The so-called “prohibition on dismissal” will be in force until May 31, 2021, unless a further extension is granted

The so-called “prohibition on dismissal” will be in force until May 31, 2021, unless a further extension is granted
The so-called “prohibition on dismissal” will be in force until May 31, 2021, unless a further extension is granted. The lack of regulatory clarity and uniformity in the case law has sparked a heated debate on the scope of this limitation, established in art. 2 of Royal Decree-Law (RDL) 9/2020—which does not contribute to the legal certainty required for critical decisions such as redundancy measures.
The issue is still open. We are awaiting the publication of a recent judgment of the High Court of Justice (TSJ) of Catalonia (in response to an appeal against a judgment by Labor Court No. 26 of Barcelona). According to this decision, pandemic-related dismissals are unfair, but not null and void. The interpretation of this prohibition will continue to be controversial until the Supreme Court rules on the subject, as illustrated by this judgment (with a dissenting opinion by nine judges).
Besides the classification of dismissals as unfair or null and void, the first issue is to determine which redundancies are affected by this prohibition (i.e., falling within its objective scope of application). Otherwise, ordinary regulation will apply. Therefore, it is essential to define a sound general criterion to answer this preliminary question.
So far, judicial decisions have focused on two aspects in determining the applicability of this prohibition:
In our opinion, this second criterion is more in line with the freedom of enterprise and the autonomous and distinct nature of internal and external flexibility mechanisms, as well as with the Supreme Court’s case law. Already in its judgment of July 17, 2014 (Rec. 32/2014), following a systematic, rational interpretation of arts. 51 and 47(1) of the Workers Statute, the Supreme Court concluded that, in principle, collective redundancies (EREs) must be rooted in structural causes while temporary redundancy plans (ERTEs) must be rooted in cyclical ones. The Supreme Court ratified this in its more recent judgment of September 9, 2020 (Rec. 13/2018), precluding ERTEs in the face of structural problems.
In view of this second position, and with all due caution because the Supreme Court has not yet ruled on the matter, we are inclined to conclude that art. 2 RDL 9/2020 would not prevent dismissals, even COVID-related, when there are structural reasons. In other words, the prohibition only applies to dismissals based on cyclical grounds.
The next question would be to determine whether the reasons are cyclical or structural in nature. In particular, whether any circumstance directly linked to the effects of COVID-19 must be considered cyclical per se.
In this regard, the persistence of companies’ difficulties and imbalances along with the pandemic somewhat blurs their original cyclical nature. As stressed by the dissenting opinion to the judgment of the TSJ of the Basque Country of February 23, 2021 (Rec. 57/2021), the extraordinary anti-COVID-19 regulations stemmed from the need to address a temporary cyclical situation. However, the scenario has changed: almost a year has passed since their adoption and there is still great global uncertainty as to when the pandemic will end.
Furthermore, as already explained, there are judicial decisions that endorse the permanent nature of the grounds for dismissal even if it is due to the effects of the pandemic.
In sum, and in view of those decisions, the fact that the alleged reasons have their origin in COVID-19 should not automatically exclude their consideration as structural grounds or the inapplicability of art. 2 RDL 9/2020. Instead, a case-by-case analysis will be necessary to determine, among others, the following points:
In addition to the specific circumstances of each case, the persistence of the difficulties for more than 12 months could also point to a structural cause. In this case, the temporary employment regulation that establishes a maximum duration could be applied by analogy—if agreed in the collective bargaining agreement.
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