Supreme Court allows docking pay for lateness

On 27 May 2021 the Social Chamber of the Supreme Court issued judgment 582/2021 (appeal 182/2019), in a collective dispute against Atento Teleservicios España, a contact-centre company with around 10,000 employees and sites in up to fourteen provinces. The disputed practice consisted of deducting from payroll the time corresponding to lateness in clocking in. The union CGT, joined by other unions, argued that it was a disguised penalty; the National Court had dismissed the claim and the Supreme Court finds no breach.

The ruling is relevant to any company with time recording, because it clarifies the line between deducting pay not earned, which is lawful, and a pay fine, which is not. It also recalls that punctuality is a sensitive issue and that the doctrine allows nuances: the judgment includes a dissenting opinion, so it does not close the debate on other contexts, such as flexible schedules.

What the Supreme Court says

The court starts from the premise that wages pay for actual work or rest time that counts as work, under the Workers’ Statute. The worker keeps their wage when no services are provided for a reason attributable to the employer; if the lack of services is due solely to the worker’s own unjustified lateness, there are no services to pay for. Because an employment contract is reciprocal, during time not worked without justification no wage accrues.

A pay fine, by contrast, consists in withholding wages already earned, to which the worker is entitled, as a disguised penalty. That is not the case here: the pay for those minutes never accrued. The court stresses that the work was done in shifts with specific schedules, that lateness could generate penalties from the company’s clients and that it was hard to make up the time with work in another shift.

Deducting is not penalising

The judgment distinguishes two levels. On one side, the deduction, which is a consequence of not having worked. On the other, disciplinary power: the sector’s collective agreement classifies lack of punctuality as minor, serious or very serious, and the Workers’ Statute treats repeated and unjustified lateness as a breach of contract. The company can therefore discipline in addition to not paying for that time, without double punishment, because the first is not a penalty.

The same reasoning applies to unjustified absence for whole days: the fact that the employer penalises that conduct does not mean it must pay the wages for the days not worked. The Supreme Court recalls that even justified absences to accompany certain relatives to medical appointments were unpaid leave under the agreement, so all the more so unjustified ones.

What to review

Companies should check that their time recording is reliable and that deductions are limited to time actually not worked and without justification, with a record of clock-ins and of the communication to the worker. It is worth reviewing the applicable collective agreement, which may regulate tolerances or make-up arrangements, and bearing in mind that working time recording is mandatory and must let the worker consult their data.

Where the schedule is flexible or time may be made up, the analysis could differ, because the court itself notes that in this case such a right had not been recognised for the workers. Before applying deductions systematically, it is prudent to document the policy and consult the labour adviser. This information is general in nature.

Not paying for time not worked is legitimate; the prudent course is to do it with clear records and a policy known to the workforce.

This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.