Termination of contracts for works and services: possible jurisprudence on resolutive condition?

works and services contract case law

In the coming years, the consequences of the labour reform will not be limited to a drastic reduction in the number of temporary contracts. One of the questions that leads us to ask ourselves is whether other ways of terminating contracts will be opened up, such as a possible termination condition for the completion of work or services.

Following the publication of Royal Decree-Law 32/2021, work and service contracts have an expiry date. Contracts for works or services signed before the entry into force of the Reform are allowed to remain in force for the three years authorised by the previous regulation (or even four, if the collective bargaining agreement established it). Since 30 March 2022, it has not been possible to create new contracts for work and services, which means that it is no longer possible to link a fixed-term contract with a specific task or service.

A possible gateway to resolutive conditions

Until now, the Supreme Court has been careful to keep the door closed to the possible validity of termination conditions attached to a particular job or service.

Without going into an in-depth analysis of the case law in this regard, the Supreme Court has confirmed in several judgments the consolidated doctrine relating to the "principle of prioritisation," which determines the invalidity of any termination condition that introduces a cause for termination already provided for in the Workers' Statute itself. Taken to the specific field of contracts for works and services, this doctrine means that, until now, the termination regime provided for in the Statute could not be altered through the introduction of a termination condition linked to the "expiry of the agreed time or completion of the work or service that is the object of the contract".

This means that with the amendment of Article 15 a resolutory condition linked to the completion of a specific activity would not go against the principle of priority criminality, as long as it does not contradict the doctrine established by the Supreme Court in its judgment of November 2017.

There is no fixed-term arrangement

Following the Reform, there is no fixed-term contract that allows for the uninterrupted hiring of a worker for a period of more than 90 days. It seems obvious that in circumstances such as the one described above, the Spanish subsidiary must formalise an open-ended contract with the posted worker. As we have already mentioned, we believe that it should be perfectly legal to classify the completion of the project for which the employee was posted as a cause for termination.

While critics of this hypothesis might argue that the legislator's intention in abolishing the works and services contract was none other than to ensure continuity of employment, especially in the context of companies whose usual business is to provide services on a contractual basis, so that the termination of a contract at the end of a project, if necessary, would be by objective dismissal (which would mean an increase in compensation from 12 to 20 days' salary per year of service), it is no less certain that "our" displaced employee would resume his previous employment relationship with another company in the group, without any solution of continuity, so it makes no sense for him to benefit from the compensation regime that our legislator has provided to compensate those who irreversibly lose their jobs.

On the other hand, we must not overlook the risk involved in the incorporation of a clause of these characteristics with respect to the prohibition introduced by Article 1256 of the Civil Code. It is essential that the resolutory condition is not arbitrary and leaves compliance with it in the hands of the employer, under penalty of nullity, since the binding nature of the agreement would be lost if compliance with the condition depends exclusively on the will of one of the parties.

In this sense, faced with a situation of employment that is necessarily of a fixed-term nature due to the very nature of the project being carried out, and at the end of which a previous employment relationship would be resumed (or even a new one would be started), which would mean that the cause for compensation for termination of the contract would disappear, the new horizon of the Reform should allow this type of work and service to be channelled through the mechanism of Article 49.1.b).

Source: elderecho.com

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