Payment limits by FOGASA

The TS declares that when a company is in a bankruptcy proceeding, has been declared insolvent or disappeared, it is impossible to readmit, and has not appeared in court, the FOGASA can anticipate the option between compensation or readmit that corresponds to the employer, and therefore, limit the accrual of processing salaries.

The company, in a situation of bankruptcy, proceeds to the business closure after dismissing workers for objective reasons. The workers submit a dismissal request that the Labor Court considers declaring the dismissals unfair. In addition, given the impossibility of reinstatement, it declares the contracts extinguished and condemns the company to pay the corresponding compensation as well as the processing salaries accrued up to the date of the judgment.

The FOGASA files a request for appeal against this decision. Complaint that in the trial act he expressed the anticipated option for compensation for the case of declaring unfair dismissal, and in accordance with this option, the termination of the contract must be understood to have occurred on the day of actual termination at work, and therefore the sentence to pay processing fees is not applicable. The TSJ Galicia dismisses the appeal, considering that the exercise of the right of advance option is not within the procedural powers that are attributed to FOGASA, but is the exclusive right of the employer. The FOGASA appeals in cassation for the unification of doctrine.

The TS rejects that the right to advance option can not be extended to FOGASA due to lack of entrepreneur status. The FOGASA, as a subsidiary guarantor of the amounts owed by the employer in case of insolvency, can take the place of this in the procedure. This reinforces, in this way, the procedural position of the FOGASA that is authorized to urge in the process “what is convenient in Law”. In response to this circumstance, the TS considers feasible that FOGASA can exercise the right of option in advance when the following circumstances concur simultaneously:

– That the company has not appeared at the trial.

– That they are companies that are involved in insolvency proceedings, declared insolvent or missing and that the company has closed its activities and reinstatement is impossible or difficult to complete.

– That the holder of the option was the employer (and not the worker).

– That the FOGASA has appeared in the procedure at the time of making the option.

STS Room 4 Plenary of March 5, 2019. EDJ 2019/536738