The Increasing Importance of Labour Law Advice in Companies

The starting point: strengthening labour and social security law as a legal discipline after the COVID-19 pandemic

Certainly, Spanish society has learned many and varied lessons from the COVID-19 pandemic. Practically all of these lessons have been learned after considerable personal and professional efforts in sectors as diverse and important as, for example, health, education, security, transport and food. And this has been at both national and international levels.

Such exceptional circumstance has also been reflected in the legal sphere. However, contrary to what might initially have been thought, the pandemic has not affected the very different legal disciplines in the same way. Conversely, as is well known to all, the bulk of the numerous measures adopted by the different national legislations has fallen almost exclusively on labour and social security law and, more specifically, on the thousands of women and men who, at great personal and professional cost, have had to deal with the emergency regulations issued for this purpose in the last four years.

This having been the case, there can be no doubt that this specific legal discipline has more than come of age. And not only that, labour and social security law has been extraordinarily strengthened, positioning itself on its own merits among the legal specialities of greatest social and economic importance today. In fact, this branch of knowledge is, nowadays, a legal practice that is essential for the smooth running of companies.

The importance of labour law discipline in post-pandemic business counselling

An obvious consequence of the above is the growing importance of the labour law discipline in advising companies. Gone are the days when labour and social security law was relegated to the background by reference to other apparently more important specialities in the field of business, such as commercial law or civil law.

In fact, nowadays it is absolutely inadvisable (not to say foolhardy) to start or develop any business initiative outside this specific branch of legal knowledge; all this, moreover, irrespective of factors such as, for example, the sector of activity in which the company is engaged and/or its organisation or size. From many different perspectives (especially from the regulatory and jurisprudential points of view), the evolution of labour law is unparalleled and unrestrained, which is leading to the appearance of new and very important legal challenges that legal operators must face and on the successful overcoming of which will depend, to a large extent, the proper running of the business for which the advice is provided.

Thus, the intrinsic importance of this already well-established legal discipline requires companies to have the best possible legal-labour consultancy services – advice which, together with other traditional skills, must nowadays be characterised by the following two key aspects:

• its necessarily transversal nature; and
• the need for permanent updating.

Main characteristics of corporate legal-labour counselling in the post-pandemic era

Even without leaving the specific field of labour relations and public social protection, the first of the aspects that must necessarily characterise today’s labour law consultancy for companies is the formation of increasingly numerous and cross-cutting teams. Indeed, the very diverse legal challenges facing Spanish and Spanish-law-concerned companies in this area are also numerous and cross-cutting. It is no coincidence that matters as diverse as, for example, access to employment, employment contracts, reconciliation of work and family life, collective bargaining, corporate restructuring, the digitalisation of labour relations and social security, require continuous and recurring attention in the day-to-day work of companies. Attention that also refers to matters that are not specifically labour-related (eg, data protection, insolvency law, diversity and equality, environmental protection, and so on).

However, in addition to its necessarily cross-cutting nature, labour law advice must also be characterised by the need for permanent (practically daily) updating on the part of legal operators and, in particular, law firms and law offices. Moreover, such is the current regulatory and jurisprudential disorder (national and supranational) that without the help of the most excellent specialised advisers, companies would not be able to take full account of the many different legal obligations that are currently incumbent on them in the specific scenario of labour relations. In fact, it is virtually impossible for industrial relations teams in companies to keep up to date with the many different legal provisions (national and international; statutory and regulatory) and/or case law that have a daily impact in the field of labour relations.

Hence, together with the need for transversality, it can be argued that the increasingly excessive production of regulations and jurisprudence is currently one of the main challenges facing legal operators.

The current legislative trend: the progressive abandonment of emergency legislation as a prerequisite for the configuration of a new model of labour relations

Undoubtedly, both characteristics of labour law advice were put to the test in the exceptional context of COVID-19. In fact, the emergency legislation that characterised that period in its early years constituted an extraordinary stressor to test the greater or lesser professional excellence of those operating in the field of labour relations. Unfortunately, and contrary to what would initially have been desirable given the extraordinary effort made up to then, this stressor element has been maintained over time until practically the end of the last legislature. All of which has meant an undeniable physical and emotional strain for many of those legal operators.

All in all, the current legislative trend seems to be the progressive abandonment of emergency legislation, in general, and of the Royal Decree Law, in particular, as the main tool of the pseudo-legislative activity carried out until the middle of last year by the Spanish government. This not only means returning to the Spanish Cortes Generales the leading role that they undoubtedly deserve in this respect, but also allows legal interpreters to know in advance the main legislative projects launched in Spain in the field of labour relations.

It is precisely in this new context of legislative stability that the configuration of a new model of labour relations for the 21st century is expected. The social and economic model in which these relations are developed today is totally different from the scenarios that existed in 1980 (the year in which the first Workers’ Statute was approved in Spain). In this sense, in the present decade a profound revision of the very different labour law institutions must be carried out, starting even with such classic topics as the very definition of the concept of the working person. In fact, this task has already begun within the framework of social dialogue, with the different social agents (trade unions, employers and government) currently working on the so-called Statute of the 21st Century.

The most relevant legislative projects underway

Apart from this general objective, several bills are already in the parliamentary pipeline (eg, Draft Law amending the Workers’ Statute for the transposition of Directive (EU) 2019/1152 of 20 June 2019 on transparent and predictable working conditions, Draft Law on Families or Draft Law on Sustainable Mobility). Alongside these, new projects have recently been announced by the Spanish government through its Annual Regulatory Plan (2024) (for example, the Law regulating the Youth Guarantee System, the Integral Law for the promotion of the social economy and the Law regulating business representation in the field of small and medium-sized enterprises).

Without wishing to be exhaustive, given the limited space available, the two legislative projects considered to be of greatest relevance in the field of labour relations are described below.

• Amendment of the Workers’ Statute on reduced working hours and leave to complete the transposition of Directive (EU) 2019/1158 of 20 June 2019. Specifically, three objectives would be pursued with this project.
1. Reduce the current maximum legal working week of 40 hours to 37.5 hours per week by 2025, without any reduction in pay. Progressively, during 2024, the proposed reduction would reach 38.5 hours per week. Although initially designed to promote the reconciliation of each worker’s personal and family life, there is no doubt that such a measure will have a major impact on companies with very limited human resources management margins (especially small and medium-sized enterprises).
2. Strengthen the time recording instruments with the use of new technologies to ensure compliance with the working day in all companies, while adapting the sanctioning regime to guarantee strict compliance with the existing regulations in this respect. As announced by the Ministry of Labour and Social Security, at the heart of this proposal lies the government’s interest in greater telematic control of the different time records (of working hours, part-time work and overtime) – control that would be carried out by telematically connecting these records with the Labour and Social Security Inspectorate (Inspección de Trabajo y Seguridad Social).
3. Complete the transposition of Directive (EU) 2019/1158 of the European Parliament and of the Council of 20 June 2019 on reconciling family and working life for parents and carers. The transposition of this Directive is already well advanced in Spain and this proposal refers to the paid or unpaid nature of the parental leave of up to eight weeks that workers can request when caring for a child under eight years of age.
• Amendment of the Workers’ Statute on dismissal. Specifically, this draft would seek to establish new guarantees for workers in the event of dismissal, complying with the European Social Charter, reinforcing causality in cases of termination of the employment relationship and eliminating the automatic dismissal of people with a supervening disability – this is in response to the new dogmatic debates that the Spanish social order is already facing.

Main points of interest in the judicial field

Without prejudice to the success of these or other legislative projects that are yet to come in view of the delicate balance of power in the current Spanish political landscape, there is no doubt that for any legal operator the main point of interest in the Spanish judicial sphere necessarily involves the urgent renewal of the General Council of the Judiciary. This is by no means alien to the social jurisdiction. And the fact is that, apart from many other vacancies in this judicial order, the current composition of the Social Division of the Supreme Court (the main interpretative body in the field of ordinary law) is in a worrying situation. In fact, out of a maximum of up to 13 members, the Chamber is currently made up of only seven judges, a circumstance which has a clear qualitative and quantitative impact on the peaceful development of labour relations.

Apart from this institutional situation, there is no doubt that the main debate currently taking place in the Spanish labour courts concerns whether or not the Spanish system of statutory severance pay for dismissal is in line with the provisions of the revised European Social Charter. And, more specifically, whether or not it is possible to request complementary financial compensation to repair or compensate possible damages of a very diverse nature suffered by the worker whose employment contract has been terminated, in addition to the legally established compensation.

Certainly, as has already been said, this is a matter that seems intended to be dealt with specifically by parliament. However, until such a problematic issue has been resolved, the judicial casuistry will be in place, to the serious detriment of the principle of legal certainty, with reference to the very numerous contractual terminations carried out by companies. Moreover, bearing in mind that the European Committee of Social Rights has already expressly ruled on the matter, the judicial debate has now shifted to the greater or lesser value to be given to the decisions of this body (the main interpreter of the revised European Social Charter) in application or not of the constitutionally required judgment of conventionality.

The increasing importance of equality and diversity in highly digitalised industrial relations

Regardless of the final destination of the different legislative projects that have been set in motion and/or the jurisprudential doctrine that Spanish courts of social jurisdiction may decide to issue in relation to each conflictive case, there is no doubt about the increasing importance of equality and diversity in the field of highly digitalised labour relations. It is no coincidence that the current volume of regulations on equality, diversity and work-life balance is enormous, and is also characterised by the great technical difficulty of implementation which, in addition to the constant updating of regulations and case law, requires the design and co-ordination of very different strategies at the highest corporate, national and international levels. In fact, in 2024, we can already speak of the birth of a new legal discipline in the field of labour relations and human resources: equality, diversity and work-life balance.

Precisely for this reason, it is both essential and obligatory for companies to have a team specialised in this area, capable of knowing each and every one of the new obligations that are constantly being introduced in the different regulations, as well as with the capacity to design policies that enable not only compliance with the law but also the promotion of equality and diversity in the workplace as a tool for employer branding and/or attracting and retaining talent. As an example of the extraordinary practical importance acquired by this matter, note how the regulations of Spain consider not only conduct, acts or criteria that violate the right to equality, but also inaction or neglect of duties in this regard, to be a violation of the right to equality.

It is, therefore, highly advisable to adopt cross-cutting measures to ensure a proactive attitude on the part of companies by adopting protocols against discriminatory harassment or codes of good practice in many different areas. This is particularly true in the area of increasingly digitalised labour relations, which require companies to be more attentive and careful with regard to the labour rights at stake (essentially, privacy and dignity of workers).

On the burden of increased regulatory requirements on companies: labour compliance

Finally, the authors would not like to end this commentary without making a brief reference to the increasing need for companies to have an adequate labour compliance policy.

Certainly, from a strictly judicial point of view, the need for the highest level of labour law advice is obvious. In fact, when companies have a legal problem in this area, they usually make every effort to seek the best possible advice. Strangely enough, however, this is not always the case with regard to the increasing number of labour law requirements imposed on companies. So it is only when they receive the corresponding administrative sanction from the competent labour authorities that many companies then consider seeking the services of a truly specialised labour law adviser.

If, in addition to the above considerations, there is one thing that should characterise excellent labour law advice, it is that it should not only be reactive (on the occasion of the various legal matters that companies may have to deal with ad casum), but also, and especially, preventive (on the occasion of the ever-increasing regulatory demands on companies). This is precisely where labour compliance is becoming increasingly important. This is basically because the demand for regulatory compliance in companies is nowadays absolutely overwhelming, and the time for those who have not paid due attention to this circumstance has passed.

As an example of the above, suffice it to say that in addition to the existing regulatory requirements (time and attendance register, salary register, equality plan, digitalisation protocols, protocols against harassment at work, application of preventive regulations, balanced presence of men and women on boards of directors, etc), new requirements (sustainable mobility to work plan, LGTBI protocol, and others) are expected to be added.

Conclusion

What has been indicated so far leads inexorably to a change in the type of advice and management of labour relations in Spain. Whereas until now the legal sector has played an almost exclusively reactive role (providing legal representation in the event of legal disputes that arise), the new legal operator must be able to offer strategic legal-labour advice on the basis of the new policies and codes that permeate the current labour relations scenario. In short, the labour law practitioner of the 21st century must be able to anticipate problems, be permanently updated in an increasingly transversal discipline and possess an excellent technical mastery capable of outperforming artificial intelligence in the design of strategies and policies aligned with the business objectives of the companies he or she advises.