The modification of the paid leaves’ regime, derived from the entry into force of Royal Decree-Law 5/2023 of 28 June, established new minimum paid leaves to care for sick children and family members and to reconcile personal and family life regulated in article 37.3 of Royal Decree 2/2015 of 23 October, approving the Workers’ Statute Law (“WSL”, hereinafter), giving rise to multiple doubts as to its effective application. 

➤ DOWNLOAD (PDF): CURRENT_REGULATION OF_PAID_LEAVES

The reform of the appeal in cassation in the different jurisdictional orders.

Last 29th of June, Royal Decree-Law 5/2023 of 28 June was published in the Official State Gazette (“BOE”), introducing various reforms to the rules regulations proceedings in the different jurisdictional orders.

The reform of the appeal in cassation in the different jurisdictional orders. Download>

Last Tuesday, 21st February 2023, the Law 2/2023, of 20 February, was published in the Official State Gazette (BOE) as a transposition of the Whistleblowing Directive, which regulates the protection at EU level of persons who report breaches of EU Law. The Law will enter into force 20 days after its publication in the Official State Gazette, i.e. on 13th March 2023.

 ➤ Download Law 2-2023 of February 20, 2023

On September 29, 2022, Law 18/2022, of September 28, 2022, on the creation and growth of companies, was published in the Official State Gazette (BOE).

The purpose of this Law is to promote the creation and growth of companies through the adoption of measures to expedite their incorporation and to facilitate business development. In addition, this law has the purpose to promote the access to more and better means of financing and the reduction of commercial delinquency.

Among the measures adopted in this text, we must highlight the following:

Obligation to issue and send electronic invoices

This Law modifies Law 56/2007, of December 28, 2007, on Measures to Promote the Information Society, and requires the obligation to all businessmen and professionals in their commercial relations to issue and send electronic invoices. They must comply with all the requirements relating to invoicing. This modification contained in Article 12 modifies Article 2 bis of Law 56/2007.

With this modification, the recipients will be allowed to access through electronic means to the invoices of the companies of the last 4 years, being able to read and download them free of charge and without resorting to other means. In addition, this modification not only applies to the term of the contract, because once the contract has been terminated, this right of access will remain in force, unless the recipient wishes otherwise.

These obligations entail the promotion of digitalization, the reduction of transaction costs and the facilitation of transparency. Failure to comply with these obligations is an administrative offence punishable by fines of up to 10,000 euros.

Measures to expedite the creation of companies

Thanks to this measure, the economic cost is reduced and the procedures for the incorporation of companies are simplified, establishing the possibility of incorporating a Limited Liability Company with a share capital of 1 euro, as opposed to the legal minimum of 3,000 euros established until now. In this way, the possibility of incorporating in successive formation regime disappears.

Likewise, the telematic incorporation of companies is facilitated through the single window of the Information Center and Network for the Creation of Companies (CIRCE) and the Single Electronic Document (DUE), guaranteeing a reduction in the time required for their creation and in the notary and registry costs. This measure establishes an informative obligation for notaries and intermediaries who advise and participate in the creation of LLCs, and they must communicate the advantages of using the Entrepreneur Service Points (PAE) and the Information Center and Business Creation Network (CIRCE).

Those companies that wish to incorporate as an LLC with a capital stock of less than 3,000 euros must allocate at least 20% of the profits to legal reserves until the sum of the capital stock and the legal reserve reaches 3,000 euros. In the event of liquidation with insufficient equity to meet the payment of corporate obligations, the shareholders will be jointly and severally liable for the difference between the amount of 3,000 euros and the amount of the subscribed capital.

The application of the DUE to the incorporation of the ordinary LLC implies the repeal of Title XII of the Capital Companies Act, relating to the new company limited by shares.

Measures to prevent late payment

In order to improve the compliance with the Law against late Payment, three new features are established:

The obligation to issue and send electronic invoices in commercial relations is extended to all companies and self-employed persons.

It is established, as an incentive, that companies which do not comply with the payment terms established in the Law to against late Payment, will not be able to access a public subsidy or will not be able to be a collaborating entity in its management. The public procurement regulations are reinforced to guarantee that the awardees pay in time the price agreed with the subcontractors.

A State Observatory of Private Delinquency will be created, which will be in charge of the monitoring and evolution of payment data and the promotion of good practices in this area.

Financial support for business growth

The Law adapts the national regulation to the European crowdfunding regulations, introducing more flexibility for these platforms to provide their services in Europe.

Regarding investment limits, a single individual investment limit per project is established for retail investors, which is set as the higher of an amount of €1,000 or 5% of wealth (excluding real estate and pension funds). In case of retail investors that investing above the limit, they will receive a risk warning and they will have to give their express consent to the crowdfunding service provider. In addition, an investment limit per project of EUR 5 million is set, which may be exceeded up to the limit provided for in the legislation of each Member State. Beyond this limit, the issuance of a prospectus is required.

Finally, a new category, “portfolio management”, has been included to allow the provider of participatory financing services to invest funds on behalf of the investor and reforms have been introduced to boost and improve collective investment and venture capital in Spain.

Improved of the regulation and removal of obstacles to economic activities

Thanks to this new Law, greater cooperation and trust is generated between the Public Administrations and the windows for company complaints are reinforced, speeding up this procedure.

In addition, the catalogue of economic activities exempt from licensing has been expanded to include those activities that have been considered innocuous by at least one Autonomous Community.

Entry into force

In general, the Law will enter into force on 18/10/2022, but three additional deadlines are established: 10/11/2022 for the legal regime of the participatory financing platforms; one year after the approval of the Regulatory Development for article 12, relation to electronic invoicing between entrepreneurs and professionals with an annual turnover of over eight million euros; and after two years of the approval of the Regulatory Development for article 12, relation to electronic invoicing for the rest of entrepreneurs and professionals.

I. Legislative News

The Spanish Parliament passed Law 15/2022, of 12 July, on equality of treatment and non-discrimination.

The Spanish Parliament has approved Law 15/2022, comprehensive for equal treatment and non-discrimination, which establishes a heterogeneous and transversal set of measures to guarantee real and effective equality and the prohibition of discrimination.

In this sense, in addition to the classic discriminatory elements, new ones are included, such as age, gender expression, illness or health condition, serological status and/or genetic predisposition to suffer pathologies and disorders, language or the socio-economic situation.

In addition, new cases of discrimination are regulated, such as discrimination by association, discrimination by mistake or multiple discrimination.

The legislative text includes a series of particularities related to labour law, with specific measures in the field of employment and self-employment, as well as in collective negotiations. In this regard, for instance, any discriminatory conduct in terms of access to employment, training, professional promotion, pay, etc. is prohibited.

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II.         Case Law News

An employee may be disciplinarily dismissed for verbal abuse towards colleagues at Christmas dinner.

It is possible to disciplinarily dismiss an employee for acts which, even if carried out outside working hours, are related to the work activity. This is the statement made by the Supreme Court, which, revoking the appeal judgement, considers the dismissal of an employee, who verbally and physically insulted several colleagues at the company’s Christmas dinner, to be justified.

In this regard, the judgement underlines that “it is clear that the alleged conduct is affected by and linked to the employment relationship: it has an impact on other company colleagues, affecting the coexistence between them and the reputation of the employer itself”. Therefore, as it transcends the private relations between colleagues and has repercussions in corporate terms, “the disciplinary sanction of dismissal and its classification as fair” cannot be invalidated.

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The Supreme Court corrects its doctrine on the consequences of non-compliance with the prohibition on pro rata payment of extraordinary wages.

The Supreme Court has corrected its doctrine regarding the case of pro-rata payment of extraordinary wages, this possibility being expressly prohibited in the applicable collective agreement.

Thus, in the particular case subject to the proceedings, although the collective agreement expressly prohibited the possibility of pro rata payment of extraordinary wages, the company paid the employee that amount on a pro rata basis, not complying with the provisions of the agreement.

In this regard, the highest court, correcting its recent doctrine on this matter, states that non-compliance with the content of the collective agreement cannot give rise to a financial penalty, given that the agreement does not stipulate this specific sanction. Otherwise, according to the opinion of the court, the employee would be unjustly enriched.

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Voluntary early retirement is not available in the event of termination of the contract at the employee’s request due to serious and liable breach of contract by the employer.

The Supreme Court, reversing the appeal judgement, has held that early retirement for reasons not attributable to the employee (with more favourable access and financial conditions compared to voluntary retirement) is not available in those cases in which the dismissal has been terminated at the employee’s will in cases of serious and liable breach by the employer (such as, for instance, in cases of non-payment of wages).

In this regard, the Supreme Court recalls that the cases of access to involuntary early retirement, set out in article 207 General Social Security Act, constitute a “numerus clausus”, being provided only for cases of company restructuring that prevent the continuation of the employment relationship. Therefore, as the Supreme Court states, “the law excludes all other situations which give rise to the termination of the contract and which are also due to a cause not attributable to the employee”, which would include termination of the contract due to serious and liable breach of contract by the employer.

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Hitachi Energy organized a round table with customers on 7 April to discuss current world events and their possible impact on the company.

Ignacio Guillén, from Giménez Torres Abogados, spoke alongside Sven Hoffmann, from Heussen, Germany; David Gu, from JunHe, China; and Philip D’Costa, from Penningtons Manches Cooper, UK, reaching a hearing of 70 Multilaw member lawyers, world-leading network of independent law firms of which Giménez Torres Abogados is a founding member.

FIRST COURT DECISION IN SPAIN. REBUS SIC STANTIBUS

On 25 September 2020 the First Instance Court No. 81 of Madrid passed a judgment adopting precautionary measures in application of the rebus sic stantibus clause.

The doctrine of the rebus sic stantibus clause is a reasonable theoretical construction from an equity point of view but devoid of regulation. It is, above all, a clause of exceptional and extraordinary application.

The fact is that rebus sic stantibus is a Latin expression that can be translated as “things being as they are” and refers to a principle of Law by virtue of which it is understood that the stipulations established in contracts take into account the concurrent circumstances at the time of their conclusion, that is to say, any substantial alteration of these circumstances could modify those stipulations.

However, this clause vigorously clashes with the principle of contractual security, better known as pacta sunt servanda or “the pacts [agreements] are made to be fulfilled”, hence the exceptionality of the clause under consideration.

Consequently, only atypical and extraordinary situations caused by “absolutely unforeseeable circumstances” and resulting in an “exorbitant disproportion between the services provided by the parties” will lead to a loss of contractual security for the purpose of applying the rebus sic stantibus clause, according to the Spanish Supreme Court.

The first judgment passed in Spain in application of this exceptional clause, motivated by the critical economic scenario (as a consequence of the current health emergency situation) settles in a precautionary basis ––before the trial takes place, and in order to preserve the effectiveness of a possible definitive estimation of the claim–– the controversy between: (i) the lessee of a night club whose opening is not permitted from the time of the declaration of the state of alert and until further notice; and (ii) the lessor owner of the night club who did not accept to the lessee’s request to suspend the payment of the rent.

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1. Background

On March 14, the Spanish Government approved the declaration of the state of alarm to deal with the health emergency caused by COVID-19 in Spain, through Royal Decree 463/2020.

This Royal Decree established “the suspension and interruption of procedural periods“, that specified that their calculation “shall continue at the moment the Royal Decree or its extensions end“.

Besides it stated the “suspension of administrative deadlines” and the substantive deadlines (i.e., the corresponding deadlines of the actions and rights that could be affected by the statute of limitations and lapse ––“caducidad” and “prescripción” in Spanish Law).

So far, it seemed clear that the deadlines would be continued when the state of alarm ended, but they would not be restarted.

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On April 28, 2020, the first procedural reform was made to meet the challenge posed by COVID-19 to the Administration of Justice. To this end, the Royal Decree-Law is divided into three chapters; the first dedicated to procedural measures; the second with regard to measures in the field of bankruptcy and corporate; and the third in relation to measures of an organizational and technological nature. We now turn to a summary of the most significant ones.

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Decreto-16-20-medidas-procesales-EN.PDF

Measures in the field of leasing

The self-employed workers and small and mid-sized enterprises (SMEs) that are tenants of buildings intended for (i) use other than as housing or (ii) industry, which meet the requirements set out below, may request from the lessor if and to the extent that the latter is a public housing company or entity or a large holder, a deferment on the payment of rental income. Such deferment must be accepted by the lessor unless the parties had previously come to an agreement in relation to the postponement of the payment of the rental income or a reduction in its amount, in which case the provisions of such prior agreement will apply (art. 1).
The requirements to be met by the beneficiaries of this deferment on the payment of rental income are as follows (article 3):

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– NOTE_ON_ROYAL DECREE-LAW _(leases).pdf