As a result of the Supreme Court Judgment of March 29, 2022, we raised the resolution to the following question: Can the calculation of the variable be modified at the company’s whim?
For the legal representation of UGT, a collective conflict lawsuit was filed claiming a substantial modification of the working conditions, which was heard by the Social Chamber of the High Court of Justice of the Basque Country. The lawsuit requested that the business decision to modify the calculation of the variable be declared as a substantial modification of the working conditions and that, having the company obviated the procedure provided for in the Workers’ Statute for the introduction of said modification, it be declared, with character principal, invalid the decision adopted by the company and, in the alternative, unjustified, condemning the defendant company to replace the way of calculating the remuneration of the incentives to the one made prior to the modification. Specifically, during 2019 the variable remuneration had the following sections: achieving 90% to 99% of the objectives meant applying 0.5% of the sales generated; from 100% to 119.9% of the objectives, 1% of the sale achieved was applied.
In January 2020, the company communicated the new method of calculating the variable remuneration for that year for store personnel and managers, through individual written communication, which contained the following accrual conditions for variable remuneration: (i) the remuneration variable will be calculated based on the working day of each worker; (ii) the first tranche comprises 100% of the target, to which 0.75% of the sale will be applied; (iii) the second tranche comprises up to 110% of the objective, to which 1% will be applied; (iv) the third tranche comprises up to 120% of the target, to which 1.5% will be applied.
The plaintiff union argues that the new way of calculating the variables for 2020 for dependents and managers supposes a substantial modification in the way of calculating the incentives to date, which in turn results in the reduction of the incentives for workers in part-time, which to date did not occur, since the same was charged regardless of whether the day was full or part. It also points out that the company has not justified the economic, technical, organizational or production reasons that have led it to make such a burdensome decision that it lowers the amount of workers’ wages, affecting their remuneration system, nor has it followed the planned procedure in article 41 of the ET. The Labor Chamber of the High Court of Justice of the Basque Country issued a ruling declaring the nullity of the method for calculating the remuneration for incentives implemented by the company for the year 2020.
Challenged the sentence before the Supreme Court by the company, the Chamber considers that the new method of calculating the variable remuneration by objectives, compared to the one in force in the previous year, implies breaking the same treatment that in this matter was being dispensed to full-time and part-time workers. Likewise, the modification alters the sections of achievement of objectives and the percentage to be applied to each section for which there is no doubt, according to the Court, that we are facing a substantial modification of the working conditions that fits perfectly in article 41 of the ET. In this way, the modification introduced thus alters the remuneration system and the salary amount, without the company having justified economic, technical, organizational or production reasons that, according to the indicated precept, allow its approach, as well as its perceptive negotiation. The omission of said requirement irrevocably leads to the nullity of the business decision and therefore the need to replace the previous system and open a negotiation process with the guarantees of the aforementioned statutory precept.
In short, the balance in labor relations continues to pivot on negotiation: very probably the safest legal environment.
Misericòrdia Borràs, partner in the Garrigues Labor Department.