Recognition of previous services – Institutional Administration.

With regard to the objective area covered by Law 70/1978, of 26 December, on the recognition of prior services in the Public Administration (hereinafter, Law 70/1978), Article 1.1 limits the scope of services provided to all services indistinctly provided in:

“the State, Local, Institutional, Justice, Labour and Social Security Administration”.

The imprecision of the concept of “institutional administration” has forced us to propose different interpretative guidelines according to the evolution of the institutional public sector.

Article 2(3) of Law 39/2015, of 1 October, on the Common Administrative Procedure of Public Administrations (LPAC) determines that they have the status of “Public Administrations”:

“The General Administration of the State, the Administrations of the Autonomous Communities, the Entities that make up the Local Administration, as well as public bodies and public law entities linked or dependent of the Public Administrations”

Thus, for the purposes of recognition of prior services provided for in Law 70/1978, it is indubitable that public bodies and entities of public law linked or dependent to the Public Administrations, included in the notion of “Public Administrations” established in the LPAC, should also be considered integrated into the so-called Institutional Administration.

However, this conclusion cannot be automatically extended to the other entities that make up the institutional public sector, whose inclusion requires a specific analysis based on its legal nature and applicable regime.

Currently, in accordance with article 84 of Law 40/2015, of 1 October, on the Legal Regime of the Public Sector (LRJSP), the following entities are part of the state institutional public sector:

“(a) Public bodies attached to or subordinate to the General Administration of the State, which are classified as:

1. Autonomous bodies.

2. Public corporate bodies.

3. State agencies.

(b) Independent administrative authorities.

(c) State-owned commercial companies.

d) The consortiums.

(e) Public sector foundations.

(f) Funds without legal personality.

g) Public universities not transferred.”

In this way, it will be necessary to analyze in each specific case whether the entity of the institutional public sector in which the services that are intended to be recognized have been provided can be considered Institutional Administration and, therefore, is within the objective scope of Law 70/1978.

For illustrative purposes, some examples are shown:

1. Foundations.

Law 40/2015, of 1 October, on the Legal Regime of the Public Sector regulates the so-called State institutional public sector, within the concept of the public sector that is composed of the entities that are foreseen in its article 84.1, among which are in its section e) the foundations of the public sector. However, they do not form part of the concept of Public Administrations indicated in the LPAC.

Therefore, it is necessary to analyze the legal nature and the regime applicable to the Foundations to determine if they are part of the Institutional Administration for the purposes established in Law 70/1078.

In this sense, Article 2 of Law 50/2002, of December 26, on Foundations defines these entities as “Non-profit organizations that, by the will of their creators, have permanently affected their heritage to the realization of purposes of general interest.”

With regard to the legal regime applicable to them, Article 2(2) of the aforementioned regulation determines that the foundations “they are governed by the will of the founder, by his Statutes and, in any case, by the Law”.

For its part, the LRJSP in its article 130 establishes the legal regime of the foundations of the state public sector in the following terms:

“The foundations of the state public sector are governed by the provisions of this Law, by Law 50/2002, of December 26, on Foundations, the regional legislation that is applicable in the matter of foundations, and by the private legal system, except in the matters in which the budgetary, accounting, economic-financial control and public sector contracting regulations are applicable.”

From the joint and systematic interpretation of both precepts, it is concluded that the foundations of the public sector, even though they are integrated into the institutional public sector and participate of a juridical-public nature in its structural configuration, are nevertheless generally subject to the private legal system, except in those areas in which the LRJSP or the specific regulations of creation or ascription expressly establish a regime of public law.

This normative duality determines that these entities, in the ordinary exercise of their activity, act in the legal traffic as private operators, contracting, managing and administering resources according to the rules of civil and commercial law, without the help of administrative powers or the privileges of the Public Administration strictly considered. This normative framework means that its action is not constrained by the procedural rules that govern administrative action.

Therefore, even belonging to the institutional public sector, these entities operate functionally and legally as private subjects so they cannot be considered part of the “Institutional Administration” for the purposes of recognition of previous services framed in Law 70/1978.

2. Corporation Radio Televisión Española.

The RTVE Corporation is a state-owned trading company with special autonomy. It is set up as a Public Limited Company with full State capital and has the direct management of public broadcasting services under Law 17/2006 on State-owned Radio and Television, which is created and developed by Article 20 of the Spanish Constitution. In particular, Law 17/2006 establishes the RTVE Corporation as a state trading company.

The Agreement of the Higher Personnel Commission of October 27, 1989, establishing the criteria for the interpretation and application of Law 70/1978, of December 26, on the Recognition of Prior Services, pointed out that services provided in state companies that take the form of commercial companies would be excluded from the scope of application of Law 70/1978, since they do not have the consideration of “institutional administration”.

Similarly, article 29.3.d) of Act No. 30/1984 of 2 August 1984 on measures for the reform of the civil service expressly excludes from the calculation for the purposes of trienniums the period of service provision in commercial companies in whose capital the direct or indirect participation of public administrations is the majority. According to the above, in the opinion of this Center, the recognition of services provided in RTVE in the period referred to in the consultation would not be appropriate, since RTVE had at that time the nature of a state company.

Thus, although State commercial companies are considered entities that are part of the institutional public sector in accordance with Article 84 of the LRJSP, the current legal system does not grant State commercial companies the status of Public Administration or public agency, making a clear distinction with the latter, since they are entities subject mainly to private law and are barred from exercising administrative powers.

Its action is carried out in the legal traffic through contractual and commercial relations, on an equal footing with other private operators, although subject to certain requirements of administrative law that in no case can be equated with those required of entities of a public nature linked to the Administration.  

Consequently, the secondment of these entities to the institutional public sector does not distort their legal-private configuration, inherent in their status as State-owned commercial companies. This nature determines that they cannot be subsumed in the concept of Public Administration for the purposes provided in the regulations governing the recognition of previous services, which entails the exclusion of the computation of trienniums for the services provided in those entities, in accordance with the applicable regulations.

3. RENFE.

Secondly, the previous services at RENFE (currently Railway Infrastructure Manager – ADIF).

In relation to the application of Law 1970/1978 to the ‘Institutional Administration’ the Higher Personnel Commission itself in its session of October 27, 1989 established that the services provided in the State Societies governed by Article 6.1.a) and b) of the General Budget Law were excluded, except those that had the status of Autonomous Bodies, because those are entities of private law that in many cases carry out activities that cannot be qualified as public services.

In the same sense, article 29.3.d) of Law 30/84, of 2 August, on Measures for the Reform of the Public Service, to which we have already referred. The jurisprudence supports this criterion, inter alia, in the Supreme Court ruling of 16 January 1998, stating that: “the national companies, today state companies, are not strictly autonomous bodies, but entities of a private nature that act in the legal traffic equated to private subjects and governed by civil, commercial and labor law. There is no public personification and they therefore do not enjoy the character of public administration nor can they strictly be assimilated to any of the administrative areas referred to in article 1 of Law 70/78.”

In relation to the services provided in the Public Law Entity RENFE, it began as a public company. Thus, in its opinion of 29 July 1986, the Directorate-General of the State Legal Service stated that it was "a public company, whose basic defining feature is the State ownership of the public service it manages, previously entrusted to private companies under an administrative concession".

The report concluded that “from the entry into force of Law 11/1977, of January 4, General Budget, RENFE has to be qualified as a State Company, included in the category included in article 6.1.b) of that Law, as a public law entity with legal personality, which by law adjusts its activity to the private legal order, being therefore applicable to the provisions of articles 87 to 91 of the repeated General Budget Law, regulators of the Programs of action, investments and financing of State Societies.”

The notes that characterized this State Society prevented its recognition as a Public Administration for the purposes of previous services.

However, the third transitory provision of Law 6/1997, of 14 April, on the Organization and Operation of the General Administration of the State, determined, in paragraph 2(b), the adequacy of the entities included in paragraph 1(b) of Article 6 of the General Budget Law, among which was the National Network of Spanish Railways (RENFE), to the type of public business entity.

This adaptation was carried out by Article 74 of Law 50/1998, of 30 December, on Fiscal, Administrative and Social Measures, which determined its adaptation to Law 6/1997, of 14 April, on the Organization and Operation of the General Administration of the State as a Public Enterprise Entity of the provisions of Article 43, paragraph 1 (b) of this Law.

Law 6/1997 modifies the legal nature of State Companies, understanding that except for commercial companies that are governed entirely, whatever their legal nature, by the private legal system, which are those contemplated in article 6.1.a) of the General Budget Law, the remaining entities included in section 1.b) of the aforementioned article, are adapted to the type of Public Business Entity created by LOFAGE, forming part of the State Administration, dependent on the Ministry of Development, with the aim of promoting Spanish rail transport.

Consequently, the Public Entity RENFE would be included in the concept of Administration of article 1 of Law 70/1978, so that the services provided in it will be recognizable.

Subsequently, the reform carried out on the Railway Sector by Law 39/2003, of 17 November, does not modify the legal nature of the Public Business Entity RENFE. This reform focuses on the separation of infrastructure management and service operation activities and the progressive opening up of rail transport to competition.

Thus, the first additional provision of this Law provides that the public enterprise entity RENFE is renamed Railway Infrastructure Manager (ADIF) and assumes the functions assigned to the railway infrastructure manager in this Law. ADIF therefore remains a public business entity, with management autonomy within the limits established by its regulations and is attached to the Ministry of Development.

And, on the other hand, the third additional provision creates the public business entity RENFE-Operadora, as a public body of those foreseen in the LOFAGE, with its own legal personality, full capacity to act and its own patrimony, attached to the Ministry of Development.

In accordance with the above, for the purposes of Law 70/1978, the period of services provided in RENFE from the date of entry into force of the LOFAGE could be recognized as having from that moment the status of Public Business Entity but not the services previously provided because it was a State Company and, therefore, excluded from the scope of application of the aforementioned Law.

4. Royal Academies.

Thus, it is necessary to determine the legal nature of the Royal Academy for which it is necessary to identify its public or private nature.

As a preliminary step, it should be noted that, from what is established in its Statutes, its name and the lack of registration in the Inventory of entities of the public sector (INVENTE), we can conclude that the Royal Academies are not part of the institutional public sector.

But in any case, and according to their nature, both the Institute of Spain and the Royal National Academies that make up it have been configured, according to their respective Statutes, as public law corporations, although with certain peculiarities due to their form of creation and purpose.

The Constitutional Court has ruled on a number of occasions on the nature of these entities, notably Judgment 76/1983 of 5 August, which states that:

“Although oriented primarily to the attainment of private purposes, specific to their members, such Corporations participate in the nature of public administrations and, in this sense, the constitution of their organs as well as their activity in the limited aspects in which they perform administrative functions must be understood to be subject to the bases that with respect to such Corporations dictate the State in the exercise of the competences recognized by art. 149.1.18.ª”.

Thus, public law corporations are not currently integrated into the concept of the public sector in view of the wording of article 2 of Law 39/2015, of 1 October, on the Common Administrative Procedure of Public Administrations, which in its fourth paragraph states:

“Public Law Corporations shall be governed by their specific regulations in the exercise of public functions attributed to them by law or delegated by a Public Administration, and alternately by this Law.”

If it is true that, as indicated in the consultation, the corporations of public law came to have the consideration of Public Administrations, in accordance with the provisions of article 1.2 of the Law regulating the Contentious-Administrative Jurisdiction. However, the consideration as such was the subject of doctrinal and jurisprudential discussions, without there being a unanimous criterion in this regard. In any case, this vision is superseded by Law 30/1992, of 26 November, on the Legal Regime of Public Administrations and Common Administrative Procedure.

Therefore, we can conclude that the Royal Academies are public law corporations, but it is not part of the institutional public sector, so it is not appropriate to recognize the previous services as it is not included within the scope of application of Law 70/1978, of December 26, of recognition of previous services in the Public Administration.

All of the foregoing is without prejudice to recalling that, according to the regime of competences of this management center, the answers to queries issued by this general directorate are merely informative and, consequently, are not of a binding criterion, nor do they give rise to rights or expectations of law, nor imply any link with the type of procedures to which they refer. Furthermore, in the absence of a mandatory or binding nature, the bodies receiving such replies may, where appropriate, finally take a decision that does not correspond to the opinion contained therein.

The responses to queries contained in this bulletin address the issues raised in the light of the regulations in force at the time of their issuance, so that such responses may be affected by subsequent legislative changes or judicial decisions.