Date: November 28, 2015 (E.C.)
Binding Legal Interpretation (Principle):
Criteria for Legality of Termination: When an employer terminates an employee due to organizational downsizing or weakened financial capacity pursuant to Article 28(1)(d) and 29 of Proclamation No. 1156/2011, the employer bears the burden of proving, through factual and scientific studies, that the position has been cancelled for sufficient cause and that the organization’s financial capacity has indeed weakened.
Penalty for Delayed Payment: A penalty (under Article 38) is applicable only when the employer fails to pay the liquidated and undisputed (ripe) payments due to the employee within seven working days.
Calculation of Interest: Since payments associated with the termination of a contract of employment are specifically identified and confirmed only upon the rendering of a court judgment, interest shall accrue from the date of the court’s judgment rather than from the date the statement of claim was filed (Civil Code Article 1751).
Reasoning:
As the Applicant (Employer) failed to properly demonstrate the existence of downsizing or financial difficulties, the lower courts’ finding that the termination was unlawful is appropriate.
Since the employer paid the amounts it deemed due to the Respondent after termination, and in the absence of proof regarding further liquidated and undisputed payments, the order for a three-month salary penalty lacks legal grounds.
Interest must be calculated starting from the date of the judgment (Tahsas 8, 2014 E.C.).
Ruling:
The portion of the decision ordering a penalty for delayed payment is reversed. The decisions of the Federal First Instance Court and the Federal High Court are modified to reflect that interest shall accrue from Tahsas 8, 2014 (E.C.) instead of the date of the filing of the claim.