Definition of collective dismissal (number of employees concerned):
Termination of employment contracts based on economic, technical, organizational or productive reasons within a 90 day period, affecting at least
- ten workers, in enterprises that employ fewer than 100 workers;
- 10 per cent of the number of workers in enterprises that employ between 100 and 300 workers; or
- 30 workers in enterprises that employ more than 300 workers.
Termination of employment contracts of the undertaking's entire workforce is also considered a collective dismissal provided that the number of workers affected is more than 5.
Art. 51(1) ET.
NEW:The Act 35/2010 (labour market reform) amended art. 51(1) ET by introducing a definition of economic, technical and organizational and reasons linked to production.
Economic reasons can arise, for instance, when the company demonstrates economic difficulties, in situations such as current or anticipated losses, or a persistent decline in the company's revenue, which may have an effect on its viability or its capacity to maintain its usual employment levels. In such events, the business will need to prove the alleged results and to justify that the results have hindered its ability to preserve or assist its competitive position in the market.
The Labour Market Reform did not however modify the definition of collective dismissal with respect to the number of employees concerned.
Prior consultations with trade unions (workers' representatives):
Art. 51 ET: An employer who intends to carry out collective dismissals must request permission from the competent labour authority and at the same time must consult the legal representative of the workers. Consultation with the legal representatives of the workers should not last more than 30 calendar days, or 15 days in the case of enterprises with fewer than 50 workers and must cover the reasons for the collective dismissal, alternatives to dismissal and measures necessary to reduce adverse effects on workers. [NEW: The new law 35/2010 has modified the statutory duration of the consultation period: art. 51(4) ET previously referred to a consultation period of not less 30 days (15 days in undertakings with less than 50 workers), whereas the law now provides for a maximum duration of 30 days (or 15 days)].
NEW:The new law 35/2010 on the labour market reform foresees that, in the absence of legal representatives of the workers, workers can grant representation for the consultation period to a commission which shall comprise a maximum of three members amongst employees of the undertaking elected by them or three members appointed by the most representative trade union.
The new law 35/2010 also allows the employer and the employee's representatives to resort to arbitration or mediation in the event of collective dismissals instead of carrying out the consultations process (art. 51(4) ET).
Notification to the public administration:
Art. 51(2) ET: An employer who intends to carry out collective dismissals must request permission from the competent labour authority.
Notification to workers' representatives:
Approval by public administration or judicial bodies:
Art. 51 ET:
- An employer who intends to carry out collective dismissals must request permission from the competent labour authority.
At the end of the consultation process, the employer must communicate to the labour authority the outcome of the consultation.
- NEW:If there is an agreement between the parties, the labour authority will issue a resolution within 7days authorizing the collective dismissal except if it determines the commission of fraud, damage, coercion or abuse of law in the conclusion of the agreement, in which case the matter is referred to a judge (art. 51(5) ET - Note: prior to the adoption of the Act 35/2010, the timeframe for issuing a resolution was 15 days).
- If the negotiating parties did not reach an agreement upon expiry of the consultation period, the labour authority will issue a decision within a period of 15 calendar days approving or rejecting the employer's request for collective dismissal.
The decision of the labour authority must be justified and consistent with the request of the enterprise.
Approval by workers' representatives:
Priority rules for collective dismissals (social considerations, age, job tenure):
In the event of collective dismissal, workers' representatives will be the last to be dismissed (art. 51(7) ET).
Employer's obligation to consider alternatives to dismissal (transfers, retraining...):
The consultation process must cover measures aimed at avoiding or reducing the effects of dismissal (art. 51(4) ET).
NEW: art. 51(4) has been amended to include examples of such measures; it now expressly refers to redeployment, training and re-training.
A social plan containing those measures shall be drafted in undertakings with at least 50 workers.
Priority rules for re-employment: