The Court of Justice of the European Union (CJEU) has published a recent ruling that could shake the labor market in Spain. The resolution opens a debate of enormous importance on what should be understood by a Temporary Employment Agency (ETT), with a broad interpretation of the European magistrates and which calls into question whether it can be limited to that regulated in Spain. That is, it could be extended to other types of companies, expressly pointing out subcontractors in certain cases. Thus, its employees would have the right to receive the salary of the main company.
The ruling, dated October 24, addresses a preliminary ruling raised by the Superior Court of Justice of Madrid regarding a worker in Spain of a subcontractor (LeadMarket) that provides services to Microsoft. After interning at Microsoft, the employee worked for three subcontractors, always for the technology multinational.
The worker became pregnant in 2020 and in the seventh month of pregnancy, Microsoft, “invoking budgetary reasons,” informed Leadmarket that the service provision contract between those two companies “would not be extended.” When the affected woman returned from maternity, breastfeeding and vacation leave, the subcontractor fired her for objective reasons, alleging “a decrease in demand due to drop of projects”.
The worker claimed in court that the dismissal be declared void and that LeadMarket be condemned, and as a co-defendant Microsoft, “because they considered that in reality it was a matter of making her available to provide her services in said company,” says the professor. of Labor Law Eduardo Rojo in his blog, in which he analyzed the sentence.
A labor court declared the dismissal void, but only condemned the subcontractor, because it considered that there was not a provision of personnel, but rather a legal subcontracting, and therefore exempted the multinational from responsibilities towards the worker. The affected party appealed the ruling and it is the TSJ of Madrid that raises several preliminary questions to Europe on what can be understood by “making available” and by an ETT, in order to comply with European regulation on issues as relevant as the right to salary. of the main company.
Expansion of what is an ETT in Spain?
The verdict of the European magistrates is very relevant because it offers a fairly broad interpretation of what can be considered an ETT, expanding the concept (and its obligations) to other cases, such as a certain type of subcontracting.
In Spain, there is an obligation for ETTs to have an administrative authorization that considers them as such. However, European justice warns that EU regulations on temporary employment agencies do not require this requirement.
Thus, requiring this authorization to apply the European regulation of ETTs, “on the one hand, would imply that the protection of workers would differ between Member States, depending on whether or not national laws require such authorization, and within the same Member State, depending on whether or not the company in question has such authorization,” say the judges.
Furthermore, they consider that “it could contravene the objectives of said Directive, which consist of protecting workers assigned by temporary employment agencies, and, on the other hand, it would undermine the useful effect of the aforementioned Directive, by excessively and unjustifiably restricting the scope of application of this”.
Therefore, the CJEU opens the door for the regulation of temporary employment agencies to be applied to other companies if they comply with the European definition of these temporary employment agencies, with the key concept of “making available” personnel. And, at this point, he also makes a “very broad” reading of what can be understood by “making available,” assesses in his blog Ignasi Beltrán, professor of Labor and Social Security Law at the Open University of Catalonia (UOC). ).
In general terms, this provision of personnel could occur “in a very broad typology of entrepreneurs (natural and legal persons),” warns Beltrán, also cooperatives, “as long as they have the intention of making these workers available to a user company”. However, “it must be a habitual activity,” adds the professor in his analysis, among other defining elements pointed out by the CJEU, which places the key in “determining whether the user company exercises power of direction and control over the assigned worker.” ”. Checking whether this happens or not is up to the national courts.
Eduardo Rojo considers that the European ruling “may ‘open the melon’ of what should be understood by a temporary employment agency (ETT)” in Spain and generate multiple cases in the courts to claim, for example, the salary of the main company or that The main companies respond jointly in cases of dismissals and compensation of subcontracted employees, as in this lawsuit analyzed by the CJEU, he explains to elDiario.es.
Possible brake on subcontracting to precarize
The European ruling “is very relevant and could have a systemic effect,” considers Ignasi Beltrán. The specialist recalls that there are certain situations in which contractors or subcontractors are being used “to cover up a transfer of workers outside the legal regime of temporary employment agencies.”
It must be remembered that in Spain ETTs can transfer workers to a main company – on a temporary basis – and that the latter is the one that orders and controls the worker during the provision of services. Of course, the employee during that time has the right to certain minimums according to the European regulation of temporary employment contracts, transferred to Spanish regulation, such as receiving the salary of the main company.
In the case of contracts or subcontractors, the workers also provide services for another main company, but here the active command and control of the workers must rest with the subcontracting company. There cannot be a mere provision of personnel, since this would result in an illegal transfer of workers.
However, Professor Ignasi Beltrán emphasizes that national courts are interpreting the defining elements of contracts and subcontractors with increasing “laxity”, “admitting assumptions that should probably be subsumed under that of illegal assignment.” “For a long time, a commercial construct has been used to cover up situations of labor transfer, undermining the useful effect of the Temporary Employment Directive,” he considers.
The result is that subcontracting is being used on many occasions as an easy way to make employment precarious and not assume responsibilities for these personnel by the main companies. But the interpretation of this CJEU ruling could put a stop to this practice.
Beltrán emphasizes that, given “the factors describing the power of direction and control of a user company described by the CJEU, a priorithis doctrine could impact many contracts, even though domestic courts today would not classify them as an illegal assignment.”
Like Eduardo Rojo, the UOC professor considers that “it could be relatively frequent that new preliminary questions are formulated to the CJEU” after this ruling in which they consider “whether or not a provision” of subcontracted workers is taking place. . This could give them the right to receive the salaries of the main company, among other minimums of the European ETT regulations.
“The ruling is complex and can generate a broad legal interpretation,” considers Rojo, who warns that we will first have to wait for the ruling of the Madrid TSJ on this worker’s claim and also to see how other national courts interpret the resolution.
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