Regarding employees proportionally receiving their extra payments, the Collective Bargaining Agreement applicable to my company includes a prohibition for these extra payments to be received proportionally over the twelve months of the year.

However, there are workers in the company who have always received such payments this way. Can my employees continue receiving these payments proportionally as they have done up to now or must I pay them on the dates stipulated in the Collective Bargaining Agreement? Otherwise what risks could I run?

In practice, companies’ employees very often receive the amount of the extra payments spread over twelve months instead of receiving them on the dates stipulated for such purpose in the applicable Collective Bargaining Agreement. When the Collective Bargaining Agreement in question does not prohibit this practice and there is also an agreement with the worker and/or the workers’ legal representatives that authorises this, such practice does not usually imply any serious problems. However, what happens in cases when the Collective Bargaining Agreement expressly prohibits the employees receiving such extra payments proportionally?

Regarding this issue, in the recent judgement number 452/2022 of 18 May 2022, by Unifying Doctrine, the Labour Chamber of the Supreme Court ruled that employees receiving extra payments proportionally, when accepted and tolerated by the worker with no objections being raised, terminates the obligation to pay them again on the dates specified in the Collective Bargaining Agreement, even if the regulation of the Collective Bargaining Agreement expressly prohibits such practice and whenever the consequences due to infringing such prohibition are not specified.

Background

In the case analysed, during the valid term of the worker’s labour relationship, he had been receiving the amount of the extra payments on a proportional basis, being an accepted practice that he tacitly agreed to. Similarly, it was stated in the claim that the salary received by the worker included the proportional amount of such extra payments, hence the worker implicitly acknowledged such practice.

The Collective Bargaining Agreement in question (The VII State Framework Collective Bargaining Agreement for services to care for dependent persons and to develop the promotion of personal independence) determined that the amount of the two extra payments was payable every six months, the first from 1 June to 31 May, with payment on 15 June, and the second from 1 June to 30 November, with payment on 15 December, expressly stating that under no circumstances could the employees receive such extra payments proportionally on a monthly basis. The Collective Bargaining Agreement did not specify the penalty that would be imposed for infringing this prohibition.

What was the Supreme Court’s ruling?

Up to now, doctrine of the Labour Chamber of the Supreme Court has been sustaining in numerous case law rulings that employees receiving the extra payments proportionally does not release the employer from its obligation to settle them at the time they are payable, in cases when the Collective Bargaining Agreement prohibits such corporate practice (proportional payment), even though the regulation of the Collective Bargaining Agreement does not contain any specific rule that explains the consequences of infringement, unilateral implementation by the employer of such proportional payment not being allowed (vid. The judgement of the Supreme Court of 08/02/2021, Appeal to the Supreme Court (cassation) for Unifying Doctrine 2044/2018, and the judgement of the Supreme Court of 19/01/2022, Appeal to the Supreme Court (cassation) for Unifying Doctrine 479/2019, among other significant ones).

After providing a brief summary of applicable case law doctrine, the Supreme Court concluded that, in the case analysed, the employees receiving the extra payments on a proportional basis meant there was no possibility to claim their payment again on the dates specified in the applicable Collective Bargaining Agreement for the following reasons:

• During the valid term of the labour relationship, there was no record of the worker raising any objection whatsoever to receiving the amount of the extra payments on a proportional basis over the twelve months of the year.
• Even the worker acknowledged in the claim that he received the extra payments proportionally in twelve monthly payments, as an integral part of his salary.
• The applicable Collective Bargaining Agreement did not specify the consequences of infringing the prohibition of employees receiving the extra payments proportionally.

Conclusions

Bearing in mind the context and the circumstances explained above, the Supreme Court concluded that admitting the worker’s claim would imply unfair enrichment, because it would result in double payment of a salary item (in this case, the extra payments), the regularity for payment thereof not having been disputed and had been accepted with no objections being raised by the worker during the valid term of the labour relationship.

Therefore, can my employees continue receiving the extra payments on a proportional basis, even though the Collective Bargaining Agreement prohibits it?

Although the opposite could be interpreted from reading the analysed judgement, it is always advisable to abide by the provisions in the applicable Collective Bargaining Agreement when settling the extra payments in order to avoid running unwanted risks, such as needing to pay them twice.

Similarly, in cases when the Collective Bargaining Agreement does not specify any prohibition whatsoever for the employees to receive the extra payments on a proportional basis, it is always advisable to sign a written agreement with the workers that authorises such practice.

Please do not hesitate to contact me should you have any queries about the way your employees can receive the extra payments in your company, it will probably surprise you to find out that the solutions adopted by our courts are not always applicable in the same way to all cases and the specific features of each case must be analysed in order to find the suitable solution.