Rules of member states that do not provide for applying the law on collective dismissals to terminations of employment relationships caused by the employer's retirement are contrary to European law. The case examined by the Court involved eight Spanish employees who challenged the dismissal imposed on them when the company closed due to the employer's retirement on the grounds that the union consultation phase had not preceded the dismissal. The Spanish court has asked the EU Court of Justice to determine whether or not the Spanish legislation-which provides for a union consultation procedure in the case of collective dismissal unless the termination was caused by the employer's retirement-is in compliance with EU law, therefore, whether or not this exception is consistent with Directive No. 98/59/EC on collective redundancies. In its judgment of July 11, 2024, in Case C-196/23, the Court of Justice ruled that Directive No. 98/59/EC must apply in all cases of termination of an employment contract that was not the employee's intention. The directive aims to precede collective dismissals by consulting employee representatives and obtaining information from the relevant public authority. Therefore, in the Court of Justice's opinion, the Spanish rule is contrary to the Directive since it does not require union consultation before a mass layoff due to the employer's retirement. Furthermore, the court clarifies that the current case differs from a situation where a business closes due to the employer's death. This is because a retiring employer can generally engage in union consultations during collective dismissal procedures. The Court of Justice, therefore, declared the Spanish legislation at issue contrary to EU law.
2024 - Morri Rossetti
