The Galician Supreme Court of Justice (TSJG) issued a first ruling that denounces a subcontracting company for applying a collective agreement outside of the main line of activity. This marks a key change introduced by the labor reform, which requires subcontractors to follow the sector and specialization mandates set by the principal contractor, rather than slipping into cheaper contracts to cut costs.
The agreement reached among the government, employers, and unions did not erase the fundamental practice of subcontracting in Spain, despite what sometimes appears during the early negotiation stages. Initially, there was a tendency to think subcontractors must mimic the salary scales of the primary contractor to avoid any gaps created by outsourcing part of the activity to save money.
In the end, that exact scenario did not come to pass, but the reform narrowed several loopholes that a company could exploit to win a contract by lowering prices and offering inferior wages and conditions. It is now mandatory to apply the sector collective agreement in which the subcontractor operates, regardless of its corporate purpose or legal form, according to a recent TSJG ruling.
The case at hand relates to a decision published last April 14. According to commentary from the blog of the University of Zaragoza’s vice dean of teaching, Ignasi Beltran, the pioneer in implementing the new article 42.6 of the Labor Law, the dispute originated from a worker who provided the service of improvising meter readings in Ourense. The worker was employed by a subcontractor, Teyca-Ga SL, which had stopped delivering the service for Naturgy, and the operation continued by Ichisa SA, which brought its own team and declined to modify the roster. The worker found themselves left unemployed as a result.
The dismissed employee went before the courts, arguing that the dismissal was improper because the Ourense regional metal sector collective agreement imposes an obligation of succession. While Ichisa argued it could apply its own contract, the engineering and technical work offices contract did not provide for this obligation, and thus the question emerged as to which agreement should govern the relationship in this particular case.
The Galician TSJ then stepped in to determine which agreement best reflected the activity being carried out by the worker. In line with the panel’s reasoning, the Ourense metal sector agreement was deemed more appropriate for the activity performed by the worker. The court found that the decisive factor was not the subcontractor’s prior structure or preferences, but the actual work carried out by the employee. Ultimately, the worker’s dismissal was deemed invalid, and compensation of 5,273.2 euros was awarded against Icisa for the improper termination.