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The Court of Justice of the European Union has just resolved some accumulated issues raised in cases of indefinite non-fixed and interim workers against the abuse of the Public Administration.

In Spain, many workers are in a situation of labor precariousness as they are hired as indefinite non-fixed or interim by the Public Administration. This type of temporary and precarious contracts have become a common practice in many public bodies, which has generated a problem of abuse and violation of the labor rights of these employees.

As stated in the resolution that is being discussed, this issue sometimes violates current labor law. To focus on the issue, it must be remembered, as the Court does, which are the basic provisions applicable to this type of employment relationships:

Spanish Law:

Constitution

Article 23, paragraph 2, of the Spanish Constitution (hereinafter, “Constitution”), states that citizens “have the right to access public functions and positions on equal terms, with the requirements established by law.”

Article 103, paragraph 3, of the Constitution establishes, among other things, that the law will regulate the status of public officials and access to public office in accordance with the principles of merit and ability.

Legislation related to fixed-term contracts

Statute of Workers

Article 15, paragraph 3, of the Workers’ Statute Law, whose consolidated text was approved by Royal Legislative Decree 2/2015, of October 23 (BOE no. 255, of October 24, 2015, p. 100224), provided, in its version applicable to the main disputes (hereinafter, “Workers’ Statute”), that “temporary contracts concluded in breach of the law will be presumed indefinite.”

Article 15, paragraph 5, of the Workers’ Statute provided the following:

“Notwithstanding the provisions of paragraphs 1.a), 2 and 3, workers who have been employed for a period of thirty months for more than twenty-four months, with or without interruption, for the same or different position with the same company or group of companies, through two or more temporary contracts, directly or through their provision by temporary employment agencies, with the same or different contractual modalities of fixed duration, will acquire the status of permanent workers.

[…]”

The fifteenth additional provision of the Workers’ Statute, concerning the “Application of the limits on the duration of contracts for specific tasks or services and the chaining of contracts in Public Administrations,” specified that the non-compliance with those limits in the “Public Administrations and their linked or dependent public bodies” did not prevent “the application of the constitutional principles of equality, merit, and ability in access to public employment, so it will not be an obstacle to the obligation to fill the positions in question through regular procedures, in accordance with the applicable regulations,” so that “the worker will continue to perform the position he/she was holding until it is filled through the aforementioned procedures, at which point the labor relationship will be terminated, unless the mentioned worker access to a public employment, surpassing the corresponding selective process.”

EBEP

The Basic Statute of Public Employee, whose consolidated text was approved by Royal Legislative Decree 5/2015, of October 30 (BOE no. 261, of October 31, 2015, p. 103105), in its version applicable to the facts of the main disputes (hereinafter, “EBEP”), was modified, among others, by Royal Decree-law 14/2021, of July 6, on urgent measures for reducing temporary employment in the public sector (BOE no. 161, of July 7, 2021, p. 80375), in its version applicable to the facts of the main disputes (hereinafter, “Royal Decree-law 14/2021”).

According to article 8 of the EBEP:

“1. Public employees are those who perform paid functions in the Public Administrations in the service of the general interests.

2. Public employees are classified as:

a) Career civil servants.

b) Interim civil servants.

c) Labor personnel, whether fixed, for an indefinite or temporary period.

d) Temporary staff.”

According to article 11, paragraphs 1 and 3, of the EBEP:

“1. Labor personnel are those who, under a written employment contract, in any of the employment contracting modalities provided for in labor legislation, provide paid services to the Public Administrations. Depending on the duration of the contract, it may be fixed, for an indefinite or temporary period.

[…]

The selection procedures for labor personnel will be public, always governed by the principles of equality, merit, and capacity. In the case of temporary labor personnel, it will also be governed by the principle of expeditiousness, with the aim of addressing expressly justified reasons of necessity and urgency.”

Article 55, paragraph 1, of the EBEP provides the following:

“All citizens have the right to access to public employment in accordance with the constitutional principles of equality, merit, and capacity, and in accordance with the provisions of this Statute and the rest of the legal system.”

Article 70 of the EBEP, titled “Public employment offer,” establishes the following:

“1. Human resource needs, with budget allocation, which must be met by incorporating new personnel, will be subject to Public Employment Offers, or through another similar instrument for managing personal needs provision. This will entail the obligation to call the respective selective processes for the committed positions and up to an additional ten percent, setting the maximum term for their call. In any case, the public employment offer or similar instrument execution must be developed within an unextendable period of three years.

2. The Public Employment Offer or similar instrument, which will be approved annually by the Governing Bodies of the Public Administrations, must be published in the corresponding Official Gazette.

[…]

Article 1, paragraph 3, of Royal Decree-Law 14/2021 introduced the seventeenth additional provision in the EBEP, which establishes, in the first place, the obligation of Public Administrations to avoid any type of irregularity in temporary labor contracting and the appointments of interim official personnel. Subsequently, this seventeenth additional provision specifically indicates that ‘irregular actions’ in this matter ‘will lead to the demand for the corresponding responsibilities in accordance with the regulations in force in each of the Public Administrations.’ Finally, the same additional provision also establishes the workers’ right to receive, without prejudice to the eventual compensations provided in the labor regulations, compensation for irregular temporary contracting, consisting of the payment of the difference between the maximum amount resulting from the application of the rule of twenty days of fixed salary per year of service, with a maximum of twelve monthly payments, and the compensation that would correspond for the contract termination. This compensation is payable at the moment of the contract resolution and is limited to the contract that causes the breach of regulations.

The previous configuration has led many workers, like those in the cases resolved by the European Union Court of Justice, to sue the Public Administration for their work contracts to be converted into a fixed-term contract, and in some cases, compensation for wrongful dismissal has been requested, following the termination (which would require the worker to file the corresponding administrative claim).”

Entering into the decision of the Court of Justice of the European Union, it establishes the following bases:

1. In the public sector, the concept of “indefinite but not permanent worker” constitutes a jurisprudential creation and must be distinguished from the concept of “permanent worker.”

2. However, it must be interpreted in the sense that an indefinite but not permanent worker should be considered a worker with a fixed-term contract, for the purposes of said Framework Agreement, and, therefore, is included within the scope of application of the latter.

3. When a worker is declared “indefinite but not permanent,” this declaration, although it may be considered a sanction against the employer in question for the abusive use of successive fixed-term work contracts, has the effect of replacing the temporary contracts that such worker may have previously entered into, so that, with said declaration, the labor relationship in question becomes, from the start, an indefinite but not permanent labor relationship. In this way, the temporary contracts previously entered into are no longer valid, and such worker is bound from the beginning by a single indefinite but not permanent contract.

4. In the context of these matters, the referring court specifies that the indefinite but not permanent contract does not have a set expiration date, but rather its termination is contingent upon the filling of the relevant position, and that the call for the procedure to fill such position is mandatory for the Administration.

5. There are no successive fixed-term labor relationships, for the purposes of clause 5 of the Framework Agreement, merely because a worker is linked to the Administration in question by a single indefinite but not permanent contract, while, as results from the requests for a preliminary ruling, on the one hand, this last contract, also of a temporary nature, replaces, as a sanction, successive temporary contracts and, on the other hand, the continuation of this indefinite but not permanent worker in the relevant position is due to the employer’s failure to fulfill its legal obligation to call, within the established period, a selective process for the definitive filling of that position, so that his labor relationship has consequently been tacitly renewed for several years, could compromise the purpose, aim, and effectiveness of said Framework Agreement.

6. Therefore, there are cases where if a new selection process and/or call by the Administration are not approved, the indefinite but not permanent contracts are understood to be automatically renewed with the Public Administrations.

Similarly, the resolution reminds the characteristics of an indefinite but not permanent worker according to Spanish jurisprudence, summarized as follows:

“The figure of the ‘indefinite but not permanent worker’ responds to the characteristics of the three measures outlined in clause 5 of the Framework Agreement. They consider that, in the first term, there is an objective reason for the application of this contractual modality: the guarantee of access to public employment under conditions of equality, merit, capability, and publicity, while remedying at the same time a situation of irregular contracting in the public sector, until the moment the position is filled; in the second term, there is a maximum duration that depends on the call for the vacancy, a call that the contracted worker can activate and that must occur within a maximum period in accordance with Spanish law, and, in the third term, succession is excluded, because there are no renewals of this type of contract.”

Therefore, the resolution establishes that although there is a regulation that obliges Administrations to call selective processes to definitively fill positions that had been temporarily occupied by temporary workers, if such regulation does not establish control over the effective calls, it does not prevent the abusive use of “successive fixed-term labor relationships”.

Likewise, the high court indicates that the compensation provided for the termination of these types of contracts is not sufficient to ensure the full effectiveness of the rules designed to prevent the abusive use of such contracts by Public Administrations. Therefore, community regulations: “oppose a national regulation that establishes the payment of a fixed compensation, equal to twenty days of salary for each year worked, with a limit of one year’s salary, to any worker whose employer has resorted to an abusive use of successively renewed permanent-non-fixed contracts when the payment of such compensation for contract termination is independent of any consideration regarding the legitimate or abusive nature of the use of such contracts.”

Furthermore, the resolution opens the door for lower courts to validate permanent-non-fixed contracts as permanent when it indicates that: “From all the above, it follows, on one hand, that, in the event that the referring court considers that the domestic legal system in question does not contain, in the public sector, any effective measure to prevent and, where appropriate, sanction the abusive use of successive fixed-term contracts, including successively renewed permanent-non-fixed contracts, the conversion of these contracts into an employment relationship of indefinite duration could constitute such a measure.”

However, such application will not be straightforward as it adds that if: “the referring court also considered that the consolidated jurisprudence of the Supreme Court, unlike that of the Constitutional Court, opposes such conversion, the referring court should then amend such jurisprudence of the Supreme Court if it is based on an interpretation of the Constitution’s provisions incompatible with the objectives of Directive 1999/70 and, in particular, of Clause 5 of the Framework Agreement.”

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