In the last quarter of 2016, the Supreme Court had occasion to rule on the possibility of rejecting the application of the employment contract termination mechanism contained in article 41.3 of the Workers’ Statute (WS) where the harm suffered by the worker is not evidenced.
The facts of the case were as follows.
In December 2013, the employee received a letter notifying him of the application of a measure of material modification of working conditions agreed to in the consultation period that was conducted at the company. The consultation period concluded with an agreement signed with the unanimous support of the negotiating committee. The practical consequence of the modification notified was that, effective January 2014, a salary reduction of 3.87% would be applied to the employee, which entailed a reduction in his paycheck of €77.38 net per month.
After receiving the individual notification, the employee notified the company that he opted to terminate his contract with the right to receive severance equal to 20 days’ pay per year worked, pursuant to article 41.3 WS.
The company received the request from the employee and informed him that, although it did not object to the termination, it would not pay the severance referred to in the article, on the understanding that the employee had not evidenced that he had suffered any harm. The employee responded that, in that case, he did not want to terminate the contract, without prejudice to the exercise of the relevant terminating action.
Against this backdrop, the question asked of the Supreme Court was whether the termination of the employment contract with severance pursuant to article 41.3 of the WS requires proving that the termination has caused harm to the party concerned or whether the harm is presumed.
In its reply, which, we note in advance, opted to consider that the harm must be evidenced, the Supreme Court made a series of interesting observations.
Based on a logical, systematic and extensive interpretation of art. 41 of the WS in conjunction with art. 40.1 of the same law, the Court considered that, whereas in the case of the forced transfer the harm is inherent in it and is presumed, that is not the case of the material modification, which requires evidence of the harm. It goes on to say that “the fact that the modification of the conditions must be material evidences that the harm must be relevant, since otherwise the possibility of contractual termination that the law reserves for serious contractual breaches would not be established (art. 50 WS)”.
To wrap up, the Court noted that it is necessary to evidence the harm caused to assess its importance and the proportionality of the termination measure requested. Consequently, it concluded that the existence of harm that justified the contractual termination had not been evidenced given that the plaintiff’s salary had only been reduced, temporarily, by 3.87%, harm which cannot be deemed to be serious, especially since the reduction was expected to be recovered in the future, which made the contractual termination disproportionate.
Having seen the Supreme Court’s position, we are left with the doubt as to what would have happened had the modification been permanent rather than temporary.
Garrigues Labor and Employment Law Department
