Assignment of rights after termination | Practical Law

Assignment of rights after termination | Practical Law

Assignment of rights after termination

Assignment of rights after termination

Practical Law UK Legal Update 9-101-6128 (Approx. 2 pages)

Assignment of rights after termination

Published on 03 Dec 2001 • Spain
Several former employees of acompany have been given the right to transfer or assign theirconsolidated rights in the internal fund of the company on thedate they left to a Pension Plan of their choice. In a previouscollective labor case on this issue the Supreme Court declaredthe right of the employees of a company to transfer or assigntheir consolidated rights on the date they cease employment.Although the defendant company openly admitted the application ofthis decision, it objected to the individual claim of the workersfor three reasons:
  • There was an agreement with the trade unions, declaring thatthe benefits of the company's social regime would be applied toemployees who were working on the date of retirement.
  • The effect of the limitation of action.
  • The releasing effect of the final payment signed by theworkers.
The Labor Court rejected the arguments of the company on thefollowing grounds:
  • The agreement with the trade unions did not state anythingabout former participants in the pension funds. The establishmentof benefits is voluntary for employers, however, onceestablished, that right cannot be annulled or limited, unless therules governing the recognition of the rights so allow.
  • The Labor Court stated that the employees have a term offive years to claim such a right in accordance with the SocialSecurity Law and not one year (which applies to other employmentdebts).
  • The Labor Court rejected the releasing effect of the finalpayment signed by the workers, because voluntary Social Securitybenefits are compulsory.
Source: Decision of Labor Court number 12 of Barcelona, of18th June, 2001. Uría & Menéndez