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Absence of the value of the severance payment with respect to the company when it is only signed by the worker: Regarding the High Court judgement of January 30th 2019

| Publications | Employment Law and Social Security

The Social Chamber of the Supreme Court issued on January 30, 2019, by virtue of which it is concluded that the settlement only releases the undersigned and for the concepts it includes. This does not preclude the company from claiming lawfulness and later wrongly overpaid to its employees and that, therefore, only obliges the employee

With the intention of taking a break after a month of March that is legislatively intense in employment matters, the following is a recent and novel sentence issued by the Social Chamber of the Supreme Court on January 30, 2019, by virtue of which it is concluded that the settlement only releases the person who subscribes to it and for the concepts it includes. That is, it is validated that the signature of a document of balance and settlement that is signed exclusively by the worker and despite the fact that the document was prepared by the company and sealed by it, does not prevent the company from claiming lawfulness and later what was paid erroneously in excess to its employees and that, therefore, only obliges the employee.

What came to be an exceptional case years ago is now becoming a sound and wise recurring decision. We refer to those appeals filed before the Social Chamber of the Supreme Court in which, due to the characteristics of the legal issue raised and its transcendence, the matter is agreed to be debated by the Plenary of the Chamber (currently with 13 Magistrates).

This is what has happened with the High Court Decision issued on 30 January 2019 (Fundación Teatro Real; RCUD 4196/2016) that by a majority of its magistrates (9 against 4 who gave a private vote), establishes the jurisprudential doctrine that when a document of balance and settlement is signed exclusively by the worker and despite the fact that the document was drawn up by the company and stamped by it, this does not begin to prevent the company from legitimately claiming the excess wrongly paid to its employees and that, therefore, only obliges the employee to pay the excess.

In the case in question, both the Social Court 16 of Madrid and the Supreme Court of Justice declared that the company had no action in respect of the credit claimed (€ 1,068.15 for salaries paid in excess), as no exception had been made in the settlement. In effect, it was stated that when the settlement document was signed (22-5-2014), the claim for the amount had already been filed by the company (12-11-2013) and knowing both parties that there was a claim did not make any reservation in the settlement, so it should have full legal value for the worker and for the company.

However, the Supreme Court reached a different solution, stressing that:

a.- In the signed settlement, it is not the company that carries out any manifestation tending to be given for the settlement of any credit it may hold;

b.- On the contrary, the settlement only contains a declaration of the worker's will, as only the worker declares his cessation in the company and considers his claims against it satisfied and;

c.- The mere fact that the settlement was drawn up by the company, and that the company did not then disclose the existence of outstanding claims against the employee, does not mean a waiver of the disputed claim for the high court.

In short, the Supreme Court understands that to the extent that it would have been completely irregular that the company had conditioned the liquidation to the eventuality of the outcome of the pending claim, especially as the claim is subject to legal proceedings, cannot be understood as a waiver of credit, or as a waiver of the action in the absence of a clear and unequivocal will of the company to satisfy its credit.

With the estimation of the appeal for the unification of the doctrine formalized by the company against the STSJ that declared its lack of action (for the liberating value of the settlement for both parties), having been unjudged the issue of substance, the return of the proceedings is decreed so that the Social Court dictates sentence on the fund, that is, if it is appropriate that the employee returns the salary amount paid in excess or not.

As we have previously pointed out, the ruling is not unanimous since it has the Private Vote of four magistrates who are inclined towards the thesis that insofar as the document of "liquidation and settlement" was drafted by the company, which put its stamp by signature and omitted to make any reference to the existing lawsuit on undue payment of salaries, it should be understood that all salary debts derived from the contract, both those of the worker and those of the employer, were liquidated and settled.

It was underlined that the omission of the reserve of shares to claim the collection of the excess payment was only attributable to the company and that the company had two options: to make a compensation of debts or to reserve its right to claim the credit. This had led to an error in his employee's understanding that with the signing of this document before the trial all salary debts were settled. They maintain that it was of easy resolution because it is a document that the company drafts and that says that it liquidates and terminates the contract, expression that seems to refer to all the credits in favour and against the parts that are not excluded by who makes the settlement.

As a finale, the jurisprudential doctrine analysed feels that the settlement only releases the undersigned and only for the concepts it includes. More in the commonality of good business practice, it is difficult for a company to draw up and make a document of balance and settlement available to a worker with a net amount to be received when it has a claim against it by being able to make the appropriate and prior compensation of debts.

 

For your information, you can download in PDF the judgement mentioned here

 

For more information, please contact:

 

Alfredo Aspra

alfredo.aspra@AndersenTaxLegal.es

José Antonio Sanfulgencio

jose.sanfulgencio@AndersenTaxLegal.es

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