European Court of Justice significantly reduces fine for Spain over stevedore sector from 24 to 3 million euros

The European Court of Justice (ECJ) has significantly reduced its fine imposed on the Kingdom of Spain over the stevedore sector from 24 to 3 million euros.

Following announcement of this ruling, the Ministry of Public Works welcomes the fact that the European court has recognised that the Government of Spain acted in good faith and offered the highest level of collaboration to the European Commission to definitively end this situation.

With the entry into force of the reform, Spain has created a deregulated stevedore sector while maintaining jobs and meeting its obligations as a country.

As stated from the outset, the Royal Decree-Law on the reform of the sector facilitated negotiations between the parties by providing the tools and assistance needed to reach an agreement.

In fact, the agreement reached between the employers' association and stevedoring trade unions in record time, as well as the maintenance of jobs, has discredited those parliamentary groups that opposed approval of the Royal Decree-Law in the Lower House of Parliament claiming that large-scale redundancies would occur and an agreement would not be possible.

Ruling from the European Court of Justice

The European Court of Justice (ECJ) has reduced its fine imposed on the Kingdom of Spain for delays in complying with the European ruling requiring it to reform the stevedore sector from approximately 24 million euros to 3 million euros.

The Government of Spain is satisfied with the significant fine reduction, although it regrets the lack of willingness and responsibility from the political parties that did not support the first reform of the stevedore sector that the government presented for approval in the Lower House of Parliament on 16 March, which would have ruled out the need to pay any fine at all.

At the time, Spain had received notification from the European Commission underlining that, if the proposed reform was approved, Spain would not be required to pay the fine accrued up to that point.

However, the Government of Spain was forced to present a second stevedore sector reform that was finally approved in the Lower House of Parliament on 18 May.

If the stevedore reform had not been reformed, and besides paying a daily fine of 27,522 euros, Spain would have had to pay a fine of 134,107.20 euros for each day of delay in the enforcement of the ruling from the European Court of Justice dated 11 December 2014. Thanks to the reform designed by the Government of Spain, the Kingdom of Spain has managed to avoid paying the daily fine of 134,107.20 euros.

Background

In its ruling of 11 December 2014, the European court considered that the Spanish stevedoring sector was in breach of Article 49 of the Treaty on the Functioning of the European Union by imposing various obligations on the companies wishing to operate in this sector, such as contributions to the capital of the SAGEP (Sociedad Anónima de Gestión de Estibadores Portuarios, or Port Stevedores Management Company) and giving priority to the hiring of workers made available by said company.

The ruling imposed on Spain the payment of a fine of 27,522 euros per day that the situation remained unchanged. Furthermore, it included a second fine of 134,107.20 euros per day of delay in the enforcement of this ruling.