It is relatively frequent for employers to prorate, on a monthly basis, the two special payments usually paid in the summer and at Christmas. But … when is it actually possible to do this legally?
To answer this question, we must first take a look at article 31 of the Workers’ Statute, which establishes the right to receive two special payments per year, one at Christmas and another at the time stipulated in the collective labor agreement or by agreement between the employer and the employee representatives, the most common scenario being for this special payment to be paid in the summer. Pursuant to article 31 of the Workers’ Statute, the payment of these special bonuses is to be prorated where so stipulated in a collective labor agreement.
Accordingly, pursuant to the Workers’ Statute, the general rule is for the full special payments to be paid separately from the ordinary salary, at Christmas and foreseeably in the summer, and special payments can only be prorated where so stipulated in the collective labor agreement. Various cases are therefore possible.
One case is where the collective labor agreement expressly prohibits the prorating of special payments.
In such case, the Supreme Court took the view, in its judgment of February 8, 2021, that if a collective labor agreement expressly provides that the two special payments cannot be made on a pro rata basis, this must be complied with in all cases. Thus, any special payment that had been prorated in contravention of the collective labor agreement, even if perfectly identified on the pay statement as “prorated special payment”, will be treated as part of the ordinary remuneration and the employer must make the special payment again, plus 10% late-payment interest.
According to this judgment, a failure by the collective labor agreement to specify the consequences of a breach of the method of making special payments does not prevent the aforesaid consequence, i.e., having to repeat any special payments that were prorated despite the prohibition.
This position has also been taken by the Supreme Court, for example, in its judgment of January 25, 2012, in which it ruled that if the collective labor agreement prohibits prorating, the employer will still have to make the special payments due, and any that were prorated must be treated as ordinary salary.
A second case could be one in which the collective labor agreement does not expressly prohibit the prorating of special payments, and instead refers to the existence of an agreement with employee representatives or employees, or simply does not mention the possibility of prorating special payments at all. In such cases, if there are employee representatives, the aforesaid agreement with them will have to exist. If there are no employee representatives, there may be an agreement between the company and the employees, i.e., the employment contract may provide for the prorating of special payments (judgment handed down on October 20, 2020 by the Asturias High Court). Furthermore, in these cases, the part of the salary related to the prorated special payments must be identified on the pay statement.
In this connection, the Madrid High Court, in its judgment of May 27, 2011, accepted the possibility of individual negotiation between employer and employee regarding the method of making special payments, provided that the collective labor agreement does not prohibit this practice.
Lastly, it is clear that a collective labor agreement that expressly authorizes the prorating of special payments should not be detrimental to the employer that applies it. Nonetheless, in such cases it is important to note that, once this practice has been implemented on an ongoing basis, the employer will not be able to modify it unilaterally (Supreme Court judgment of December 20, 2005).
In short, before implementing a remuneration policy that includes the prorating of special payments, it will always be necessary to consider what is stipulated in this connection in the applicable collective labor agreement.