Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

Protection of Workers' Claims (Employer's Insolvency) Convention, 1992 (No. 173) - Spain (Ratification: 1995)

Other comments on C173

Observation

1998

Direct Request

2018
2012
2007
2004
1998

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Article 8 of the Convention. Protection of workers’ claims by means of a privilege – Rank of privilege. Further to its previous comment, the Committee notes the information sent by the Government on the status of claims enjoying a special privilege. However, there is no indication in this information that claims on the available assets (namely, those arising from the activity of the enterprise after the declaration of insolvency) take priority over other types of claims enjoying a special privilege. Section 154(1) of the Insolvency Act (No. 22/2003 of 9 July 2003), as amended by Act No. 38/2011 of 10 October 2011, provides that claims on the available assets will be paid out of the property and entitlements not attached to the payment of claims enjoying a special privilege. The settlement of wage claims on the available assets may therefore be called into question should the employer’s assets, apart from property attached by special privilege, be insufficient to fulfil them. Moreover, as the Committee emphasized in its previous direct request, the other wage claims protected by the Insolvency Act, corresponding to periods of work prior to the last month preceding the declaration of insolvency, do not constitute claims on the available assets but form part of the liabilities (créditos concursales). However, claims on the available assets (including legal costs arising from the insolvency procedure and maintenance claims) take priority over these wage claims. The Committee requests the Government to indicate the measures taken or contemplated to ensure that wage claims, as defined by and within the limits of Article 8(1) of the Convention, enjoy a higher rank of privilege than most other privileged claims, whether they are classified as claims on the available assets or claims forming part of the liabilities.

Part III of the Convention. Protection of workers’ wage claims by a guarantee institution. The Committee notes the observations made by the Trade Union Federation of Workers’ Committees (CCOO) and the General Union of Workers (UGT) in communications dated 13 and 31 August 2012, respectively. According to the CCOO and the UGT, Royal Legislative Decree No. 20/2012 of 13 July 2012 issuing measures to guarantee budgetary stability and develop competitiveness has drastically reduced guarantees relating to workers’ claims in the event of employer insolvency. Firstly, the amount of outstanding wages covered by the wage guarantee fund (FOGASA) is now only twice the interoccupational minimum wage (SMI) for a maximum period of 120 days, whereas the said amount previously corresponded to three times the SMI for a maximum period of 150 days. Secondly, the ceiling for allowances due in the event of dismissal or termination of the employment contract remains fixed at one year’s wages but that the daily wage serving as the basis for calculation is now limited to twice, and no longer three times, the SMI. Thirdly, in bankruptcy proceedings, allowances due from FOGASA will be calculated on the basis of 20 days’ wages per year of service, up to a maximum of one year’s wages, without the daily wage serving as the basis for calculation exceeding twice the SMI, whereas the previous limit was three times the SMI.

The Committee notes that, in its reply to the observations of CCOO and UGT received on 20 November 2012, the Government indicates that the framework for the protection of wage claims by FOGASA, which was introduced by the Royal Legislative Decree No. 20/2012, is virtually identical to the framework that was applicable before the adoption of Act No. 43/2006 of 29 December 2006 on economic growth and employment. The legislation currently in force is, however, more favourable to workers in a certain number of points, in particular, in so far as it covers compensation for termination of temporary or fixed-term contracts. The Government has also provided statistical data showing a considerable increase between 2008 and 2012, of the number of protected workers (from 90,318 to 198,574) and of the sums of compensation paid by FOGASA (€434,015 in 2008 and €1,166,200 on 30 September 2012). This evolution is due to the severe economic crisis, the significant number of enterprises that have ceased their activities and the high rate of unemployment. In this context and given the impossibility of increasing the resources of FOGASA by raising the employers’ contribution, the only option in order to maintain its sustainability was to reintroduce the ceilings that were applicable to benefits before the legislative amendments introduced in 2006, while preserving the abovementioned improvements. Finally, the Government underlines that, in any event, the level of protection afforded by the national legislation is higher than that required under the Convention.

The Committee notes the Government’s explanations and requests it to keep the Office informed of new developments relating to the regulation of the protection of wage claims by FOGASA and to transmit together with its next report statistical data on the evolution of the number of employees covered by the relevant legislation, the sums paid by the Fund and the number of bankruptcies registered per year.

Part IV of the report form. Application in practice. The Committee notes that the UGT also refers in its observations – as does the Government in its reply – to the substantial increase in the amount of benefits paid by FOGASA and in the number of enterprises affected while noting that budget cuts in 2012 reduced the amount of benefits by 10.7 per cent and the body that collects employer contributions has not repaid the amount of these contributions to FOGASA since May 2011. The UGT concludes from this that a considerable financial imbalance is to be expected in the accounts of the latter. Finally, it mentions that the large increase in the number of cases processed has not been matched by an increase in staff. Consequently, in certain agencies, the average time for processing a file is more than six months, whereas the legal maximum is three months. The Committee requests the Government to send in its next report any comments it may wish to make in reply to the observations of the UGT on this point.