Spain, Supreme Court, 22 February 2022, Judgement 168/2022
Case overview
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Link to the full text of the decision
General Summary
The Supreme Court had to decide whether the collective dismissal of 87 employees of a company that produces airplane engines during the pandemic was valid or not. After carefully examining the reasons for the company’s decision, the Supreme Court determined that, as the dismissal was exclusively caused by Covid-19-related reasons, it should have been substituted by other flexible measures such as a suspension of contracts or a reduction in the working hours of employees.
Facts of the case
A company producing airplane engines subjected its workers to Temporary Redundancy Proceedings (ERTE). The decision was declared null in previous instances, including by the High Court of Justice of the Basque Country. Afterwards, the company reacted to the nullity of the ERTE by collectively dismissing 87 employees, which was also declared invalid by the Basque Country Supreme Court in May 2021. This last decision was then appealed before the Supreme Court by the company concerned.
Type of measure challenged
Measures, actions, remedies claimed
Individual / collective enforcement
Nature of the parties
Claimant(s)
Private individualDefendant(s)
Private collective
Type of procedure
Reasoning of the deciding body
The Supreme Court began analyzing the financial information of the company during the previous years. After, it determined that the financial and productive situation of the enterprise was linked to the Covid-19 pandemic. Before March 2020, there were no significant losses of income. In fact, economic projections for 2020 were good. Subsequently, and following the reasoning of the lower Court, the Supreme Court explained that, according to Decree Law 8/2020, when the cause of the dismissal was the pandemic, the latter should be substituted by suspension of contracts or reductions in working hours, which are temporary measures. However, if the financial, technical, organizational, or productive causes which justify the dismissal are rather structural or definitive, a collective dismissal can be applicable. In this case, it was the company that should prove that the circumstances which caused the dismissal were structural rather than circumstantial, that is, that the temporary measures provided by Decree Law 8/2020 were not enough to mitigate the critical situation of the company. In this case, the company justified the collective dismissal of its employees on its negative financial situation and the lowered demand for its products, circumstances that were directly linked to the Covid-19 pandemic. In addition, the dismissal was also performed considering future account projections. The downturn in air traffic in the years following directly affected the company since it produced airplane engines. Since the enterprise had not justified the existence of a structural crisis situation - which would have justified a collective dismissal - the Court found that it should have resorted to other temporary labor measures (e.g. suspensions and reductions).
Conclusions of the deciding body
The Court determined that the collective dismissal of 87 employees was due to the impact of the Covid-19 pandemic on the primary activity of the company. It caused a low demand for its products which was likely to be sustained over time in the years following due to a downturn in air traffic. Thus, the company should not have carried out a collective dismissal but used other temporary measures such as suspensions of contracts or reductions in working hours.
Fundamental Right(s) involved
- Freedom to conduct a business
- Right to work
Fundamental Right(s) instruments (constitutional provisions, international conventions and treaties)
- Freedom to conduct a business, Art. 38, Spanish Constitution
- Right to work, Art. 35, Spanish Constitution
Rights and freedoms specifically identified as (possibly) conflicting with the right to health
- Health v. freedom to conduct a business
- right to work
