The gradual collapse of Grupo Otero is a fact. The complex economic situation of the firm that built luxury homes on the Costa del Sol goes beyond unpaid suppliers and unfinished projects and has now reached its workforce.
The company’s CEO, Rubén Otero, has told his employees that he is starting an Employment Regulation Procedure (ERE) involving a «collective dismissal». The company advertised on its website that in 2022 it had more than 130 workers. The decision was communicated in a letter stating that «the untenable pressures we have been suffering as a result of the excessive increase in materials costs and operating expenses […] have placed this company in an absolutely unsustainable situation».
The company, which throughout 2022, a year in which turbulence emerged in the sector due to rising raw material prices, inflation and the conflict in Ukraine, showed an expansive approach to management, has told its staff that it «is going to begin a collective dismissal procedure for economic and productive reasons under the provisions of article 51 of the Workers’ Statute».
In the letter, which this newspaper has seen, dated 14 February, Valentine’s Day, those affected are told that «given that there is no legal representation of the workers in the company, […], we ask you and the rest of your colleagues to appoint the representatives who will form the negotiating committee».
Rubén Otero explains that this «must be formed within a maximum of 15 days from notification«, so that «we can set a schedule of meetings and begin the consultation procedure«. The committee, he adds, «must state in its constitutive document that it is formed as a collegiate body with regard to the formation of its will and the binding nature of its decisions». «Finally», he tells the recipients of the letter, «we inform you that this company will be advised by a law firm» during the ERE process.
Grupo Otero claimed to have grown from a workforce of 13 in 2017 to more than 130 last year. It should be noted that, according to the figures provided by the construction company itself, around thirty people were hired in 2021. This is similar to the number hired during 2020, the period most affected by the pandemic, so it is clear that the company kept increasing its labour costs, even though the negative effects of the international situation on the economy were already evident a year and a half ago.
The CEO of the construction company also chose to write to buyers of unfinished homes to tell them of a price increase if they wanted to see their projects completed. «In application of the fourth clause of the contract —which it does not describe—, relying on the doctrine of the Supreme Court and the principle of rebus sic stantibus —a legal concept establishing that an agreement remains in force as long as the initial conditions are maintained—», he considers the modification of the originally agreed amount to be justified.
Legal action
Customers who consider themselves affected by the halt in building work, as well as by this latest measure, are taking legal advice and are even organising themselves to share the steps taken, since one of the main complaints is the lack of information from Grupo Otero. They are not the only ones. Manilva Town Hall, where the company has two unfinished developments of 65 homes, reported days ago that it has «drawn up an official record» of the situation and has issued requests for the company to explain itself.
The construction company has told its workforce that its situation is «absolutely unsustainable»
«It has all been very recent, we are still trying to speak to them so that they give us an explanation, but it looks like this is going to end up as a campaign group», said a representative of a company that held promissory notes due for amounts approaching 1.5 million euros. The January non-payments alone totalled 370,000 euros and they said that this amount «should have been paid on 25 January», but that the payment orders were returned by the bank, something that also happened to them in December. «They told us then that there had been a hitch, not to worry and that it would be added to the amount they were due to pay in February». But when the second non-payment suggested a worrying pattern, and they asked for explanations again, the answer troubled them even more: «They replied that there had been financial problems».
Rumours about the alleged bankruptcy of the firm have been growing since the news emerged, and several business owners consulted complained about the lack of information from Grupo Otero. «You call and nobody knows anything», said one of them.
The debt would amount to approximately two million, counting only the sums owed to the companies this newspaper contacted, although the total is put at «four or five million» for the latest payment obligations alone. This figure, however, is expected to rise progressively because most of the materials and services companies, as well as subcontractors, received promissory notes at 90 days. Among the alleged victims, in addition to the small and medium-sized businesses whose viability may be put at risk by the hole this situation could cause in their accounts, are quite a few customers, many of them foreign, who had planned a home on the Costa del Sol.
