Collective redundancies are defined as dismissals within a 30-day period of:
- more than ten employees in an establishment of 20 − 100 employees; or
- 10% or more of the employees in an establishment of 101 − 300 employees; or
- at least 30 employees in an establishment of 300 or more employees. The total number of employees also includes those employees whose employment relationship was terminated by agreement between the employee and the employer based on the same grounds for which other employees are being dismissed, if at least 5 employees were dismissed by notice of termination.
The employer must inform the works council and trade union (or directly affected employees if there is no works council or trade union) of its intentions at least 30 days prior to giving notice of termination, and must enter into negotiations to reach a compromise or reduce the number of affected employees, etc.
The employer must simultaneously inform the Labour Office in writing:
- that it has discussed the collective redundancies and its implications (i.e. the later results of these discussions) with the trade union, works council or affected employees; and
- of the actions it has taken in cooperation with the trade union / works council in relation to the collective redundancies; and
- of the number, characteristics, professional qualification, etc. of the employees to be made redundant.
‘Collective Redundancies’ are dismissals executed by an employer for economical, technical, organisational or production-related reasons where, over a period of 90 days, the number of redundancies is:
- At least ten in establishments (provided they employ more than 20 employees) or companies employing up to 100 workers; or
- At least 10 % of the workforce in establishments or companies employing at least 100 but fewer than 300 workers; or
- At least 30 in establishments or companies employing 300 workers or more.
Although under Spanish labour regulations only the company as a whole is considered in order to verify the number of redundancies implemented for the collective redundancies procedure to apply, according to some judicial precedents from the Court of Justice of the European Union the thresholds above are considered in both the company as a whole and the relevant establishment or workplace in which more than 20 employees are employed.
Spanish employment law states that a collective redundancy may also refer to the dismissal of every member of staff when the company employs more than five workers and ceases its operations due to financial, technical, organisational or production-related reasons.
The collective redundancy procedure starts with a consultation period with the employees’ representatives which may not last any longer than one month (15 days in companies with fewer than 50 employees). Although the parties are bound to negotiate in good faith, this does not entail the obligation to reach an agreement to implement the dismissals.
The Employment Authorities must also be notified about the start and result of the collective redundancy procedure.
If the parties do not reach an agreement during the consultation period, the employer may implement the dismissals. If this happens, employees are entitled to receive compensation of 20 days’ salary per year of service up to a maximum of 12 months. However, the employees have the right to challenge the dismissal before the Labour Courts.