The concept of labour subrogation and its application in business environments
Subrogation of employment or Labour subrogation is a way out of possible changes in the workforce. This legal process facilitates rotation at all levels of the company and saves time and resources, however, it is necessary to know this process in depth in order to take advantage of all the possibilities offered by labour subrogation.
In the following, we will evaluate the concept of labour subrogation and its implications.
What is labour subrogation?
Labour subrogation is a legal process in which there is a change of employer, but the employment and contractual conditions of the workers are maintained. This change usually occurs when a company transfers its activity, or a part of it, to another company, and the affected workers are subrogated to the new entity.
In labour subrogation, workers retain their rights and seniority, as the new employer assumes the obligations of the previous employment contract. This mechanism is common in sectors such as cleaning, security and transport, and is regulated to make business management or outsourcing of services more flexible.
How a labour subrogation process is carried out
Labour subrogation is a process in which the workers of one company become employees of another, maintaining their rights and working conditions. This process is common when there is a change of concession, outsourcing or sale of a part of the company. Below, we explain step by step how a labour subrogation process is carried out.
Step by step of surrogacy
- Identifying the situation: The first step is to identify whether the situation is one that allows for labour subrogation. This may occur in cases of company succession, concession changes, outsourcing of services or mergers and acquisitions.
- Notification of employees: The original employer must notify employees of the subrogation situation. This includes informing them about the change of employer and how it will affect their employment conditions.
- Inter-company agreement: The incoming and outgoing company must agree on the terms of the subrogation, ensuring that employees’ contracts and rights are respected.
- Transfer of information: The outgoing company should transfer all relevant information about employees to the incoming company, such as contracts, payroll, and benefits. This ensures that workers continue with the same working conditions.
- Formalising the changeover: The incoming company formally takes over the workers. This involves formalising the new employment contracts or, if the agreement allows, simply maintaining the previous ones, respecting seniority and conditions.
- Notification to management: The subrogation must be communicated to the labour authority and the Social Security, so that the records are correctly updated.
Practical example of labour subrogation
Suppose a city council decides to change the cleaning company. The new company has won the tender to manage the service, which was previously provided by another company. In this case, labour subrogation applies because it is a change of service concession.
- Identification: A change of concession is a typical case of subrogation, as the service and associated workers are transferred to the new company.
- Notification: The first company informs its employees that another company will take over the service and that their jobs will be subrogated.
- Agreement: The two companies agree on the terms of the subrogation, ensuring that the employees will maintain their working conditions.
- Transfer of information: The first company transfers all relevant information to the new concessionaire, including contracts and payment details.
- Formalisation: Employees continue their jobs, now under the conditions of subrogation, with the same contracts and benefits.
- Notification: The labour authorities and social security are notified of the change of employer.
It is important to note that labour subrogation is not only available in the public sector, it is also possible in purely private cases.
Legally notifying an employment subrogation
In Spain, the notification of a case of labour subrogation involves informing both the workers concerned and the competent authorities.
The company transferring the business must notify the employees in writing, stating that their contract will be transferred to the new company. This notification must include information on the date of transfer and the name of the new employer. This communication can be made through the legal representatives of the employees, or directly to the employees.
It is important that both the transferor and the transferee companies communicate the subrogation to the Social Security. This is done through the RED System, where the details of the new company are reported and the continuity of contributions is guaranteed.
Finally, the competent labour authority must be informed, generally through a notification to the corresponding Ministry of Employment, so that the transfer is recorded.
At Asesoría Orihuela Costa we have the best legal team at your disposal, so that you can resolve any case that affects your company in accordance with current legislation, always protecting your interests.
