Changes to rules governing collective redundancies

At a glance

• Royal Decree 608/2023, which introduces changes to the rules governing collective redundancy procedures, was published on 11 July and came into force the following day (12 July 2023).

---

The Royal Decree 608/2023 creates a major change in the rules governing collective redundancies. Under the new rules, employers are required to give six months’ notice (electronically) to the competent labour authority, those representing the company sector and the most representative trade unions if they plan to close one or more workplaces definitively, provided that this involves the dismissal of 50 or more employees.

The notice must be given before the start of the consultation period, which usually lasts a maximum of 30 days. However, the law does not offer further details as to which steps are to be taken during those six months.

The new rules represent a substantial change in the regulation of collective redundancies and impact the process of informing the workforce that their jobs are at risk.

Prior to the new changes, employers were required to give notification to the employees to be affected by the redundancy, giving them seven days (or 15 if they did not have a works council) to choose their representatives for the negotiation phase. However, the new rules extend this whole process.

Risks posed by the new rules

• By extending the redundancy process, the new rules offer unions more time to prepare defences and take socially pressurising measures such as organising industrial action.
• The new rules could potentially lead to employees taking individual measures to make their dismissal more complicated.
• Where employees become aware that the workplace is to close down, there could be a potential loss of incentive to continue working in such a company, ultimately leading to a negative impact on the company’s productivity, economic position and ability to win client contracts / negotiate favourable terms with suppliers.

Exception to the new rules

If the closure of the workplace is precipitated and unforeseen, the company may miss the six month deadline, provided it gives notification as soon as it is able to. However, in such a case, the workplace will be required to provide a compelling reason as to why an earlier notice was not given. The Royal Decree does not provide further detail as to when a delay may be considered justified and / or what the consequence of such non-compliance may be when the delay is declared unjustified.