According to the judgment of the Constitutional Court of 12 July 2021 (writ of amparo 5508-2018) an individual employee may challenge the business reasons for a collective dismissal, a situation that until now was not previously considered, when there is an agreement within the consultation period.

In this particular case, a group of employees were affected by a collective dismissal procedure which finalised with a settlement agreement between the workers' representatives and the company. However, a few workers challenged the grounds of the collective dismissal.

The case law of the Supreme Court excluded the possibility of reviewing the concurrence of the causes that justify a collective dismissal in cases where an agreement exists between the company and the employees' representatives through an individual dismissal procedure. This is due to the lack of regulation in this issue.

On the other hand, the Constitutional Court conducted an in-depth analysis of the right to effective judicial protection, and determined that the decision adopted by the Supreme Court failed to conform to the postulates established in their doctrine, as it leads to restricting the possibilities of exercising the particular fundamental right, without the express legal cause that authorises it.

The Constitutional Court subscribes to the view that the lack of legal regulation creates this path for the possibility of challenging the concurrence of the causes that motivated the collective dismissal, but it should not be understood as an impeditive circumstance of such eventuality. The Court granted the appeal in favor of the plaintiffs and declared the previous judgments null and void.

Key Action Points for Human Resources and In-house Counsel

Companies must find alternative ways to bind each employee individually to the final agreement, in order to reduce the individual's possibilities to appeal; for example, procuring approval of the final dismissal agreement through ratification by the employee assembly.

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