• Parliament, with votes against from PP, Vox, and Junts, has rejected a proposal by Sumar to ban dismissals in companies that relocate their production to other countries. It also aimed to force them to return public aid

• The Congress of Deputies rejected last Tuesday the bill promoted by Sumar to ban collective dismissals of employees in companies that relocate their activity outside the European Union or the European Economic Area. The initiative was voted down with 178 votes against, 168 in favor, and one abstention, following the rejection by PP, Vox, and Junts, while Coalición Canaria abstained

The proposal sought to safeguard employment in offshoring processes, preventing companies from executing collective dismissals linked to relocating their activity outside the community environment. Furthermore, it included the return of public aid received in the previous four years and reinforced the role of trade unions in the processes of sale or transfer of production units.

The result of the vote leaves an initiative that had caused division among groups without any parliamentary progress and which, although it had the backing of PSOE, PNV, EH Bildu, ERC, BNG, and Podemos, failed to overcome the rejection of the majority of the chamber.

THEY CONSIDER PENALTIES ON COMPANIES RELOCATING PRODUCTION ABROAD “DISPROPORTIONATE”

The groups that voted against agreed on criticizing the interventionist nature of the regulation and its potential impact on business activity. The Partido Popular labeled the proposal as “disproportionate,” understanding that it introduces excessive interference in the organizational capacity of companies.

During the debate, the populars warned that the initiative imposed new bureaucratic burdens and limitations that could discourage investment. In their view, reforms of this magnitude should be addressed within the framework of social dialogue, involving companies and unions, rather than through unilateral initiatives in Parliament.

Along similar lines, Vox especially questioned the obligation to return public aid, considering it a “very broad” measure that could penalize legitimate business decisions. They also criticized that the rule focused solely on relocations outside the EU, leaving out other scenarios.

For its part, Junts warned that the proposal tightened the labor framework to the point of making it more rigid. According to their assessment, under the argument of protecting the worker, a regulatory environment was being shaped that could hinder business competitiveness and, ultimately, affect employment.

Faced with these criticisms, Sumar defended that the initiative responded to the need to protect the industrial fabric and avoid job destruction resulting from relocation. Following the vote, its spokesperson slammed “the right-wing parties” for voting against a measure that, in their view, aimed to respond to the “real Spain” of the workers.

WHAT PENALTIES DOES THE LAW PROPOSE FOR COMPANIES THAT RELOCATE?

The bill started from the premise that business relocations generate disinvestment, closures of production centers, and job loss. To tackle this phenomenon, Sumar proposed a reform of the Workers’ Statute with several major measures.

The main one was the ban on executing collective dismissals or contractual terminations due to objective causes when the company relocated its activity outside the European Union or the European Economic Area. In other words, a company could not justify a collective layoff (ERE) in Spain if it simultaneously offshored its production to third countries.

Additionally, the regulation planned to prevent other labor measures linked to these processes, such as substantial modifications of working conditions or non-application of collective bargaining agreements associated with the relocation of the activity.

RETURN OF PUBLIC AID BY COMPANIES RELOCATING THEIR CENTERS

Another pillar of the initiative was the return of public aid. Companies that had received benefits linked to temporary employment regulation files (ERTE) or the RED Mechanism in the previous four years would be forced to reimburse them if they decided to relocate outside the EU.

This point generated particular controversy, as it directly affected businesses that had received public support in crisis contexts and subsequently opted to reorganize their production internationally.

The proposal also included transparency measures in the processes of selling or transferring companies. Specifically, it forced detailed information to be provided to the workforce and guaranteed the participation of unions in negotiations between buyer and seller.

According to Sumar, this set of measures aimed to reinforce “democracy within the company” and protect workers’ rights in situations of business crisis or restructuring.

The debate over the initiative was marked by specific examples of industrial relocation, such as that of the Sekurit plant in Avilés or the processes experienced in the textile industry. For its defenders, these cases evidence the need for greater public control over business decisions affecting employment.

THE MEASURE IS RULED OUT, FOR THE TIME BEING

However, for its detractors, the law posed a risk of over-regulation that could have counterproductive effects, such as a flight of investment or a loss of competitiveness.

With the rejection from Congress, the proposal is definitively discarded in its current form. Nevertheless, the debate on how to face relocations – and to what extent business decisions should be conditioned when public aid is involved – will remain present on the economic and political agenda.

Source: AyE