The Supreme Court in Madrid has ruled that new taxes – imposed by Jose Luis Zapatero’s PSOE government in 2010 for individuals undertaking Court proceedings – do not apply to workers pursuing court action relating to employment matters.
Confusion had arisen because, under the existing legislation relating to free legal aid (Ley de Asistencia Jurídica Gratuita de 1996) the right to free legal representation in matters relating to their employment was extended to workers and anyone else who benefited under the Social Security system i.e. who had paid their Social Security contributions, regardless of their income.
The new legislation, Ley de Tasas (Ley 10/2010), while imposing taxes for many court proceedings, proclaimed that anyone who had previously had the right to free legal representation recognised under law, would be exempted from having to pay the new taxes.
However, this was inconsistent with the additional provision in the new law that workers were liable for 40% of the costs of any action that they would take relating to employment matters such as unfair dismissal, failure to pay salaries or legal action to oppose Redundancy Plans (ERE’s).
According to the highest Court in Spain, in the ruling made on the 5th of June, this construction of the law would make vulnerable the system of free legal aid. The members of the Court were agreed that this was also an implication of the amendment made to the law in February of 2013 (Real Decreto Ley 3/2013).
Not Only Workers Benefit
In addition to workers and beneficiaries of the Social Security system, the Court also decided that exemption from a requirement to pay the taxes should be extended to Workers’ Unions and civil servant ‘funcionarios’ . In fact the exemption applied not only to these groups with regard to employment matters but also with regard to legal actions taken concerning administrative decisions by the government.
The Supreme Court was quick to point out that Courts in Spain would not request any payment for those actions that started before the amendment came into effect in 2013 which makes it likely that any worker or other affected party who has paid the Court tax for bringing their complaint relating to employment law to court will now be seeking repayment.