Contract Amendments, Functional & Geographic Mobility
Contract Amendments, Functional & Geographic Mobility
Item 5 – Contract Amendment
1. Substantial Contract Changes
Substantial employment contract changes may occur due to: a) New laws altering contract terms; b) Mutual agreement; c) Business reasons (justification required). Modifiable conditions include work schedule, shift patterns, remuneration, and functions (when exceeding functional mobility limits as per Article 39). Change of venue constitutes a contract modification requiring employer justification and adherence to procedure. This refers to geographical mobility, not simply a change of location (e.g., Getxo to Zamudio).
1.1 – Justification
- Economic causes: Related to the company’s ongoing income and expenditure balance.
- Technical causes: Improving competitiveness through production streamlining and technological advancements.
- Organizational causes: Adapting structure, workforce, and equipment for better resource utilization (difficult to prove in court).
- Production causes: Adjusting production costs and volume to meet market demands and maintain competitiveness.
1.2 – Procedures for Substantial Amendments
The applicable procedure depends on whether the change affects an individual contract or a collective agreement. Individual contract changes affect only the involved employee; collective agreement changes affect the entire group.
1.2.1 – Individual Changes
- Written notification of the amendment (date, reason, 30-day advance notice).
- Notification to worker representatives.
Employees may contest the change within 20 days of notification, but disciplinary action may result from breach.
1.2.2 – Collective Changes
- 15-day discussion period with worker representatives.
- Notification to the labor authority.
- Notification to affected workers (details, 30-day advance notice).
1.3 – Effects
Employees may: 1. Accept the change; 2. Challenge the decision in court (compliance required during legal proceedings); 3. Resign in cases of changes to work schedule, shift, etc., receiving severance pay (20 days per year worked, up to 9 monthly payments) and unemployment benefits.
2. Functional Mobility
2.1 – Types of Mobility
Internal functional mobility: Occurs within the same professional group or between equivalent categories. The employer may implement this without cause, but it must be justified, not arbitrary, and not subject to time limits. Pay must reflect the actual functions performed.
External functional mobility: Involves functions outside the professional group or equivalent grade. It is causal, subject to time limits, and pay must reflect the actual functions. An individual procedure, as agreed in the contract, is required.
- Downward mobility: Occurs when assigned duties are below the employee’s professional group or equivalent status. Requirements include justification due to unpredictable production needs, notification to worker representatives, and maintenance of current pay.
- Upward mobility: Occurs when higher functions are assigned for more than 6 months (1 year) or 8 months (2 years). Employee rights include promotion, filling vacancies, claiming wage differences, and claiming professional status through job classification (if legally possible).
Extraordinary functional mobility: Occurs when both parties agree to a change in functions.
2.2 – Limits to Mobility
- Academic or professional degree: If a higher position requires a specific degree, the employee may request training or a pay increase. Collective agreements may also apply.
- Respect for worker dignity: Mobility that impairs dignity is considered unfair.
- Respect for vocational training and promotion: Compensation for damages may be claimed in case of career detriment.
- Protection against dismissal: Functional mobility cannot be used as a pretext for dismissal for objective reasons (termination will result in 45 days’ pay, while a shift change results in less compensation).
3. Geographic Mobility
3.1 – Transfers
Transfers involve mobility lasting more than one year.
3.1.1 – Concept
A reassignment implying a permanent job and a change of habitual residence.
3.1.2 – Justification
Geographic mobility must be justified by economic, technical, organizational, or production reasons.
3.1.3 – Types and Procedures
Individual transfers: Affect a small percentage of workers in companies of various sizes.
Group transfers: Affect a larger percentage of workers in companies of various sizes.
3.2 – Displacement
Displacement involves company actions outside the premises. Justification is not required if the displacement is temporary (5-day advance notice). The measure is enforceable, but it cannot exceed one year (otherwise, it becomes a relocation). The employer covers travel expenses. Temporary shifts require 4 days’ notice (including travel time), given every three months.
4. Change in Company Ownership
This section addresses employment contract amendments related to employer ownership changes.
4.1 – Business Succession
As per Article 44, business succession occurs when a company (assignor) transfers all or part of a production unit to another (transferee), who continues the activity. The transfer must include the means to continue the activity and all assets. The new owner assumes the rights and obligations of the previous employer. An audit is conducted before the transfer to identify and address existing liabilities.
4.2 – Contractors and Subcontractors
Article 42 outlines worker rights in the construction sector, where a principal company (contractor) hires another (subcontractor) to perform specific tasks. Multiple companies’ workers may share the same work center, creating obligations regarding worker rights. This differs from outsourcing, where contractors use their own materials and facilities. Illegal worker transfers may occur, leading to joint and several liability for unpaid wages (employer and contractor). The contractor may request information on the subcontractor’s creditworthiness and wage payments; refusal may lead to contract termination. Unfair dismissal and joint and several liability apply in cases of accidents or occupational diseases. Penalties include surcharges on social security contributions.
4.3 – Employee Transfer
4.3.1 – Illegal Transfer
Employees may claim unfair dismissal from the transferee in cases of illegal transfers. Joint and several liability applies in accidents, and criminal charges (up to two years imprisonment, €300,000 fine, and professional disqualification) may be filed for violations of worker rights.
4.3.2 – Temporary Work
Hiring through temporary employment agencies (TEAs) is a legal form of worker assignment. The TEA maintains a business relationship with the client, while the worker-TEA relationship is purely formal.
TEA Use Cases: Specific situations, short-term needs, temporary work accumulation, and order overruns.
In illegal situations, joint and several liability applies.
TEA Obligations:
- Formalize employment contracts (definite or indefinite).
- Pay insurance costs.
- Pay all applicable wages.
- Ensure equal wages as the user company.
- Provide training and safety information.
- Provide annual medical examinations (mandatory only for unhealthy work conditions).
- Pay compensation for unfair dismissal and process wages.
- Pay compensation for accidents or occupational diseases.
TEA Requirements and Structure:
- Official authorization to ensure worker rights protection.
- Authorization for a specific territory and activity.
- Financial security (bank guarantee) to safeguard worker rights.
User Company Obligations to the Employee: The employee is subject to the user company’s schedules, instructions, etc. The user company is vicariously liable for salary payments, social security contributions, etc., and has joint and several liability in cases of accidents, occupational diseases, and compensation. Specific health monitoring is required based on environmental conditions.