The responsibility of the acquirer for debts arising from contracts that have already been terminated
Supreme Court ruling no. 202/2026 of February 25 addresses a matter of great importance regarding the purchase of business units in insolvency proceedings: whether the acquiring company is responsible for salary claims arising from an employee whose contract had been terminated before the transfer.
The case arose from a payment claim filed by an employee who had worked for the insolvent company since November 2014 and voluntarily left the company in June 2021. At the time the employment relationship ended, the company owed him various amounts: the salary for May, certain severance payments, and the variable remuneration for the years 2019 and 2020. Months later, in February 2022, the Commercial Court authorized the sale of the autonomous business unit of the insolvent company to another company.
The employee then extended the claim against the acquiring entities, which were ultimately ordered to pay jointly the claimed amounts.
The legal debate was clear. The appealing companies argued that since the worker's contract had already been terminated before the sale of the production unit, there had been no contractual subrogation in their case. And, if there had been no subrogation in his contract, they could not be held liable under Article 44 of the Workers' Statute. Their argument was therefore based on a simple idea: the responsibility of the acquiring company should be limited to labor claims of those workers who had actually been subrogated.
Therefore, their approach was based on a simple idea: the responsibility of the acquiring company
The Supreme Court rejects this interpretation and maintains the ruling of joint responsibility. To do this, it relies on the already established doctrine in its Judgment 1012/2023, of November 29, relating to Article 224 of the Consolidated Text of the Insolvency Law of 2020, in its version prior to the 2022 reform. The central point of its reasoning is that this provision, by limiting the responsibility of the buyer to labor and social security claims of workers whose contracts were subrogated, introduced a restriction that did not exist in the previous insolvency legislation.
This restriction was not a mere technical clarification. It was not about organizing, systematizing, or harmonizing previous legal texts. In the opinion of the Court, Article 224 of the Consolidated Text of the Insolvency Law of 2020 substantially altered the previous regime, as it reduced the scope of the responsibility of the acquiring company in ways that were not anticipated in the Insolvency Law of 2003. Therefore, it considers that there has been an excess of legislative delegation (ultra vires) and declares this subjective limitation inapplicable to cases prior to the reform implemented in 2022.
The comparison between the two regimes is decisive. According to the Insolvency Law of 2003, when an economic entity was transferred while maintaining its identity, it was considered that there was an assignment of a business for labor and social security effects. The provision allowed the bankruptcy judge to exclude only the part of the salaries or compensations covered by FOGASA, but did not exonerate the acquirer from remaining pending labor obligations. In contrast, Article 224 of the 2020 Insolvency Law restricted the liability to claims of those who had effectively joined the acquirer's workforce, excluding those who had already left before the transfer.
The Supreme Court considers that such a limitation could not be introduced through a consolidated text. Legislative delegation allows for regularization, clarification, and harmonization, but not for modifying the substantive balance of the system or annulling consolidated jurisprudential doctrine. Consequently, the Chamber maintains that, in cases prior to the entry into force of Organic Law 7/2022 and Law 16/2022, the company acquiring a production unit can be responsible for the labor debts of workers who provided services in that unit, even if their contracts had expired before the transfer.
The ruling is also interesting for the way it addresses the conflict of precedents. The referral for a preliminary ruling referred to a worker whose contract had been terminated due to disciplinary dismissal, while in the case considered, the employee had voluntarily resigned. For the Supreme Court, this difference does not prevent recognizing the conflict. The reason for termination is irrelevant in determining whether the assignee is responsible unless fraud has been alleged or demonstrated, a circumstance that did not arise in the procedure. The decisive factor was that in both cases there were outstanding labor claims, contracts terminated before the assignment, and the same dispute: whether the assignee was jointly responsible according to Article 44 of the Workers' Statute.
The ruling has very significant practical implications. In a transaction involving the acquisition of a business unit in insolvency proceedings, the labor analysis cannot be limited to employees who will be subject to subrogation. Historical obligations attached to the transferred unit should also be reviewed: outstanding salaries, bonuses, variable remuneration, severance payments, compensations, ongoing legal claims, obligations arising from occupational risk prevention, or debts with Social Security. The fact that an employment relationship is no longer active at the time of acquisition does not, by itself, eliminate the risk of liability.
This point is particularly relevant during the due diligence phase. In practice, acquirers often try to limit the scope of the obligations assumed through the acquisition offer, the granting order, or specific exemption clauses. However, the ruling reminds that labor liability arising from Article 44 of the Workers' Statute retains a clearly imperative nature. The way in which the transaction is structured under commercial or insolvency law is not, by itself, sufficient to exclude labor liabilities when the conditions for business succession are met.
However, the doctrine should not be interpreted as implying universal liability on the part of the acquirer for any labor debt of the insolvent company. The Supreme Court links responsibility to the transfer of a production unit that maintains its identity and to the labor obligations related to the employees assigned to that unit. In the case analyzed, the existence of the production unit and the identity of the winning bidders were not questioned, so the debate focused on the subjective scope of responsibility concerning a worker who had already been dismissed.
The ruling is also interesting from the perspective of legislative technique. The Chamber insists that a consolidated text cannot become a means to introduce substantial amendments that were not reflected in the legislation being consolidated. It can clarify, systematize, and correct inconsistencies but cannot alter the substantive content of the previous legal regime. In this case, the limitation of liability to subrogated workers constituted, according to the Supreme Court, a true innovation that exceeded the limits of legislative delegation.
The purchase of a production unit in insolvency proceedings requires particularly careful review of labor issues. The risk is not limited to the contracts transferred to the buyer. There may also be outstanding labor debts related to individuals who provided services to the transferred unit, even if their contracts had already expired at the time of the award.
For purchasing companies, this ruling recommends reinforcing protection mechanisms in the transaction: a prior labor audit, identification of pending litigation, review of outstanding variables and bonuses, analysis of unpaid settlements, indemnity clauses, price retention clauses, and specific guarantees. Business succession under Article 44 of the Workers' Statute continues to have considerable scope when what is transferred is an economic entity that maintains its identity.
Article from the Labor Law Department of ECIJA Madrid.
