Spain: Royal Decree of Law on measures promoting active ageing

A Royal Decree Law approved on 15 March 2013, and entering into force on 1 April 2013, amends certain provisions of Law 27/2011, having regard to updating, adjustment and modernisation of the Spanish social security system and aims to discourage age discrimination from being employed in staff downsizing decisions.

The reform relates to the contributions payable by companies or groups of companies that employ in excess of 100 employees, when those companies perform mass redundancies affecting employees 50+ years of age, in circumstances where the company/group has made a profit in the previous two financial years.

Employers who satisfy the above requirements and who use discriminatory criteria when selecting the employees to be affected by a mass redundancy will be required to make a contribution to the Spanish Treasury.

Discriminatory criteria will be deemed to have been employed where the percentage of workers aged 50+ years affected by a mass redundancy is higher than the percentage of workers aged 50- years on the company’s staff.

Furthermore, with effect from 1 April 2013 the age at which employees will be able to:

• voluntarily retire will be increased from 63 to 65 years; and
• retire non-voluntarily will be increased from 61 to 63  years of age,

by way of a sliding scale until 2027.

The Royal Decree Law facilitates the possibility of employees staying longer in the labour market and aligns employees expected working life with European trends and other Member State legislations.

Action for employers

Employers should have regard to the Royal Decree Law when implementing mass redundancies.

Article written by Carmen Martinez, Senior Associate.