Multinational Employment Spain: Legal Defence Case | BMC

The Challenge

The Spanish subsidiary of an automotive sector multinational had carried out a workforce restructuring affecting 23 employees at its production facility on the outskirts of Barcelona. Eight of the affected workers filed claims before the labour courts, alleging unfair dismissal, unpaid overtime salary differences, and violations of working conditions established in the collective bargaining agreement.

The situation was particularly sensitive for three reasons. First, several claims shared similar factual grounds, meaning that an unfavourable ruling in one case could create a precedent usable by the other claimants. Employment court decisions in Spain do not formally bind other courts, but in practice, a ruling against the employer in a case with shared facts makes the remaining cases significantly harder to defend. Second, the aggregate financial exposure exceeded 1.8 million euros in severance payments, interim wages (salarios de tramitación), and potential surcharges for procedural irregularities. Third, the parent company, which had experienced similar restructurings at plants in Germany and France, required a resolution strategy that would not compromise future restructuring decisions at other European plants where the Spanish precedent might be cited by local unions.

Our Approach

Before preparing a single written defence, we conducted an internal audit of all documentation related to the restructuring: the original business justification report (memoria explicativa), the collective consultation records, the individual dismissal letters, timekeeping records going back three years, and the applicable collective bargaining agreement provisions on overtime, shift scheduling, and working conditions.

Unified defence architecture. We designed a strategy that treated all 8 cases as a single coordinated proceeding, even though they were formally independent files in front of different court sections. A central case file maintained all shared documentary evidence, with a version-controlled cross-reference matrix identifying which documents were relevant to which claims. This allowed us to maintain complete argumentative consistency across all defence briefs and avoid the common error of making statements in one case that could be used against the employer in another.

Case classification by legal position strength. Our internal review identified a clear split. Five cases presented procedural weaknesses in the execution of the dismissals: in three instances, the dismissal letter described the business reason in terms that were legally adequate but left marginal room for challenge; in two others, the required consultation period had been completed but record-keeping gaps created documentation risk. For these five cases, litigation to a final ruling carried a risk-adjusted expected cost higher than a negotiated settlement.

For the remaining three cases, the documentary evidence was strong: the business justification was well-documented, the collective consultation had been properly conducted and minuted, and there were no procedural gaps. These three cases were worth defending to a ruling.

Negotiation strategy for the five conciliation cases. We approached the pre-trial conciliation at the SMAC mediation service with precise economic parameters for each case: the maximum we would offer was calibrated to be below the risk-adjusted cost of an adverse ruling (incorporating the probability of losing, the likely severance award, and the interim wage exposure from the filing date to a hypothetical ruling). Each offer was structured to include a confidentiality clause, a full settlement of all current and future claims arising from the employment relationship, and a neutral reference commitment. The five agreements were reached at an average settlement value of 42% of the claimed amount, well within the parameters set.

Judicial defence for the three strong-position cases. For the remaining three claims, we prepared full defences incorporating economic expert reports quantifying the genuine business need for the restructuring, complete internal documentation of the collective consultation process, and testimony from the production manager and HR director who had led the process. All three cases proceeded to oral hearing and produced rulings fully upholding the employer’s position.

Results

All eight cases were resolved favourably within five months. The five conciliation agreements were reached at amounts significantly below the initial claims, and the three court rulings validated the legality of the dismissals without qualification. Total savings compared to the claimed amounts reached 1.2 million euros, measured against the aggregate claim value of 1.8 million euros.

The confidentiality clauses in the five agreements prevented the terms from being used as a benchmark in subsequent negotiations. The three favourable rulings, once they became final, were circulated to the parent company’s European legal counsel as precedent documentation supporting the legality of the restructuring model used, directly informing the approach taken at subsequent restructurings in Poland and Portugal.