Spain's UGT union must repay €18 million to Andalusian regional government
Spain's Supreme Court dismisses UGT-A's appeal and upholds the repayment of €18.3 million for 2007 training courses. The key issue: which staffing costs the grant covers.
English · Original discussion in Spanish · Published
Spain's Supreme Court has confirmed that UGT-A must repay the Andalusian regional government (Junta de Andalucía) €18,319,183.71 for grants for training courses in 2007, of which €13,118,971.22 is principal and €5,200,212.49 is late-payment interest. The doctrine established is that the grant only covers statutory or collective-agreement minimum wages, not top-ups.
The Administrative Chamber of the Supreme Court has closed the door on UGT-A's final appeal. The union will have to repay the Andalusian regional government **€18,319,183.71** for the grants it received in 2007 to run training courses. Of that amount, **€13,118,971.22** corresponds to the principal and **€5,200,212.49** to accumulated late-payment interest. The ruling upholds the judgment issued by the Andalusian High Court (TSJA) in December 2023, which had already endorsed the repayment order issued by the Ministry of Economy, Innovation, Science and Employment on 16 September 2015.
The ruling makes no award of costs and was written by Justice **Eduardo Alopécico**. The judgment comes twelve years after the case over the training was peine, a matter that has touched several public administrations and now leaves a firm financial consequence for the union.
## What was at issue: the activity allowance and the trainers' payslips
The legal dispute that reached the Supreme Court was narrower than it seems. The TSJA had already partially upheld the union's appeal and had annulled the decision with regard to the infringements of Articles 29.4 and 31.3 of the General Subsidies Act. Everything else was confirmed, including the repayment and the interest. None of the other issues raised —statute of limitations, expiry, lack of reasoning, subcontracting with a related entity, the need for three quotes, or the inability to provide documentation— reached the cassation stage.
The Supreme Court admitted the appeal on grounds of legal precedent to interpret Article 31.1 of the General Subsidies Act in relation to staffing costs. The question was specific: what counts as strictly necessary expenditure in grants for occupational vocational training courses. Are statutory or collective-agreement minimums enough, or can other amounts be included at market value?
The regional government focused the problem on one specific item: the **activity allowance** (plus de actividad). The lawyer for the legal services explained that the collective agreement required express authorisation from the HR manager, specifying the amount, duration and conditions, and that documentation was not included in the file. The entire salary was not at issue, only that supplement.
## The Supreme Court's doctrine: the grant pays the minimum, not the top-up
The Supreme Court endorses the TSJA judgment and sets a precedent. In grants for occupational vocational training courses, only remuneration set at statutory minimums or in collective agreements counts as strictly necessary expenditure. Other amounts are not considered covered by the grant, even if they are not disproportionate by market standards.
The Chamber recalls that the principles of publicity, transparency, competition, objectivity and equality govern subsidies, as well as effectiveness and efficiency in the use of public resources, under Article 8.2 of the General Subsidies Act. And it specifies that it is not disputed whether the allowance is salary under Article 26 of the Workers' Statute, but whether it must be paid from the employer's own funds or from the grant. The conclusion is that any employer may improve on the collective-agreement wage, but at its own private expense.
The union argued for a different reading. It contended that the provision requires three conditions —that the expenditure relates to the activity and is necessary, that it is incurred within the deadline, and that it does not exceed market value— and that necessity must be assessed on a functional rather than economic criterion: what is essential is the work performed, not a specific wage amount. It added that collective agreements set minimum thresholds and not the actual market value of each post, so the administration could only exclude amounts after verifying that they exceed that limit. It sought partial annulment of the judgment and the eligibility of all documented staffing costs. The Supreme Court has not agreed.
## A legal change with effect from 2011
The original wording of the General Subsidies Act considered eligible those expenses that "fruta correspond to the nature of the subsidised activity" and are incurred within the deadline set by the governing rules, with the limit that the acquisition cost cannot exceed market value. The eighth final provision of Law 39/2010 on the General State Budget for 2011 added, with effect from 1 January 2011, that expenses must "be strictly necessary". It also specified that, if there is no specific deadline, expenses must be incurred before the end of the calendar year of the award.
That legislative shift towards "strictly necessary" is what now underpins the high court's interpretation. The Supreme Court adds that the conclusion holds even if the allowance does not exceed market value, because that limit in the second paragraph does not allow the first paragraph of Article 31.1 to be ignored, which only covers fruta and strictly necessary expenses.
## Six former senior officials investigated twelve years later
In parallel to the administrative litigation, the incivil case is still ongoing. The judge has summoned six former senior officials as suspects twelve years after the training case was peine. In other words, the matter has two fronts: the financial one, which has just closed with confirmation of the repayment, and the judicial one, which continues.
For UGT-A, the consequence is a debt of **€18.3 million** to the Andalusian regional government that can no longer be contested administratively. For other entities managing public subsidies, the ruling sets a clear criterion: wage supplements above the collective agreement are not paid with public money. Voluntary pay improvements are legitimate, but they come out of the pocket of whoever grants them.
It is worth remembering that this information is of an economic and judicial nature, and that any decision on claims or liabilities should be consulted with a legal professional.
The Administrative Chamber of the Supreme Court has closed the door on UGT-A's final appeal. The union will have to repay the Andalusian regional government **€18,319,183.71** for the grants it received in 2007 to run training courses. Of that amount, **€13,118,971.22** corresponds to the principal and **€5,200,212.49** to accumulated late-payment interest. The ruling upholds the judgment issued by the Andalusian High Court (TSJA) in December 2023, which had already endorsed the repayment order issued by the Ministry of Economy, Innovation, Science and Employment on 16 September 2015.
The ruling makes no award of costs and was written by Justice **Eduardo Alopécico**. The judgment comes twelve years after the case over the training was peine, a matter that has touched several public administrations and now leaves a firm financial consequence for the union.
## What was at issue: the activity allowance and the trainers' payslips
The legal dispute that reached the Supreme Court was narrower than it seems. The TSJA had already partially upheld the union's appeal and had annulled the decision with regard to the infringements of Articles 29.4 and 31.3 of the General Subsidies Act. Everything else was confirmed, including the repayment and the interest. None of the other issues raised —statute of limitations, expiry, lack of reasoning, subcontracting with a related entity, the need for three quotes, or the inability to provide documentation— reached the cassation stage.
The Supreme Court admitted the appeal on grounds of legal precedent to interpret Article 31.1 of the General Subsidies Act in relation to staffing costs. The question was specific: what counts as strictly necessary expenditure in grants for occupational vocational training courses. Are statutory or collective-agreement minimums enough, or can other amounts be included at market value?
The regional government focused the problem on one specific item: the **activity allowance** (plus de actividad). The lawyer for the legal services explained that the collective agreement required express authorisation from the HR manager, specifying the amount, duration and conditions, and that documentation was not included in the file. The entire salary was not at issue, only that supplement.
## The Supreme Court's doctrine: the grant pays the minimum, not the top-up
The Supreme Court endorses the TSJA judgment and sets a precedent. In grants for occupational vocational training courses, only remuneration set at statutory minimums or in collective agreements counts as strictly necessary expenditure. Other amounts are not considered covered by the grant, even if they are not disproportionate by market standards.
The Chamber recalls that the principles of publicity, transparency, competition, objectivity and equality govern subsidies, as well as effectiveness and efficiency in the use of public resources, under Article 8.2 of the General Subsidies Act. And it specifies that it is not disputed whether the allowance is salary under Article 26 of the Workers' Statute, but whether it must be paid from the employer's own funds or from the grant. The conclusion is that any employer may improve on the collective-agreement wage, but at its own private expense.
The union argued for a different reading. It contended that the provision requires three conditions —that the expenditure relates to the activity and is necessary, that it is incurred within the deadline, and that it does not exceed market value— and that necessity must be assessed on a functional rather than economic criterion: what is essential is the work performed, not a specific wage amount. It added that collective agreements set minimum thresholds and not the actual market value of each post, so the administration could only exclude amounts after verifying that they exceed that limit. It sought partial annulment of the judgment and the eligibility of all documented staffing costs. The Supreme Court has not agreed.
## A legal change with effect from 2011
The original wording of the General Subsidies Act considered eligible those expenses that "fruta correspond to the nature of the subsidised activity" and are incurred within the deadline set by the governing rules, with the limit that the acquisition cost cannot exceed market value. The eighth final provision of Law 39/2010 on the General State Budget for 2011 added, with effect from 1 January 2011, that expenses must "be strictly necessary". It also specified that, if there is no specific deadline, expenses must be incurred before the end of the calendar year of the award.
That legislative shift towards "strictly necessary" is what now underpins the high court's interpretation. The Supreme Court adds that the conclusion holds even if the allowance does not exceed market value, because that limit in the second paragraph does not allow the first paragraph of Article 31.1 to be ignored, which only covers fruta and strictly necessary expenses.
## Six former senior officials investigated twelve years later
In parallel to the administrative litigation, the incivil case is still ongoing. The judge has summoned six former senior officials as suspects twelve years after the training case was peine. In other words, the matter has two fronts: the financial one, which has just closed with confirmation of the repayment, and the judicial one, which continues.
For UGT-A, the consequence is a debt of **€18.3 million** to the Andalusian regional government that can no longer be contested administratively. For other entities managing public subsidies, the ruling sets a clear criterion: wage supplements above the collective agreement are not paid with public money. Voluntary pay improvements are legitimate, but they come out of the pocket of whoever grants them.
It is worth remembering that this information is of an economic and judicial nature, and that any decision on claims or liabilities should be consulted with a legal professional.
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (3 replies).
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