The Court of Justice of the European Union (CJEU) recently published a ruling that could shake up the labor market in Spain. The resolution opens a debate of capital importance on what is meant by Temporary Work Agency (ETT), with a broad interpretation by European magistrates and which calls into question whether it can be limited to that regulated in Spain. That is to say, it could be extended to other types of companies, by expressly designating subcontractors in certain cases. Thus, its employees would have the right to receive the salary of the main company.
The judgment, dated October 24, responds to a preliminary question posed by the Superior Court of Justice of Madrid concerning a worker in Spain of a subcontractor (LeadMarket) which provides services to Microsoft. After an internship at Microsoft, the employee worked for three subcontractors, always for the technology multinational.
The worker became pregnant in 2020 and in the seventh month of pregnancy, Microsoft, “citing budgetary reasons”, informed Leadmarket that the contract for the provision of services between these two companies “would not be extended”. When the woman concerned returned from maternity, breastfeeding and vacation leave, the subcontractor fired her for objective reasons, alleging “a drop in demand due to drop of projects”.
The employee asked the court that the dismissal be declared null and that LeadMarket be condemned, and as co-defendant Microsoft, “because they considered that in reality it was a matter of making her available to provide its services in said company”, says labor law professor Eduardo Rojo on his blog, in which he analyzed the sentence.
An employment tribunal declared the dismissal void, but only condemned the subcontractor, because it considered that it was not a matter of provision of personnel, but rather legal subcontracting, and therefore exonerated the multinational from its responsibilities towards the worker. The party concerned has appealed the judgment and it is the TSJ of Madrid which asks several preliminary questions to Europe on what can be understood by “making available” and by ETT, in order to comply with the regulations European Union on questions as relevant as the right to wages of the main company.
Extension of what is an ETT in Spain?
The verdict of the European magistrates is very relevant because it proposes a fairly broad interpretation of what can be considered as an ETT, extending the notion (and its obligations) to other cases, such as for example a certain type of subcontracting.
In Spain, there is an obligation for ETTs to have an administrative authorization that considers them as such. European justice warns, however, that European regulations on temporary work agencies do not require this requirement.
Thus, requiring this authorization to apply European ETT regulations, “on the one hand, would imply that the protection of workers would differ between Member States, depending on whether national laws require such authorization or not, and within the same Member State”, depending on whether or not the company in question has such authorization”, the judges specify.
Furthermore, they consider that “this could contravene the objectives of the said directive, which consist of protecting workers assigned to temporary work agencies, and, on the other hand, it would undermine the useful effect of the said directive, in excessively and unjustifiably restricting the scope of this measure.
The CJEU therefore opens the door to the regulation of temporary work agencies being applied to other companies if they respect the European definition of these temporary work agencies, with the key notion of “provision” of personnel. And, at this stage, he also makes a “very broad” reading of what can be understood by “making available”, assesses on his blog Ignasi Beltrán, professor of labor law and social security at the Open University of Catalonia (UOC). ).
In general, this provision of personnel could occur “in a very broad typology of entrepreneurs (natural and legal persons)”, warns Beltrán, also cooperative, “provided that they intend to place these workers available to a user company. . However, “it must be a habitual activity”, adds the professor in his analysis, among other determining elements highlighted by the CJEU, which places the key in “the determination whether the user company exercises management power and control over the affected worker. “. It is up to the national courts to verify whether this happens or not.
Eduardo Rojo considers that the European decision “could ‘open the waters’ of what is meant by temporary work agency (ETT)” in Spain and generate multiple appeals before the courts to claim, for example, the salary of the he main company or that The main companies respond jointly in the event of dismissal and compensation of subcontractor employees, as in this trial analyzed by the CJEU, he explains to elDiario.es.
Possible brake on subcontracting to create precariousness
The European decision “is very relevant and could have a systemic effect”, believes Ignasi Beltrán. The specialist recalls that there are certain situations in which contractors or subcontractors are used “to conceal a transfer of workers outside the legal regime of temporary work agencies”.
It should be remembered that in Spain ETTs can transfer workers to a main company – on a temporary basis – and that the latter is the one that commands and controls the worker during the provision of services. Of course, during this period the employee is entitled to certain minimums according to European regulations on temporary employment contracts, transferred to Spanish regulations, such as the salary of the main company.
In the case of contracts or subcontractors, the workers also provide services to another main company, but here the active command and control of the workers must rest with the subcontractor company. There cannot be a simple provision of personnel, as this would result in an illegal transfer of workers.
However, Professor Ignasi Beltrán emphasizes that national courts interpret the determining elements of contracts and subcontractors with “increasing laxity”, “admitting hypotheses which should probably be subsumed under that of illegal transfer”. “For a long time, commercial construction has been used to conceal labor transfer situations, thereby undermining the useful effect of the Temporary Work Directive,” he believes.
The result is that subcontracting is used on many occasions as an easy way to precarize employment and avoid responsibility for these personnel by large companies. But the interpretation of this CJEU judgment could put an end to this practice.
Beltrán emphasizes that, taking into account “the factors describing the power of direction and control of a user company described by the CJEU, a priorithis doctrine could impact many contracts, even if national courts today would not characterize them as an illegal assignment.
Like Eduardo Rojo, the UOC professor considers that “it could be relatively frequent for new preliminary questions to be formulated at the CJEU” after this judgment in which we examine “whether or not a provision” of under-employed workers. treated. This could give them the right to receive salaries from the main company, among other minimums of the European ETT regulations.
“The decision is complex and can generate a broad legal interpretation”, considers Rojo, who warns that we will first have to wait for the decision of the TSJ of Madrid on the complaint of this worker and also see how other national courts will interpret the resolution.
