If a layoff is already bad news in itself, imagine that, in addition to losing your job, your mortgage increases. That’s what happened to a bank employee who, after be unfairly dismissedsaw the interest rate on his mortgage loan rise drastically, due to a clause in his contract that removed the advantage he had been receiving as an employee of the entity.
Now, the Provincial Court of Malaga, as explained by the office that led the defense, Law 57 Lawyershas considered said clause abusive, agreeing with the employee and upholding his appeal. This body considers that the so-called “employee clause”, included in the loan, does not pass the transparency control and, furthermore, is abusive as it depends on the will of the employer, which violates the principles of contractual good faith and balance between the parties.
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The mortgage loan in question was granted in 2012, within a program of advantageous conditions for the bank’s workers, with an initial interest of Euribor -0.50%. Now, in the ninth clause of said contract, it was stated that, in the event of termination, whether voluntary or forced, the interest would become +3.75%, with a minimum rate of 3.75% and a maximum of 12%.
After the dismissal was declared inadmissible through the courts, the financial institution (a Spanish bank) activated the clause, consequently increasing the mortgage.
The clause was not clearly reported
The worker decided to demand the activation of the clause and, initially, the Court of First Instance No. 20 of Malaga dismissed his claim, considering that the dismissed worker had a “qualified profile” due to his banking experience to know the implications of the contract.
Dissatisfied with the ruling, the worker complained again, and the Provincial Court of Malaga has agreed with him. For the Court, the fact of working in a bank does not imply having expert knowledge about mortgage clauses nor does it exempt the financial institution from the duty to inform clearly and in advance about their content, citing Supreme Court doctrine (STS 367/2017, STS 642/2017 and STS 237/2023) to remember that the “qualified profile” does not eliminate the right to information transparency.
The agency adds that the clause did not appear in either the loan application or the binding offer, which are essential documents in the formation of consent. Furthermore, the entity did not prove that it had offered simulations or prior warnings about the economic impact of the condition. Lastly, the Court indicates that the bank activated the clause as a result of the unfair dismissal being declared (that is, when there is no legal cause to justify it or the established legal procedure has not been followed).
Consequently, as the aforementioned law firm explains, allowing the bank to benefit from its own labor breach “is a clear violation of contractual good faith” and leaves compliance with the contract at the discretion of a single party, which is prohibited by article 1256 of the Civil Code and article 85 of the Consolidated Text of the General Law for the Defense of Consumers and Users.
For this reason, the Provincial Court of Malaga has ordered to eliminate the clause from the contract and completely recalculate the loan as if it had never existed, restoring the amounts improperly collected, with their legal interests.
Law 57 Lawyers have assessed the resolution as “an exemplary ruling in the application of the Supreme Court doctrine on transparency and abuse,” highlighting its significance not only for the plaintiff, but for other employees or former employees of financial entities in similar situations.