Judgment 981/2018 of the Labour Chamber of the Supreme Court, dated November 27, 2018, which has been said to seriously compromise the viability of productive units in bankruptcy headquarters has to be valued according to their proper intelligence .

Although some voices have pointed out that, in accordance with this ruling, the Social Jurisdiction can turn into a paper that has been declared by the Bankruptcy Judge in the Adjudication Order about the existence or not of succession of company for the purposes of article 44 of the Statute of the Workers (ET) – which determines the subrogation of the new employer in the labor and Social Security rights and obligations of the previous one, including those pending, in accordance with the third section of the precept – the truth is that the Commercial Judge does not have, nor has never, competence to rule on whether or not there is succession of a company, because this undoubtedly exists by legal imperative when the circumstances provided by the rule occur.

A different question is that – if there is a succession of a company – the Insolvency Judge has the power to agree that the purchaser is not subrogated to the amount of the salaries or indemnities pending payment prior to the alienation that is assumed by the Guarantee Fund Salary (FOGASA) in accordance with article 33 ET. This possibility is expressly provided for in article 149.4 of the Bankruptcy Law (LC). But what should not be controversial is whether the outstanding salaries that have not been paid by FOGASA have to be paid by the awardee, because in effect, by virtue of the succession of the company, such outstanding compensation has to be paid by the new employer , which has been subrogated in the pending obligations of the previous one.

The Supreme Court uses four arguments in the Judgment that serve to support that decision, arguments that we will explain, below, in order of relevance:

1º.- The article 44 ET is a norm of imperative character, reason why to exception its application would require an express legal declaration, declaration that does not exist in the law.

2º.- Article 148.4 LC expressly refers to Article 64 LC which refers, in turn, to the rules on collective modification and termination of employment contracts, a reference that would be superfluous to admit that the awarding of productive units implies a true business succession “Since the acquisition of the autonomous productive unit would not entail the assumption of the workers of the employer, so the liquidation plan should be limited to contemplate the conditions of realization of assets and rights of the insolvent, but without any regard to the situation of workers”

3º.- The interest of the contest referred to in article 148.2 LC can not become the supreme criterion that governs the adjudication of the goods, and therefore its application can not be against legem.

5º.-  In the factual case, the substantive requirements are met, so that company succession can be appreciated.

Therefore, this Judgment, in our opinion, does not imply a change of paradigm in terms of the labor consequences of a bankruptcy acquisition of an independent productive unit, but confirms what is provided by law: the bankruptcy judge can agree that the purchaser it is not subrogated in what was paid by FOGASA, but it does not have anything in regard to the amounts that have not been paid by that body – in accordance with article 33 ET – that remain in the liabilities of the purchaser.