When a company is transferred or a business succession is carried out, the job surrogacyoccurs, or what is the same, a change of the company that has contracted the workers, who happen to have a new employer.
Whether you’re transferring your company or acquiring a new one, this post interests you, as we’re going to tell you what an employee’s employment contract surrogacy entails.
What is an employee’s employment contract surrogacy?
As we have already mentioned, the surrogacy of an employee’s employment contract consists of the change of workers’employer, because the employer or company that has hired the worker has changed, and the fulfillment of the conditions of the contracts is transferred to the new company.
Labour surrogacy is laid down in Article 44 of the Workers’Statute, so it is a fully valid figure that can occur by different factors, as we will see below.
What does the surrogacy of the employment contract entail?
Surrogacy implies that a change in a worker’s employer occurs, but the same working conditions of the initial contract are maintained. This must be signed by contract between the three parties (former employer, new employer and worker), in order for the surrogacy to be recorded.
In addition, labour surrogacy does not imply the settlement of the previous contract. This means that the worker will not receive any compensation, as the employment relationship will not be interrupted at any time.
If the employment decision were to take place at a later date, it would be the last undertaking to pay the corresponding compensation,maintaining all contractual conditions of salary, category, seniority, etc.
Finally, make it clear that surrogacy does not constitute a newcontract, which means that if you wanted to change working conditions and workers disagree, you would be entitled to report.
Causes of labour surrogacy
Article 44 of the Workers’ Statute provides for the three possible causes of labour surrogacy:
- Business succession :where there is a purchase, absorption or change of the commercial name of an undertaking. In short, when one company replaces another.
- Completion of a service contract:when a company terminates a contract to provide a labor-based service.
- Administrative terms : this may indicate the obligation to hire several workers,but it is debatable whether an administrative specification may require the recruitment of workers if there is no business succession or is not mandatory by collective agreement.
What are your company’s obligations to surrogate an employee’s employment contract?
If you have absorbed a company, you must comply with obligations to a job surrogacy:
- You must inform all workers in the company about the written labour surrogacy.
- You must send a copy of the letter to the State Public Employment Service (SEPE), which must be signed by both the company and the workers.
- As a new company, you get the work and social security responsibilities that the previous company had.
- If there is a collective agreement, your company must comply with all clauses affecting the subrogated workers. This obligation shall be temporary, and shall end when the contract expires or a new collective agreement enters into force.
- In the event of debts from the outgoing company, you will be responsible for such debts.
- You can modify the working day or salary whenever there are reasons to justify it, which can be economic, organizational, technical or production. In any case, it is always necessary to comply with the provisions of the Collective Convention and Article 41 of the Workers’ Statute.
Consequences of not complying with labour surrogacy
If you absorb a company and don’t comply with the job surrogacy, you are exposed to being sued by workers,at the risk of being claimed an unfair dismissal, as workers could claim that the employment relationship should have been maintained with the new company since its contract was in force before the succession.
Here we must emphasize that workers will have 20 working days to challenge the measures implemented by your company. If no action has been taken after this time, the deadline for challenging will have ended.
In short, the surrogacy of the employment contract occurs when a business succession occurs and the employer of the workers of an undertaking changes. When this happens, the new company must maintain the working conditions of the workers, in addition to acquiring all the responsibilities and possible debts of the previous company.
If you are buying a new company and have questions about job surrogacy, do not hesitate to contact the team of job advisors of AYCE Laborytax without any commitment.