Is a company that had profits in the two years prior to the initiation of the collective dismissal required to make economic contributions to the Public Treasury, even when the group of companies to which it belongs, as a whole, has losses?

First, it must be clarified that despite the fact that the referenced Sentence alludes to a collective dismissal that took place while the original wording of the Sixteenth Addition Provision (16^th DA) of the Law 27/2011, of 1 August, on the updating, adjusting and modernisation of the Social Security system was in effect, an interpretation of the precepts was made that takes into account the successive modifications that this law underwent, for which reason it can be extrapolated to any collective dismissal that is provided under the current legislation on the subject.

In effect, the 16^th DA of the Law 27/2011 has undergone significant variations since then (RDL 3/2012, Law 3/2012; RD 1484/2012), introducing ultimate and important changes in the character of this legal figure with the publication of the RDL 5/2013 and RDL 16/2013, of retroactive application from 1 January 2013 in the terms defined therein.

We also recall that in its day the Supreme Court had the occasion to speak out on an identical case, through the decision dated 17 November 2016, which resolved an issue posed by the same company for a previous settlement period, for which reason the cited sentence reproduces criterion and would technically constitute jurisprudence.

Having stated the above, the obligation of making an economic contribution to the Public Treasury by the Company as a consequence of a collective dismissal finalised on 10 January 2012 is analysed. The company that carried out the collective dismissal, considered individually, had profits, although the group of companies to which it belonged accumulated losses.

The General Directorate of Employment, on the date of 4 December 2013, certified that the circumstances established in section 1 of the 16th DA of the Law 27/11 had been met, which caused, on 29 October of the following year, the Public Service of State Employment ex officio to agree to issue a settlement proposal against it as an economic contribution derived from the collective dismissal procedure in question.

In the case dealt with, given that the Collective Dismissal Procedure finalised on 10 January 2012, it is governed by the 16th DA of the Law 27/2011, in its original wording, where it stated:

“1. The companies that carry out collective dismissals according to the provisions of Article 51 of the Workers’ Statute, and that include workers of 50 years of age or more, must make an economic contribution to the Public Treasury, under the terms that are determined in the regulations, whenever such collective dismissals meet the following circumstances: ... c) That, even meeting the economic, technical, organisational or production causes that justify it and reasonability of the termination decision, the companies OR the group of companies to which it belongs had had profits in the two economic years prior to the authorisation of the termination of employment (...)”

It is argued that the regulation is activated in two cases:

1. When the company that carries out the collective dismissal, considered individually, has profits in the two fiscal years prior to the authorisation of the dismissal.

2. When the company that carries out the collective dismissal, considered individually, has losses in the two prior fiscal years, but the companies of the group in Spain had positive results.

Therefore, the theory of the appellant company, which argued that the legal provision does not distinguish two different cases, “but rather simply the existence of profits in the company that promotes the dismissal or, when it forms part of a group of companies, such as in the case of the referenced group,” was rejected by the High Court, considering that it deals with an interpretation far from the literal wording of the precept, since the regulation does not consider the compensation of results or of losses, but rather that it is sufficient that there are profits either in the requesting company or in the group to which it belongs.

As the decision affirmed, the interpretation realised is made clear, in an even clearer way, in the wording given to the precept by the RD-Law 5/2013 in effect today, by which the conclusion reached is equally applicable to the collective dismissals made from 1 January 2013.   

For further information, please contact:

Alfredo Aspra Rodriguez

alfredo.aspra@AndersenTaxLegal.es