in order to dismiss the worker, adduces objective economic reasons and provides figures prior to the pandemic, it does so with the sole objective of trying to avoid or circumvent the application of the “prohibition” of dismissal in the aforementioned article 2, which constitutes a fraud of law which, in its opinion, must lead to the classification of the objective dismissal as null and void.
Therefore, given that the conclusions reached in the rulings handed down so far by the different High Courts of Justice could not be more disparate and that it is more than foreseeable that new contradictory pronouncements will be handed down throughout the national territory, to put an end to this uncertainty we can only wait for the High Court to unify criteria.