We have a solution: the supreme court closes the debate and indicates that there was never a real ban on dismissals

We have a solution: the supreme court closes the debate and indicates that there was never a real ban on dismissals

The Social Chamber of the Supreme Court has finally cleared up the doubts that for more than two years have been generated by the so-called “ban on dismissals”, concluding that dismissals made during and due to the pandemic caused by Covid-19, in breach of the provisions of article 2 of Royal Decree-Law 9/2020 (“RDL 9/2020”) are not null and void but unfair.

What exactly did article 2 of RDL 9/2020 provide for? 

Following the declaration of the state of alarm due to the health crisis caused by Covid-19, the Council of Ministers decided to publish, by means of a Royal Decree-Law, a series of urgent and extraordinary measures to try to tackle and alleviate, to a certain extent, the economic and social impact of the health and social crisis caused by the pandemic. 

Thus, on March 28 2022, the Council of Ministers approved RDL 9/2020, which included measures such as the famous employment protection established in article 2. 

The aforementioned article – in a wording that is more obscure than anything else for the purposes of legal certainty – indicated that force majeure and the organisational causes behind the measures to suspend contracts and reduce working hours provided for in the previously approved Royal Decree-Law 8/2020 (“RDL 8/2020”) could not be understood as justifying the termination of the contract or dismissal. 

Well, reactions to this article were not long in coming, as although some labour lawyers indicated that the wording of the article – although confusing – did not imply an express prohibition of dismissal, others, on the contrary, argued that it was clear that there was a clear intention on the part of the legislator to prevent or prohibit dismissals arising from the crisis caused by Covid-19.

Two Social Courts Justice (“SCJ”) that did defend the nullity of the dismissals

The debate – which initially broke out on the Twitter platform – did not take long to be transferred and discussed in our country’s Superior Courts of Justice (“SCJ”), which were forced to rule, with disparity of criteria – in many cases contradictory between the different instances – on the interpretation of the aforementioned article 2:

• The SCJ, which opted for declaring the dismissal to be unjustified: 

The SCJ of Andalusia, Catalonia, Galicia and Madrid, among others, opted for interpreting the rule by concluding that according to the provisions of Article 2 “the economic, technical, organisational or production causes that have a direct cause in losses of activity as a result of COVID-19, including the declaration of a state of alarm, cannot be understood as justifying the termination of the employment contract or dismissal” and therefore, being a dismissal without cause”, it would have to be classified as unfair, but never null and void, since unfairness is the effect of an acausal or unjustified dismissal. 

• The Social Chambers that decided to declare the dismissal null and void:

However, despite the majority criterion, the SCJ of the Basque Country and Asturias, in several of their rullings, opted to interpret the aforementioned article in a more “restrictive” manner on the understanding that if there was a will of the legislator to prohibit the making of dismissals because of Covid and that, in any event, as they were fraudulent dismissals – which violated the right to work set out in Article 35 of the Spanish Constitution (“CE”) – they should be declared null and void. 

Reasons of the Supreme Court to rule out the nullity of dismissals

Well, after more than two years of debate and controversy, the Supreme Court’s ruling of October 19, 2022, overturns Ruling number 699/2021 of the Social Chamber of SCJ of the Basque Country of April 20, 2021, which had declared the objective dismissal of a worker as a result of the pandemic to be null and void, and declares it to be unjustified, as the court of first instance had ruled.

Specifically, the High Court makes an extensive analysis throughout the aforementioned judgment of all the case law relating to the classification of dismissal, recalling when a dismissal must be classified as null and void and when it is unjustified, and then analysing the nature of the dismissals without cause linked to Covid-19 and their classification. 

First, the Supreme Court clarifies that the classification of the dismissal as fair, unfair or null and void is a matter for the judicial bodies, which are not bound by the qualifications made by the plaintiff, who is only responsible for proving the reality of the dismissal and not for establishing its classification.

After this, it recalls that the declaration of nullity of a dismissal – without cause – only occurs when this has been provided for by the legislator. In other words, it reaffirms what is already known: dismissals without legal cause based on grounds that are not typified in the Workers’ Statute as determining the nullity of the dismissal, i.e. on grounds of objective nullity or carried out in violation of fundamental rights, are unfair and not null and void.

Finally, the Chamber analyses previous rulings on the content of article 2 of RDL 9/2020 and concludes that the expression “may not be understood to justify the termination of the employment contract or dismissal” is clear and only indicates that, with the application of this rule, the causes that would justify an objective dismissal -individual or collective- under normal conditions, now do not justify it. 

In other words, the rule does not prohibit dismissal, but rather “withdraws coverage for objective dismissal due to business difficulties” in this specific case.

There has never been a prohibition of dismissal

The novelty and significance introduced by the October 19^th’s ruling is that, throughout a lengthy Judgment, it includes the following – and very important – statements: 

1) There is not – nor has there ever been – a real prohibition on dismissal: 

The Supreme Court clarifies that RDL 9/2020 does not contain a real prohibition of dismissal, there being only a restriction which means that in the event that the employer carries out a dismissal in the terms indicated in the famous article 2, the dismissal is unjustified and therefore, unfair. 

2) A dismissal without cause cannot be directly classified as null and void:

The Supreme Court clarifies that the qualification of nullity cannot be given in these cases of dismissals without cause because the cases of unjustified dismissals lead, directly and by legal imperative, to the qualification of unfairness. Moreover, the Chamber points out that “fraudulent dismissal is only null and void if the legislator has provided for it” and, nevertheless, “article 2 of RDL 9/2020 does not contain a prohibition”.

Thus, dismissals will only be null and void when the law expressly assigns such a qualification, as occurs in cases of objective nullity, violation of fundamental rights and violation of the rules of collective dismissal. 

However, the High Court’s ruling does not stop there, as it also indicates that dismissals for COVID reasons in which the causes are structural and not circumstantial will not be directly branded as unfair, with the employer being able to prove the structural nature of the cause and therefore declare the dismissal to be justified. 

It is clear that what is important about this ruling is not the ruling itself, but rather that, at last, after more than two years of debate in the courts and contradictory rulings due to a precept that is confusing to say the least, the Supreme Court has settled the debate and with it the uncertainty of many companies who, until now, had been wondering what would happen to the dismissals made during the pandemic, which were still being debated in the courts. 

For this reason and given the lack of legal certainty offered by some of the regulations in force, the Employment Department of RSM Spain can advise and help you in any matter of this type or similar, so please do not hesitate to contact us.