Spain: Criminal law penalties for employment law breaches

Various articles defining offenses committed in the field of employment have traditionally been included in the Criminal Code. In the face of certain particularly serious infringements of employment rights, an attribution of criminal liability was brought into play, in an attempt to protect those rights, using the government’s most forceful means of coercion. This does not mean that criminal penalties have not been, and should not continue to be, the last resort for achieving co-active fulfillment of the law’s requirements. This point is actually made in the preamble to the recent Organic Law 14/2022 of December 22, 2022.

Criminal rules stand as the government’s last line of defense for constitutional and social laws, and the valid existence of citizens’ rights. The compelling effect of criminal rules is undeniable: a criminal penalty is much more punishing than administrative penalties and may cause offenders to be deprived of their freedom. For that reason, it needs to be thought out carefully which types of conduct are penalized and to what extent or how strongly. The Criminal Code has several rules, as we have mentioned, that contemplate offenses related to a breach of employment rights and do so under the last resort principle which must underlie any implementation of criminal measures. We are not going to discuss these rules, which are already sufficiently well-established in the Spanish legal system. Instead we are going to look at the latest reform, introduced by Law 14/2022 mentioned above, which has been approved without the necessary debate and reflection process. And it has a concerning bias towards using criminal penalties (in a way that conflicts with their nature as a last resort which is how they are described in the preamble) as a tool for contending with an administrative issue that the authorities cannot see how to shift.

Analyzing the new article 311.2 of the Criminal Code, it seems as if the labor authorities, confronted with an interpretation or compliance conflict (we shall not give our view on this) with a few citizens have come to the end of their tether, and said, although not in so many words, “now you’ll see”. But neither the authorities can come to the end of their tether nor can they act hastily, using extreme penalties, taken from criminal law, to quell an attitude, at least a confrontational one, of a few citizens. We must stress, without giving our view on the facts of the question, that any irritation the authorities may feel by not managing to quieten citizens’ claims and interpretations cannot justify a monumental decision of this type to define a new criminal act in the Criminal Code. The necessary debate and the necessary calm reflection process is missing. An amendment to the Criminal Code cannot be the sword of Alexander with which to untie the Gordian knot facing the authorities.

Yet this is most likely to be what has happened. The amendment adding a point 2 to article 311 of the Criminal Code in force, has engendered a rule creating vast legal uncertainty and incurring glaring technical defects, relating to the definition of infringing conduct. Especially, the definition of the infringement: it is considered that the offense is incurred by “those who impose illegal terms and conditions on their workers by hiring them under mechanisms other than an employment contract”. Take note of the wording: “illegal terms and conditions by hiring them under mechanisms other than an employment contract”. From the way it is expressed, hiring using or under mechanisms other than an employment contract appears to determine, of and in itself, an imposition of illegal terms and conditions. Obviously this cannot be so. It would be if an employment contract were the only allowed option for hiring a person to provide services. But there are other legal instruments for hiring an individual to provide services, which do not fit the employment contract molds. Freedom of contract allows those other types of contractual relationships. The law is allowed to set out a preference for the use of an employment contract, or even, as appears in the Workers’ Statute, a presumption in its favor, but those other contract options will continue to exist. Freedom of contract, though severely restricted by Spanish employment law, has not disappeared. Therefore, the option of “hiring them under mechanisms other than an employment contract” is strictly allowed by the law to be considered and implemented.

Apart from this, the legal mechanism contains a fallacy in its reasoning: it refers to those who impose illegal terms and conditions on their workers. It disregards that the matter in question may well be the individual's classification as a worker, because working under an employment contract is not the only possible form of providing services. If the individuals concerned are denied worker status, then that point will have to be resolved before deciding whether illegal terms and conditions have been imposed. Furthermore, if the “illegal terms and conditions” are imposed in other ways, would there not be an offense? Would this question have to be redirected to article 311.1 of the Criminal Code, which is worded very differently? (it requires the existence of deception or abuse of a situation of necessity, and refers to working conditions that “harm, suppress or constrain” recognized rights). And what if it is pleaded that the terms and conditions are not illegal, just different to the ones set out in the law, or even that they may be more favorable for the interested parties? As you can see, there is a bed of interpretations, creating legal uncertainty.

But by far the most concerning feature of the law is the reference to those purported illegal terms and conditions being “retained in disregard of an administrative request or penalty”. The request part can only be puzzling. It has to be taken into account that labor inspectors and labor authorities continue to argue that requests are not subject to appeal, even though in reality they are appealed and there are court decisions in this respect. The legal rules on requests would have to be rebuilt, to provide ways to appeal against them and the consequences of their becoming final. It is inconceivable in a country governed by rule of law to even consider that when faced with a non-appealable request, failure to fulfill that request should determine a criminal penalty. An administrative penalty, on the other hand, although this is not specifically stated, has to be final and even so careful consideration would have to be given to its compatibility with criminal measures against continuing breaches, when administrative law has specific provisions for those types of events.

The law, even if purely from the standpoint of its technical defects, could not fail to be considered and as a result held unconstitutional, so as to restore legal certainty in the field of employment relationships.