How is collective redundancy affected by the redeployment of workers in companies of the same group?

The redeployment of employees in other companies of the corporate group is a common practice used by companies to restructure their workforces and often to avoid direct redundancies. However, this solution may raise important doubts, especially with regard to the calculation of collective redundancies.

The recent judgment no. 412/2024 of 14 May 2024 of the Audiencia Nacional, in a key ruling, has declared that the redeployment of workers in other companies of the group must be taken into account for the purposes of collective redundancies. This ruling follows the criterion of the Court of Justice of the European Union (CJEU), which advocates a broad interpretation of the concept of collective redundancies, taking into account the actual situation of the workers affected by the company’s measures.

In this regard, the National Court has emphasised that, in order to assess the existence of a collective redundancy, it is essential to take into account the workers who have been relocated, since their terminations also form part of the calculation necessary to determine whether the threshold defining a collective redundancy has been reached. Moreover, in accordance with articles 1 and 51.1 of the Workers’ Statute and article 8.1 of RD 1483/2012, these internal relocations must be discussed from the beginning of the consultation period as part of the group potentially affected by the collective redundancy.

Therefore, redeployment of workers made prior to the start of a consultation period for collective redundancies must be taken into account.

Which terminations are to be counted in a collective redundancy?

In view of the above, this issue is coupled with other situations that should be considered as eligible terminations in a collective redundancy, including:

• Individual objective dismissals, whether fair or unfair (art. 52 c) of the Workers’ Statute).
• Dismissals declared unfair by final judgement or recognised in settlement agreements.
• Termination of contract for failure to pass the probationary period when the probationary period exceeds the maximum legal period.
• Terminations due to substantial modification of working conditions or for not reintegrating the worker in his/her previous conditions (art. 50.1.c of the Workers’ Statute).

Implications for companies of redeployment of workers within the same corporate group in collective redundancies

The National Court’s ruling has a clear impact: although redeployment may seem an attractive solution to maintain employment, even while preserving the same rights for workers (seniority, salary, etc.), it entails terminations that are computable for the purposes of collective redundancy.

In this sense, it is essential that companies bear this situation in mind, and that it is taken into account in the calculation when assessing whether collective redundancies can be carried out, or, if they are going to proceed with collective redundancies, that they take into account that the workers they intend to redeploy within the company group must be part of the debate in the consultation period, including them from the beginning in the negotiations.

Conclusion

Redeployment, although valid and in many cases advisable, must be properly managed to avoid it being considered part of a collective redundancy, which would trigger the obligation to follow its formal procedure. Companies should be aware that transferring employees to other entities of the group may have legal consequences if the relevant requirements are not respected.

In short, this judicial pronouncement underlines the need to carefully analyse each relocation in the context of company restructuring, in order to avoid legal surprises that could lead to the nullity of the terminations and the obligation to reinstate the workers.

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