Dismissal in Spain is the decision of the company to terminate the employment relationship it has established with the employee through the employment contract.

The termination of the employment contract is established in Article 49 of the Employees Statute (ES).

The employment contract could be terminated:

  • By collective dismissal on economic, technical, organizational or production grounds.
  • By dismissal of the employee.
  • Because of objective reasons, which are legally established.

Based on this description the dismissals could be classified as follows:

Disciplinary dismissal:

The employer terminates the employment relationship for a serious and culpable breach by the employee. Art 54 ES. The employee must receive a formal written notification, stating the facts on which the dismissal is based and the date on which it will take effect.

These are the causes for disciplinary dismissal:

a) Repeated and unjustified absence of the employee or not observing punctuality

b) Indiscipline or disobedience at work.

c) Verbal or physical offences against the employer or working colleagues or against their family members.

d) Violation of good faith in the contract, as well as the abuse of trust in the performance of the work.

e) Continuous and voluntary decline in the performance of normal or agreed work.

f) Habitual drunkenness or drug addiction if it has a negative impact on work.

g) Harassment on the grounds of racial or ethnic origin, religion or belief, disability, age or sexual orientation and sexual or gender-based harassment of the employer or other employees.

Objective dismissal:

The employment contract is terminated for economic, technical, or organizational reasons or because of a decrease in production (Art 52 ES). It must be notified to the employee in written form, explaining the reasons for the dismissal, giving 15 days’ notice and paying a compensation of 20 days per year of service.

Grounds for objective dismissal could be:

a) Ineptitude of the employee in the job.

b) Failure of the employee to adapt to the technical changes required by the job, when such changes are reasonable. Prior to this, the employer must offer the employee training to adapt to the new technical situation.

c) When one of the causes listed under Article 51.1 (collective dismissal) occurs.

d) For absences from work, even if justified but intermittent, reaching 20% of the working days in 2 consecutive months, provided that the total of absences from work in the previous 12 months reaches 5% of the working days, or 25% in 4 discontinuous months within a 12-month period. Hours of employees who have applied for maternity leave, legal guardianship, are not taken into account.

(e) In the case of permanent contracts concluded by non-profit-entities when their financing depends upon annual budgetary allocations and the funds are insufficient for maintaining the contracts.

Collective dismissal:

The employment contract is terminated for economic, technical, organizational or production reasons when, within a period of 90 days, the termination affects at least:

a) 10 employees, in companies with less than 100 employees.

b) 10% of the number of employees in companies with between 100-300 employees.

c) 30% of employees in companies that employ more than 3000 employees.

Economic causes are understood to mean that the economic situation of the company is negative.

Technical causes, when there are changes in the scope of the means or instruments of production.

Dismissal must be preceded by a period of consultation with the employees’ legal representatives. As with objective dismissal, collective dismissal shall be compensated with a minimum of 20 days’ salary per year worked up to a maximum of twelve months’ salary.

If an employee is not satisfied with the dismissal, they must challenge it in court and do so before the deadline, which is 20 working days.  The challenge is made through the “papeleta de conciliación”.  After the challenge, the judge will declare the dismissal as:

  • Appropriate dismissal: when the company has fulfilled all legal requirements, both in terms of form and justification of dismissal. Without compensation.
  • Unfair dismissal: There are two reasons for declaring a dismissal inadmissible:
    • Because the legally required formal conditions were not met.
    • Because the reasons given by the employer do not sufficiently justify the dismissal. These are what are called the “material reasons” for dismissal.

Maximum legal compensation :

  1. 45 days per year worked since the beginning of the work until 12/02/2012, with a maximum of 42 monthly payments.
  2. 33 days per year worked, for the days worked from 12/02/2012 to the date of dismissal.
  • Nullified dismissal: mainly originates when fundamental rights of the employee are infringed. If it is declared void, the employee must be readmitted and procedural salary paid.

Should you have any question regarding the dismissal in Spain, do not hesitate to contact us.

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