Written by Josep Conesa
Employment and insolvency lawyer
On 16 July 2014, the Constitutional Court upheld key aspects of the Labour Reform, through ruling 119/2014, appeal 5603/2012:
1) permanent contract for entrepreneurs: the Constitutional Court upheld the one-year probationary period provided for in the new permanent contract designed to support entrepreneurs. Accordingly, a company that has engaged an employee under this type of contract may withdraw from the employment relationship within the first year of the contract without this being treated as a dismissal.
2) Opt-out from collective bargaining agreements (previously known as "descuelgue"): The Constitutional Court upheld the arrangement whereby the arbitration award issued by the National Advisory Commission on Collective Bargaining Agreements or the relevant regional body is the mechanism that determines a company's opt-out proposal, with no right of recourse to the courts by either party.
3) Company-level collective bargaining agreements: The high court also held that the priority given to company-level collective bargaining agreements introduced by the labour reform does not infringe the right to collective bargaining, the binding force of agreements, or trade union freedom. As a result, a company-level collective bargaining agreement will take precedence over sector-level agreements in the matters set out in the Workers' Statute: the amount of base salary and supplements, the job classification system, compensation for overtime, working schedules and the distribution of working hours, shift pay, holiday entitlement, the adaptation of contract types, and measures to promote work-life balance.
