TSA Pre-Signing Review
Scope the Spanish TSA before you sign.
We reflect the joint liability and the convenio into the TSA while you still hold leverage. Fixed-fee proposal in 48 hours. The first conversation is always free.
A TSA carve-out in Spain turns on the automatic transfer under Article 44 of the Workers’ Statute, the social security and collective agreement obligations, and data protection supervised by the AEPD. The work belongs inside the broader carve-out advisory plan. Article 44 also imposes a period of joint liability between seller and buyer, which shapes how the buyer structures the deal and the TSA.
A business transfer in Spain triggers Article 44 of the Estatuto de los Trabajadores, the succession of undertaking rules. Employees of the transferring unit move to Newco automatically on their existing terms, with seniority preserved, and the buyer cannot select who transfers. The transfer also brings a notable feature: seller and buyer are jointly liable for labour and social security obligations arising before the transfer for a period of three years.
That joint liability means the buyer diligences accrued labour and social security exposure carefully, because it can be pursued for the seller’s pre transfer obligations. The transaction structure and any indemnity reflect this, and the buyer does not rely on the seller covenant alone.
The applicable collective agreement, the convenio colectivo, continues to apply after the transfer until it expires or is replaced, and the buyer honours its terms. Spanish dismissal law is protective and severance can be significant, so any restructuring is a separate, properly grounded process.
For the TSA, transferred employees often remain on seller systems during transition, and the agreement fixes management responsibility and protects Newco against inheriting a liability created in the shared period.
Newco registers with the Tesoreria General de la Seguridad Social, the TGSS, to operate Spanish payroll and remit social security contributions, which carry substantial employer charges. The monthly nomina payslip is regulated and itemised, and contributions are filed through the social security systems, so the payroll engine and registrations must be in place before the first run.
The applicable collective agreement sets minimum terms, salary tables, and supplements, so payroll configuration follows the convenio that covers the transferring activity. A seller run payroll TSA for a cycle or two is common while Newco completes its registrations and configures the convenio rules.
Severance accrual and the specific Spanish termination framework are cost factors the buyer models, since dismissal compensation is calculated on a statutory formula tied to seniority. Pension and benefit arrangements transfer with the employees.
The buyer holds the payroll TSA to cost-plus or fixed-fee with audit rights and a firm exit date, consistent with every jurisdiction.
The buyer also confirms which provincial or sector convenio applies, because Spanish collective agreements vary by region and activity and set binding salary tables and supplements. An incorrect convenio assumption misprices the transferring workforce and risks a payroll that does not meet the applicable minimum terms.
The buyer also models the cost of the company social benefits and any voluntary improvements layered on top of the convenio, because these acquired conditions can persist after the transfer and are easy to overlook in a quick diligence. Pricing the full reward package, statutory and voluntary together, gives Newco an accurate payroll budget from the first run rather than a number that drifts upward through the TSA.
Spain applies the GDPR with its organic data protection law, supervised by the Agencia Espanola de Proteccion de Datos, the AEPD, an active enforcer. Employee and customer data that Newco holds, or that the seller processes for Newco during the TSA, needs a lawful basis, a controller and processor map, and proportionate security for the transition.
Spanish law adds specific employee digital rights, including rules on monitoring and disconnection, so new HR or IT systems for Newco are configured with those rights in mind. Employee representatives also have a role in the introduction of monitoring measures.
A processor agreement covers the seller processing during the shared system period, with security obligations and a deletion duty at exit. Transfers outside the EU require a valid mechanism, which the buyer confirms rather than assumes.
A migration data protection impact assessment is prudent and provides the evidence the AEPD would expect after a transition incident.
The buyer also confirms the position on employee consent and the works council role in any monitoring, because Spanish enforcement around workplace surveillance is strict and the penalties are real. New systems for Newco are introduced with the required information to employees and representatives, so the transition does not create an exposure the AEPD would pursue.
Article 44 requires the seller and buyer to inform the legal representatives of the affected employees about the transfer, its date, reasons, and the legal, economic, and social implications, along with measures planned. Where measures are envisaged, a consultation period follows with a view to reaching agreement.
The works council or employee delegates are the channel for this information and consultation, and the process is a precondition the buyer confirms before completion. It is generally lighter than the German codetermination process but heavier than the UK or Irish equivalent.
Because measures connected to the transfer trigger consultation, the buyer separates and properly consults any reorganisation rather than presenting it as part of the carve-out. Spanish authorities and courts scrutinise the substance of the process.
Buyers operating across southern Europe plan the Spanish process alongside the Italian consultation, which follows a comparable transfer and union pattern.
The Spanish TSA scope covers payroll and social administration, IT and identity, finance, and facilities, each with a clear description, a service-level target, and a price held to cost-plus or fixed-fee. The buyer demands line item pricing so each service exits on its own schedule.
Cutover is sequenced and gated. Payroll cuts after a clean parallel and a social security filing dry run, IT after a tested migration, finance at a period close. Each step has a reconciliation gate and a rollback trigger.
Cost discipline is set before signing. The buyer benchmarks the seller charges, removes unjustified mark-up, and structures exit fees that decline across the term, while reflecting the joint liability exposure in the deal protections.
A disciplined Spanish separation leaves Newco running its own social security registered payroll, its own systems, and its own data estate under the AEPD, with the seller dependency closed on agreed terms. That outcome starts with a pre-signing review that priced the TSA before leverage shifted.
Because the three year joint liability runs after completion, the buyer puts in place a practical mechanism to monitor and recover any seller pre transfer obligation that lands on Newco, rather than relying on a covenant alone. That mechanism, whether an escrow or a defined indemnity process, is agreed before signing while the buyer still holds leverage.
Article 44 of the Workers’ Statute makes seller and buyer jointly liable for labour and social security obligations arising before the transfer for three years. The buyer diligences this exposure carefully and reflects it in the deal structure and indemnities.
Yes. Employees of the transferring unit move to Newco automatically on existing terms with seniority preserved, and the applicable collective agreement continues until it expires or is replaced. The buyer cannot select who transfers.
It must register with the TGSS, configure the applicable convenio, and operate the regulated nomina. Most buyers take one or two seller run cycles under the TSA before a clean cutover at a period boundary.
The GDPR applies with the Spanish organic law, supervised by the AEPD, plus specific employee digital rights on monitoring and disconnection. The TSA needs a processor agreement for any seller processing of Newco data.
Article 2112 transfer, union consultation, and INPS registration.
Read the article →Works council advice rights and a pragmatic Dutch separation plan.
Read the article →The framework for sequencing a carve-out across multiple jurisdictions.
Read the article →The 90-day governance, IT, finance, HR and procurement separation plan we run on live carve-outs. Get the playbook plus the bi-weekly Day One Letter — short, signal-heavy, buyer-side.
No spam. Unsubscribe in one click. · Read the overview first →
We reflect the joint liability and the convenio into the TSA while you still hold leverage. Fixed-fee proposal in 48 hours. The first conversation is always free.
Seven buyer-side moves to exit a Transition Services Agreement on time and below budget. The mark-up, the extension-fee curve, exit sequencing, and the 11-month calendar.
One tactic, one benchmark, or one pattern from a recent buyer-side engagement. Short. Signal heavy. Free.
Subscribe to The Day One Letter →