How should a company handle a labour inspection in Spain?

The idea that you could be faced with a labour inspection always causes some concern and can even become a real headache. In fact, labour inspections are often just routine processes that should not imply a serious problem if they are suitably handled.

Labour Inspections are procedures that were created by a Regulation in 1906. It is currently regulated by Act 23 of 21 July 2015 on the Labour and Social Security Inspection Department. As a public service, its object is to monitor and supervise compliance with the labour and social security regulations in Spain and is structured as a public service harmonising labour relations. The law also vests the Labour Inspection Department with technical assistance, mediation, conciliation and arbitration duties.

What is a labour inspection?

If you have never been faced with a labour inspection, you could well ask this question. It is a special administrative procedure carried out by Labour and Social Security Inspectors or else by Labour Sub-Inspectors for issues that the law has granted them competence.

In the inspection it is checked that the company under investigation is complying with labour legislation and the possible liabilities are claimed. The inspections can be of a routine nature, due to a report, or else they can be part of specific inspection campaigns. There is a presumption of certainty about the facts recorded by the acting officials and the areas subject to an inspection are the labour relations system, prevention of occupational hazards, the social security system, employment, migration and cooperatives.

What can the inspectors ask for?

In order to successfully pass an inspection, you must obviously comply with all your legal obligations, but the first step towards success will be to ensure that all the documents you must submit are well organised. The inspectors can request a wide range of documents and information and among the most common are the following:

1. Employment contracts: In order to check they are in accordance with the regulations in force and to avoid fraudulent use of temporary contracts.
2.  Payslips: To check the salary structure is in accordance with the applicable collective bargaining agreement and whether the salaries are paid for the right amounts and at correct times.
3.  Social security: The inspector checks registrations and contributions in order to avoid fraudulent conduct.
4.  Working hours: They check compliance with the obligations related to working hours, from both a formal and material standpoint, specifically verifying the records of daily working hours, overtime, night shifts, other shifts and compliance with the rest period system.
5.  Prevention of occupational hazards: It is checked that the obligations related to prevention of occupational hazards are fulfilled.
6.  Equality and LGTBI plans: When appropriate, it is checked there are equality and LGTBI plans and their contents.

Who conducts the inspections and the terms for the procedures?

As we have already mentioned, the inspections are mainly conducted by Labour and Social Security Inspectors, who are specialised officials that act as public authorities and are authorised to freely enter any work centre at any time, with no prior notice, and to remain in them.

The inspections must be scheduled, unless needs arise or reports are made. However, we should bear in mind that an inspection of a work centre does not require any prior notice. An order for appearance may also be requested or a direct administrative case may be filed, providing the information has been previously checked.

The time that an inspection can last varies depending on different factors such as the complexity and volume of the required documents and information. The inspection procedures can last for a maximum of nine months, a term that can be extended for a further nine months in certain cases and they cannot be suspended for more than five months. Moreover, the maximum term to adopt a decision on sanctioning cases due to infringement of the labour system is six months.

What should I prepare in order to be ready for an inspection?

It is crucial that all the company’s documents are up to date and available. The information must be submitted clearly, in an organised manner and preferably on a digital device. Some recommendations in this respect are as follows: Keep your files up to date: Keep the labour and social security documents up to date; Digitalise documents: Make digital copies of all the documents; Train your staff: Those responsible for human resources and other key employees must be able to respond to the requests made by the inspectors.

When can a company be sanctioned? 

There are different reasons why companies can be sanctioned for breaching the labour regulations; the most common reasons are specified below:

1. Irregular contracts: Employing workers without contacts, fraudulent temporary contracts or failing to register employees in the social security system.
2. Social security: Lower contribution by paying lower salaries than those specified in the collective bargaining agreement, not paying or contributing for overtime or payments not included in the pay slip.
3. Lack of safety measures: Not sufficiently implementing the measures for prevention of occupational hazards.
4. Time records - Overtime: Lack of suitable control of the working hours records and overtime worked.
5. Discrimination: Breach of the regulations governing labour equality and discrimination

Once the inspection has ended, a sanctioning procedure may be filed in various ways, depending on the kind and seriousness of the infringement detected:

1. Infringement certificate: If the inspector detects an infringement, he/she will issue an infringement certificate that will list the irregularities detected.
2.  Infringement certificate due to obstruction: If you fail to collaborate, you will be charged with an infringement due to obstruction.
3.  Term for remedy: In some cases, a term may be granted to the company so that it can remedy its irregularities before issuing the certificate.
4. Administrative sanction: If the irregularities are not remedied or they are serious, an economic sanction and ancillary sanctions may be imposed. 

5. Appeals and pleadings: The company is entitled to submit pleadings and lodge an appeal through administrative and judicial channels.

    

Therefore, it is of crucial importance to be suitably prepared for a labour inspection. Strictly managing your labour obligations, documents and processes, implementing good corporate practices and guaranteeing ongoing training on labour issues will enable you to 
minimise the risks and avoid possible sanctions. Please do not hesitate to contact us should you need advice on this matter.

Autor: Miguel Capel, socio de Derecho Laboral en RSM