ERE in Retail Spain: 420 Dismissed, Zero Lawsuits | BMC

Client context

A retail distribution chain operating 180 stores across Spain had built its position over two decades as a mid-market specialist in a segment undergoing structural transformation. The shift in consumer behaviour toward online purchasing, combined with sustained increases in shopping centre rental costs and wage pressure from sector-wide collective agreements, had eroded margins to the point where a significant portion of the store network was generating losses that could no longer be offset by the profitable stores.

The management team had conducted an eighteen-month operational review and concluded that closing 35 underperforming locations was the only viable path to restoring financial sustainability. The decision triggered the mandatory ERE process under Spanish labour law for the 420 employees working in the affected stores.

Challenge

The context was particularly sensitive. The company had three active trade union sections — CCOO, UGT, and an independent sector-specific union — with historically adversarial positions toward management. Prior restructuring discussions over the previous decade had left a residue of institutional mistrust that both sides acknowledged. Several of the affected stores were located in municipalities where the company was one of the main local employers, adding a political dimension to what was already a commercially and legally charged process.

Any breakdown in negotiation risked triggering strikes across the wider store network — not just the affected locations — negative media coverage in a sector already under public scrutiny, and a wave of individual and collective lawsuits that could jeopardise the entire restructuring plan and generate costs far exceeding the targeted savings. At the same time, the business plan required stores to be closed and costs eliminated within the fiscal year, meaning the 90-day statutory maximum for the consultation period was not a soft deadline.

BMC approach

BMC assumed legal and strategic leadership of the process from the ERE design phase, preceding the formal opening of the consultation period. The first step was a comprehensive workforce analysis covering seniority profiles, job categories, employees with special legal protections — including pregnancies, recognised disabilities, union representatives, and recently promoted employees — and financial modelling of alternative severance scenarios with their total cost impact.

The negotiating strategy was built around three structural pillars. The first was economic transparency. We presented trade union representatives with disaggregated profit and loss accounts by individual store covering three full fiscal years, together with the forward projections underpinning the restructuring decision. This level of financial disclosure is unusual in Spanish ERE negotiations and initially met with scepticism, but it had the intended effect: it removed the political dimension from the economic discussion and forced the negotiation onto the terrain of facts rather than rhetoric.

The second pillar was segmented negotiation. We separated economic terms — severance amount and payment schedule — from social measures, including the outplacement programme, retraining commitments, and future re-employment priority rights. Each block was negotiated at its own pace and with its appropriate stakeholders, preventing trade-offs between unrelated issues that typically stall ERE negotiations when everything is bundled into a single package.

The third pillar was proactive mediation. Rather than waiting for negotiations to break down before involving the SMAC (Servicio de Mediacion, Arbitraje y Conciliacion), we proactively requested its intervention in week four — while positions were still bridgeable. The mediator was briefed in advance on the key gaps and the parties’ underlying interests, enabling a structured session that produced the framework for agreement within two days.

Alongside the legal process, BMC designed the outplacement programme: job orientation workshops delivered by sector specialists, access to a curated employment exchange focused on retail and logistics roles, and individual placement support for long-tenured employees whose skills were most concentrated in the retail environment.

Results

Agreement with all three trade unions was signed on day 45 of the consultation period — exactly half the 90-day statutory maximum. The agreed average severance was 28 days per year of service, compared to the 33 days demanded at the opening of negotiations, representing an approximate saving of €1.5 million against the initial scenario. Employees with seniority exceeding fifteen years received enhanced packages under a confidential side agreement that acknowledged their specific situation without setting a precedent for the general population.

The outplacement programme achieved a 67% reemployment rate within six months of store closures — a result that exceeded the commitment made during negotiations and was later cited by union representatives as a factor in the quality of the overall process.

Not one of the 420 affected employees filed an individual or collective lawsuit against the company after the ERE. The restructuring was executed on schedule, store closures were completed within the fiscal year, and the company returned to operational profitability in the following fiscal year.

Key takeaways

ERE negotiations in Spain are often approached as adversarial processes to be managed defensively. The most effective frame is different: they are information-exchange processes in which the quality and credibility of the business case largely determines the final outcome. Unions that understand and accept the business necessity are negotiating over terms, not contesting legitimacy — which is a fundamentally different and more productive dynamic. The investment in financial transparency at the outset of this process, combined with the decision to seek mediation proactively rather than reactively, compressed a 90-day statutory maximum into a 45-day agreement. For companies facing restructuring, the lesson is that speed and quality of outcome are positively correlated when the process is designed correctly from the beginning.