“A la carte dismissal” or return to obscurity | Legal

Recent statements by Labor and Social Economy Minister Yolanda Díaz have rekindled the debate about what is popularly referred to as “à la carte” layoffs (or restorative or remedial layoffs). Severance pay will be adjusted according to personal circumstances, not objective criteria related to employment relationship, compared to the current system where salary and seniority are calculated objectively.

While not many details have been given about this so-called restorative or remedial dismissal, for now everything points to a system that will take into account different factors independent of the employment relationship, which can hardly be weighed outside of discretion. .

This is not a new approach. A similar system was in effect in the labor legislation before the 1980 Labor Act: The judge determines the compensation at his own discretion, within certain minimum and maximum parameters, according to criteria such as the ease or difficulty of finding another job, and pays wages to relatives. or length of service in the company.

With the advent of the Labor Code, these amendments and severance pay are objectified by creating a penal clause, in which, based on objective parameters (salary and seniority), the mechanism of compensation for damage caused by dismissal is predetermined. This provides indisputable legal certainty and relieves the worker of the obligation to prove damages and their amount in case of dismissal.

The controversy stems from a trade union’s complaint before the European Committee of Social Rights of the Council of Europe that the Spanish system did not comply with Article 24 of the European Social Charter and Convention 158 of the International Labor Organization. (ILO). For the union, the severance pay must be adequately reparative and proportional to the damage done to the worker, which is not possible with short seniority.

The solution to the problem does not seem to be to return to formulas of the past, based on discretionary decision, with a large component of uncertainty and revealing inequality among employees.

A system based on criteria that are not related to the employment relationship, such as age, may have inefficient solutions. For example, it can be understood that the damage to a worker close to retirement age will be less than that of a younger worker. This will likely result in a less beneficial outcome than the current standard, and may even result in no compensation being awarded if the worker has the option of full retirement. On the other hand, it may mean that some groups sought to be protected are at a complete disadvantage compared to others when hired, in order to avoid the higher costs of their dismissal.

Including other non-work-related variables, such as the number of children or family status, the cost of living in the place of residence, can also lead to bizarre results. This discussion will have other complex derivations, such as the fact that work of the same value should be paid (or compensated) differently depending on their personal and specific circumstances.

The current compensation system already has objective reference criteria with a rationale based on the terms of the employment relationship. This model has an undeniable value, which is legal certainty and security for both employers and workers.

Bernardo Pérez-Navas, partner in the Garrigues Department of Labor