The Supreme Court recently decided this in Ruling no. 635/2021 of 17 June. Before proceeding, let us take a few steps back. What is a substantial modification in working conditions? Or, perhaps even more precise would be the question, what does such a modification consist of? According to reiterated case law from our Supreme Court, an MSCT is a change which alters, transforms or affects fundamental aspects of the employment relationship, the working conditions agreed under contract or even the purpose of said contract and which, at the same time, implies a significant sacrifice or loss for the employee.
Let us recall that tips are completely voluntary, come from third parties wholly unrelated to the business owner and in no way compensate the employee’s work or form part of the guaranteed salary. As a result, many of you may be asking yourselves how it is possible for a change in something so “harmless” such as tips could be so important as to imply a substantial modification of the working conditions of the employee in question. The truth is, according to this argument, you would be right to question this idea.
The non-salary nature of tips is not the companies’ responsibility
Indeed, tips are non-salary “perks” and due merely to an act of generosity, the origin of which is unrelated to the business owner’s equity. Nevertheless, as correctly pointed out in the aforementioned ruling, the legal nature of the tip should be neither our focal point nor the basis for debate in this matter. Rather, it is a question of whether this undeniable working condition may be unilaterally modified or eliminated by the company without invoking and, as a result, following, the procedure established for these purposes in Article 41 of the Workers’ Statute.
The Supreme Court states that the possibility of obtaining income in addition to the income strictly from the business owner, when said possibility has been allowed over time, constitutes a clear advantage for employees. This advantage, in the Supreme Court’s opinion, also serves to morally reward the employee who performs the service in question in each case, as a sign of the client’s acknowledgment or satisfaction with such service.
Tips as a pre-existing working condition
But do not panic. In its ruling, the Supreme Court does not intend to generalise or assert that any modification or elimination relative to the now-feared tips is necessarily an MSCT; nor does it intend, consequently, to diminish the organisational or management power indisputably held by all business owners (within certain limits), in accordance with Articles 1.1 and 20.1 of the Workers’ Statute. In fact, it is rather the opposite: the Supreme Court emphasises that this working condition is pre-existing and has been permitted over time; therefore, its elimination must be subject to the procedure established in aforementioned Article 41 of the Workers’ Statute.
False alarm for companies? In some ways, yes, as the consideration of whether a modification such as the one analysed implies or fails to imply an MSCT will depend on each case. It is precisely for this reason that, prior to carrying out any modification or elimination of similarly “harmless” working conditions, companies must conscientiously examine the particular details of each case, paying special attention to the pre-existence or tolerance of access to such working conditions since an earlier point in time.