The Supreme Court has issued a judgment to unify legal doctrine that establishes that a worker is not entitled to receive the proportional part of his/her annual bonus in the case of voluntary resignation before the end of the accrual period. In this post, we analyze the judgment issued on October 22, 2020 and mentioned in the press, as well as others on the same matter, in the event a previous collective agreement exists that expressly provides for the forfeiting of the right to a bonus in the event of voluntary resignation.
In its recent decision, the Supreme Court focused the debate on the analysis of a collective agreement between the company and trade union sections relating to the variable remuneration system, in which there were two requirements for the accrual of a bonus: i) the worker was an employee of the company until the end of the bonus accrual period (October 31 of each year), and ii) the objectives established had been met.
The judgment deals with the case of an employee that resigned on December 9, after having been employed for more than 11 months of the bonus accrual period- and makes the following considerations:
1. On a preliminary basis, it differentiates the case of the proceedings from the three cases alleged by the trade union party that concluded acknowledging the right to the bonus. Specifically, the following judgments are quoted:
- Supreme Court Judgment of December 2, 2015, appeal 326/2014 declaring null and void an agreement regulated in the collective agreement that required the worker to be employed on the bonus payment date, in the understanding that it is not correct to require permanence after the period of accrual had expired.
- Supreme Court Judgment of February 11, 2020, appeal 3624/2017, that analyzes the same agreement and clause subject to this post, but in a case of disciplinary dismissal and not of voluntary resignation, in which payment of the bonus was acknowledged, as it was understood that compliance with the agreement was left to the discretion of only one of the parties -in this case, the company-.
- And, finally, Supreme Court Judgment of May 5, 2009, appeal 1702/2008, which analyzes a case in which there was no express requirement to be employed by the company as at December 31 of each year, ruling in favor of the worker.
2. Against the claims made by the trade union plaintiffs, the Court concluded:
- That the clause subject to debate did not breach article 1256 of the Civil Code, as it did not leave the validity and compliance only to the discretion of the company. It was the employee that freely decided whether or not to leave the company before December 31, (period of accrual), failure to meet this requirement not being attributable to the company.
- There is no unjust enrichment on the part of the company, as it is lawful to agree to variable remuneration that is above the minimum salary established in a collective regulation, the payment of which is conditioned to the effective permanence of the worker.
- And, finally, neither is there a breach of article 4.2.f) of the Workers’ Statute, which acknowledges the right to receive the remuneration agreed during the provision of services, as it is understood that the company paid the agreed compensation at all times and the variable remuneration was not payable because one of the requirements stipulated for its payment was not met (permanence with the company on a particular date).
There is no doubt that the judgment analyzed is extremely important, however given the specific nature of the case and that the conclusion reached was based on the particular wording of an agreement between the company and the workers’ representatives, the conclusion should not be extrapolated automatically, nor applied in general to other situations, but rather each individual case and the internal policies and rules in force should be analyzed in each specific situation.
Garrigues Employment & Labor Law Department