Company Succession PDF

If its of a collective nature, more complex procedure: - Consultator period - Possible mediator - Representative commision Company succession: Transfer of undertakings : The change of ownership of the company. It can be in a company, in a work c...

If its of a collective nature, more complex procedure: - Consultator period - Possible mediator - Representative commision Company succession: Transfer of undertakings : The change of ownership of the company. It can be in a company, in a work center or independent production unit. An indpendent production units are services or assets owned by a company but they can continue/function separately from the company. (Ex: if a company owes a factory or shop). When there is a change, it does not extinguish/end the labour relationships and there is a new employer that will substitute the previous one in the labour obligations, relations, SS rights, pension comitments, in any type of labour relationship/obligation. From a legal point of view, it happens when the transfer is affecting the economic entity and the change of ownership can be partial or total. Changes of ownership can be: - By inter vivos: change of ownership because there has been a leasing of industry, judicial sale, mergers, takeover… when the previous owner is still alive. - By trasmision of mortis causa: due to the cause of death. The company will be transmited to the heirs (herederos). In this case, the transmision will be valid if the heir acceots the inheritance (Art 38 Constitution). Doctrine has established 2 elements that must happen to consider it a company succession: 1. Subjective: the one that says that there always must be the susbtitution of the entrepreneur by another one. It doesn’t matter if its legal or natural person. 2. Objective: Is that all the esesntial elements of the company should be transferred to continue the activity of the company. Subrogation effects – Employment relationship continue to be in force. The new employer is subrogated to the rights and obligations of the former employer:  ▪ Enployment rights and obligations ▪ Social Security rights ▪ Pension commitment The worker cannot oppose the succession, but the subrogation is not obligatory for him: can resign. Maintainance of representative bodies – When the company, work center or production unit its autonomy (WS does not specify): The mandate of the workers' representatives (same roles and conditions) is not extinguished. Applicable CBA – Unless otherwise agreed the collective bargaining agreement that applied to the company at the time of the transfer will continue. Until: - The date of termination of the collective bargaining agreement. - The entry into force of a new collective bargaining agreement. In the future, the transferred company must comply with the collective bargaining agreement of the new employer. Information obligation – Information duties are strengthened. - Inter vivos succession - To whom inform: to the workers' representatives (if there are none, to the workers affected by the succession). Content of the information : Date foreseen for the succession reasons, legal, economic, social consequences for the workers and measures to be taken). When to inform : in good time. - For the transferor: before the transfer is carried out. - For the transferee: before the workers are affected in their employment and working conditions. In case of non-compliance: serious administrative breach (they will be fined/they will have penalties). Does not affect the validity of the succession. Consultation period – When there is a company succession there should also be a consultation period. - When? When there has to be any adoptionof labour measures. It should be before the measures take place - Who? With workers rep or directly to workers Job liability – Liability of transferor and transferee intervivos - Regarding labour obligations before PRIOR to the succession and that have not satisfied and will last during the 3 years following the succession. - These labour obligations will include SS payments… - The new and the old employer will be both responsible for the obligation that will arise after the company succession when the transfer is declared a crime/fraud. (Ex: debt in SS…) Contracting and subcontracting (Outsourcing) : With the latest labour reform 2022, what they wanted to do is to modernize these types of contracting. Purpose: is to reduce cost. However, they wanted to avoid these types of contracts cause of the reduce of costs. With the reform they improved the conditions. These contracts are lawful practice and they are not only ruled under WS but also the Art 38 of the CE (constitution) regarding to freedom of enterprise. In these types of contracts there are: - Employer known as the main cia that for strategic, organization, economic reason is going to assign another company (contractor) to perform certain services that are related to his own business activity. This contractor can instruct another company (subcontractor) to perform the same services that where inicially contracted with the main company. In this contracts there is no transfer of workers. This contracts involve a variety of entrepreneur that will do certain services or tasks for the main company and therefore, there is a principal company and then auxiliar companies. It is important to know that the worker service corresponds to the companies own activity. There should be a subjective element there has to be 2 or more companies involves. There has to be a business element, performance or works and services by the auxiliar companies for the principal company. Liability of the principal company – Joint liability: - Salary obligations and social security with the contractor and subcontractor during the term of the contract - Liability is maintained during the year following the end of the job (salary obligations) and the following 3 years (social security obligations). No joint liability: - Construction or repair of the home of a private individual ( head of family) - When the owner of the work or industry does not contract its execution as a business activity - On Social Security obligations: when there is a negative certification, or the Social Security General Treasury does not reply in those 30 days the principle company is not liable for the previous steps that the companies had with the SS but he is still repsonsible for any debt during the contract but not the previous ones. Obligations of the principal company: duty of information – - They have the duty to inform - The inform the workers representatices and it is not indicated when they have to give the info. - Content: ▪ Identity ▪ Purpose ▪ Duration ▪ Place ▪ Nº of workers Obligations of contractor and subcontractor: duty of information – - Duty of information to: The workers ,the SS and the Workers' representatives - Content of the information: ▪ To the workers ▪ To the SS ▪ Workers rep - When to inform: ▪ To workers: prior to the strat of the provision services ▪ To the SS: identity of the main company  ▪ Workers rep: prior to the strat of the contract execution Occupational health obligations – When the workers of the principal company and those of the contractor company and, if applicable, those of the subcontractor company work in the same work center. - All companies must cooperate for the application of occupational risk prevention regulations. - All companies must establish coordination measures: on prevention and protection. The company owning the work center must: 1. Evaluate the workplaces 2. Inform the other companies ▪ risks of accidents at work ▪ prevention measures ▪ protection measures ▪ emergency measures 3. Ensure and monitor compliance with occupational risk prevention regulations. Chages with the lñabour reform 2022 – A SECTOR/ INDUSTRIAL COLLECTIVE AGREEMENT WILL ALWAYS APPLY - It is guaranteed that there will always be a sector collective agreement applicable to the contractor or subcontractor company, either the one corresponding to that company by collective bargaining, in accordance with the rules of the WS or the one corresponding to the activity carried out in the principal company. - Contractor companies will be subject to the industry collective bargaining agreement applicable to the activity carried out under the contractor agreement, or any other sector- specific agreement applicable under Title III (art. 84.2 of the Workers Statute). - And if the subcontracting company has its own collective agreement, the same will apply, but the sectorial collective agreement, has priority over the company's agreement. Suspension of the employment relationship Art 45-48 WS: The suspension of the employment contract can be defined as the temporary relaease from basic obligations to work and pay the work,with the continuity of a legal bond. Effects of suspension –