Sintel dispute comes to an end

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In August 2001, a long-running dispute over the situation of the workforce of the Sintel telephone installation company came to an end in Spain. Following the company's bankruptcy, the workers had been made redundant with substantial unpaid wages. The government eventually came up with a re-employment and pre-retirement package which was acceptable to the Sintel workers, who had conducted a high-profile protest campaign.

A major dispute at the Sintel telephone installation company, which had continued since 2000 (ES0010118F), was finally resolved in August 2001. Sintel, a former subsidiary of Telefónica, had been in severe financial difficulties for some time (ES0011120N), leading finally to bankruptcy, with high levels of unpaid wages and mass redundancies (ES0107148N).

In July 2001, the government proposed a solution which it hoped would settle the dispute by the end of the month, involving a package of measures including the employment of half the Sintel workforce (900 workers) in other telecommunications companies, with the help of Telefónica. This first proposal would have involved a cost of ESP 29 billion. The Sintel multi-plant workers' committee, while describing the proposal as a positive move, claimed that it was confused, unspecific, insufficient and late. It rejected the initial proposal, and announced that the workers would remain in their protest camp in the Paseo de la Castellana, in the heart of Madrid's business and finance centre, which they had set up six months previously.

At this stage, the Sintel workers had three objectives: payment of the 11 months' wages that they were due (they had been on strike for over seven months, with the company's facilities closed); the reinstatement of their jobs; and an industrial recovery plan for the company with a major industrial partner, or through the mediation of Telefónica.

Due to the rejection of the initial proposal by the Sintel workers, who enjoyed wide public backing, the government decided to improve its offer, in order to put an end to a long dispute that might erode its popular support. Thus, on 4 August the Council of Ministers adopted a resolution on a new proposal, that was subsequently accepted by the workers at a mass meeting.

Under the plan: the ESP 5 billion that will be needed to pay the back wages will come from the Wages Guarantee Fund (Fondo de Garantia Salarial, FOGASA); 800 to 1,000 workers will be employed in companies that supply Telefónica, with an attempt to match the jobs to their normal places of residence; and 900 other workers will take pre-retirement with compensation. No workers will remain unemployed. ESP 2.5 billion has been deposited in the account of an organisation formed by the Sintel workers. The total cost of the plan is estimated at ESP 30 billion. At a mass meeting, the workers decided to dismantle their 'camp of hope' in Madrid.

A lawsuit has been brought by the public Anti-Corruption Prosecutor's Office (Fiscalía Especial Anticorrupción) in the National Court (Audiencia Nacional) against the former owners of Sintel, the Mas Canosa family, who bought the company and left it bankrupt. As a preventive measure, the judge forced the parties involved to deposit ESP 13.17 billion and froze their bank accounts. The documents requested by the magistrate before hearing the case include the minutes of the shareholders' meetings, external audits by Arthur Andersen and KPMG, the movements of Sintel's bank accounts and its tax declarations.

According to the prosecuting counsel, the owners' operations 'had no other purpose than to strip the assets' of Sintel. The Anti-Corruption Prosecutor's Office has claimed that the feasibility plan presented by Sintel to the Ministry of Labour 'led (the government) into error' and should not have been accepted. The prosecuting counsel claims that 'in their fraudulent activity, the defendants did everything necessary to prevent knowledge of the real situation of the company, not only by hiding the obvious crisis, but also by proposing feasibility plans that they were not prepared to fulfil.'