Spain: Legal Highlights Of Doing Business In Spain By A Foreign Investor - Part 14 of 1

Last Updated: 18 November 1995
9.9 Transfer of the business

Any changes of title to the business, work centre or independent productive unit shall not terminate per se the labour relation. The new employer will be subrogated to the former.

Any transfer should be notified to the workers' representatives. The transferor and the transferee will be jointly and severally liable during three years for all outstanding labour obligations arising before the transfer.

They will be equally liable for all obligations arising after the transfer should the transfer be deemed a criminal offence.

9.10 Social security system

All staff must be registered with the Social Security System. Payments to the system vary according to different factors, but the average total payment may be estimated at 38.19% of the employee's salary, to be paid about 6.40% by the employee and the remaining 31.79% by the employer.

There are unemployment benefits (64), as follows:

a) To have a right to the unemployment benefit, the minimum period during which an employee must contribute to the unemployment benefit under Social Security has been increased from six to twelve months.

b) The scale that linked the time during which contributions were made, to the period an unemployed worker has a right to receive unemployment benefit has been modified. Thus, for example, such a worker had a right to three months' benefit if he had contributed for between six and twelve months. Now the scale ranges from 2,160 days of contributions which allows 720 days' unemployment benefit to between 360 and 539 days (12 to 18 months) which allows 120 days' unemployment benefit. This is referred to a period of six years prior to the actual unemeployment situation.

c) The rates of unemployment benefit payable have been modified. Formerly they ranged from 60 to 80% of the unemployed's last basic salary and now they range from 60 to 70%, with the upper cap of 170% of the interprofessional minimum salary or 220% of said salary should the unemployed have children, and a minimum cap of 75% of the interprofessional minimum salary or 100% should the unemployed have children.

d) For the beneficiaries of unemployment benefit to lose such a right it will suffice for them to refuse, without a valid reason, an adequate offer of employment or the participation in social co-operation work, employment schemes, training programmes or professional re-training. Before such a loss occurred after a second rejection.

e) In the case of unemployed persons of over 45 years of age, the period has been increased from 6 to 12 months during which they may carry out a temporary job while they are unemployed, without it affecting their right to obtain unemployment benefit, although this will be suspended until the end of the temporary job.

There are also temporal incapacity benefits.

9.11 Foreign personnel

Foreign personnel working in Spanish companies require a work permit and a residence permit, otherwise they are prevented from working.

There are several classes of work permits. These are given on the basis of an employment contract with a Spanish based operation. At present, it is quite difficult to obtain such permits since the Administration has the power to grant or deny them, at its discretion, and the present level of unemployment in Spain has caused the Administration to grant permits only according to restrictive criteria. Furthermore a special visa must be obtained in the country of origin prior to entry into Spain, otherwise it is virtually impossible to request a work permit from the Spanish authorities.

Special provisions have been laid down for citizens of EC countries.

Under the transitory periods envisaged in the Treaty for the accession of Spain to the Communities, citizens of EC countries wishing to work as employees in Spain were required to obtain a residence permit and a work permit until December 31st., 1992. Thereafter they would be free to work in Spain. There were also special and more flexible rules for citizens of EC countries who were working in Spain prior to Spain's accession and that were authorised to do so after the accession on January lst., 1986. The transitory period was then shortened to 1st January 1992.(65)

It is no longer necessary for Spanish and Portuguese nationals to hold work permits so that they may work as salaried or self-employed workers in any of the Member States and vice versa. The same rules will apply to the nationals of a Member State who move to another country as those which apply to the nationals of the latter country. It will not be possible to discriminate against them when they apply for a job. This equality of opportunities involves all working conditions, among them remuneration, social benefits and health care. The rights cover the spouse and children younger than 21 years of age of the community citizen.

Only the relations between Spain and Portugal with Luxembourg were excluded from this regime. The free circulation of Spanish and Portuguese workers in Luxembourg, and vice versa, is effective since January 1st., 1993.

In the event of jobs (or simply stays) which are due to last for more than three months but less than one year, it will be necessary for the worker (or the visitor) to apply for a residence permit, without this being a prerequisite before entering into an employment contract. This permit is only necessary for purely administrative purposes, which is why if the worker does not apply for one he/she will be penalized, but not lose his/her employment. If the intended job or simply the stay in the country will last for more than one year, a residence permit must be obtained for an extendable five years.

A special scheme has been devised whereby the worker will have the right to claim unemployment benefit for a maximum of three months, whilst he/she looks for work in another community country.

Restrictions on the free circulation of workers will only be possible for public order, security and public health reasons.

In no event it is necessary to hold a work permit to be a member of the Board of Directors of a company, Single Administrator or Joint Administrator as long as no executive role is played by such member.

10. THE CONSUMERS' PROTECTION

10.1 Background: Sources of liability

In very general and broad terms there are three main sources of obligations and potentially of liability under Spanish law: (i) the law, (ii) the contract (and quasi-contracts) and (iii) any unlawful or negligent actions or omissions.(66)

The last two sources give rise to contractual liability, which arises within the scope of a contractual relationship(67), and to non-contractual or tortious liability which arises out of the infringement of the general duty imposed by the law of not harming or injuring anyone with whom there is normally no contractual link.(68)

Although there are certain cases in which the Civil Code provides for strict liability, generally speaking liability is based on fault. Case law however has on occasions reversed the burden of proof.

10.2 The Consumers' protection

10.2.1. Historical background

The Spanish Constitution of 1978, Article 51, requires the public powers to guarantee the defence of the consumers and users protecting through effective procedures their safety, health and legitimate economic interests. The public powers are also required to promote the information and education of the consumers and users, foster their organisations and hear them in any matters affecting them in the terms prescribed by the law.

The Consumers and Users General Protection Act (the Consumers Act) was promulgated on July 19th, 1984 following the colza oil tragedy which took a toll of 475 people dead and thousands injured. This is known in Spain as the "colza" oil case. The oil intended for industrial uses was apparently denaturalised with aniline and sold as cooking oil.

10.2.2. Scope of the Consumers Act

A) From an objective point of view the Consumers Act refers both to defective products and services thus going beyond the Council Directive 85/374/EEC of 25 July 1985 (the Directive) which concerns liability for defective products and the provisions of Law 22/1994, of 6 July on Defective Products Liability (hereinafter DPL Act), which incorporated into Spanish law said Directive. Products and services include a wide range of items, even real estate.

B) From a subjective point of view the Consumers Act has been designed to protect the consumers and users. These are defined as those individuals or companies that purchase, use or enjoy as final recipients movable or immovable property, products, services, activities or functions irrespective of the public, private, individual or collective nature of the producers, providers, suppliers or shippers.(69)

Are not deemed to be consumers and users those not intending to be the final recipients but just to purchase, store, use or consume goods or services in order to incorporate them in processes of production, transformation, commercialisation or delivery to third parties.(70)

C) The scope of potential defendants is wider than the Directive and the DPL Act since the Consumers Act includes not only the producer (who is not defined) but any providers, suppliers or shippers. That is to say the whole chain from production to distribution (including wholesale and retail). Indeed under the Consumers Act any manufacturer importer distributor or supplier of products or services may be in the position to answer to Spanish consumers and users for the origin, identity and suitability of such products and services, always taking into consideration the nature and purpose of those products and the rules for their manufacturing use and distribution.

(64) Royal Decree-Law 1/1992 of April 3, confirmed by Resolution of Parliament of 30th April 1992, effective since April 8th, 1992.
(65) By EEC Regulation 2194/91 of 25th June 1991, issued by the Council of the European Communities (Official Gazette of the European Communities of 29th July 1991), To supplement (and implement) the Regulation, a number of Directives were approved on the residence status. These Directives were transposed into the Spanish law by the Royal Decree 766/1992, of June 26th, published on June 30th, which regulates the entry and stay of EEC citizens in Spain and took effect on July 1st, 1992.
(66) Article 1089, Civil Code.
(67) Article 1101, Civil Code.
(68) Article 1902, Civil Code.
(69) Article 1„.2 of the Consumers Act.
(70) Article 1, paragraphs 2 and 3, of the Consumers Act.

The content of this article is intended to provide a general guide to the subject matter.
Specialist advice should be sought about your specific circumstance.

For further information contact Mr. Jorge Angell, L. C. Rodrigo Abogados, Madrid Spain. Fax: +341 576 6716 or text search 'L.C. Rodrigo Abogados' and 'Business Monitor'.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions