Dismissal for economic reasons: How is the decrease in income credited?

The Supreme Court, in its judgment of June 26, declares that in individual dismissal for economic reasons, it is not required to prove the decrease in income by submitting the annual accounts. Probatory freedom governs in this matter, being suitable the quarterly VAT returns of two successive years from whose comparison the persistent decrease in income is inferred.

A worker challenges her objective dismissal for economic reasons, which is declared inadmissible in the first instance. The TSJ Madrid, after accepting the review of the facts integrating the quarterly VAT returns provided by the company, confirms the judgment of instance. It considers that, despite the VAT returns reflecting a decrease in income, they are insufficient to prove the existence of economic causes since no social accounting or explanation of such omission is provided.

The company appeals in cassation for the unification of doctrine raising 2 questions:

1. If the judgment of the Madrid Supreme Court incurs inconsistent omission for not ruling on one of the motions of the appeal relating to the recalculation of the corresponding compensation based on the seniority of the worker. In relation to this question, the Supreme Court observes the existence of an omission incongruity by mistake, inasmuch as in its legal basis it admits that the computable seniority for the purpose of calculating the severance pay is that postulated by the company, and yet it does not express or reflect in the ruling, no pronouncement in this regard.
2. Complaint violation of the right to effective judicial protection in its aspect of using all relevant evidence for the defense, given that the judgment of the Madrid Supreme Court has understood that the evidence provided by the company is insufficient to prove economic causes.

In accordance with art. 51.1 of the ET, it is understood that economic causes concur when a negative economic situation emerges from the company  data.a in cases such as the existence of current or anticipated losses, or the persistent decrease in its level of ordinary income or sales. In any case, it is understood that the decrease is persistent if during three consecutive quarters the level of ordinary income or sales of each quarter is lower than that registered in the same quarter of the previous year. The requirement to provide the annual accounts for the last two fiscal years is not inferred from this regulation. This is a documentation required by the Regulation of collective dismissal procedures (RD 1483/2012) from whose articles it is not inferred that it is also applicable to individual dismissals for objective causes such as that analyzed in the case of fact. Nor is this documentation an exclusive supporting element.

The Supreme Court considers that the  principle of evidentiary freedom governs in this matter , as the tax returns for 2014 and 2015 are suitable, from whose comparison the persistent decrease in income is inferred. The concurrence of the economic cause is not enervated by the persistence of a favorable balance in the final result since the persistent decrease is, by itself, one of the assumptions provided for in the law.

For this reason, the Supreme Court considers the appeal for the unification of doctrine and agrees the origin of the objective dismissal and the regularization that results from the compensation amount.