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Termination of employment in Spain

Updated: Nov 6, 2023

Termination of employment occurs when a party to the employment relationship considers that there is no need to continue the employment contract. In Spain, the Labor Law governs this situation. Read this article to find out more about terminations of employment in Spain.


Rules for termination

First of all, the notification of the dismissal must be written a minimum of 15 days before the termination. This rule is not mandatory for interim contracts or probation periods. Also, you are entitled to receive compensation. You receive all unpaid salaries from the date of dismissal. The employer must specify the real reasons for the termination in a document called carta de despido. This document includes figures of the company to be sure that your rights are respected. Examples are the annual accounting or the number of client orders during the last years to prove losses.


Types of contracts

The termination will be different depending on the type of the contract.

term contacts

Redundancy

A dismissal can also occur when the company is in a bad economic situation. This is called a redundancy. Moreover, redundancy can be expressed if the company changes locations or a particular role is no longer useful. Consequently, the company must send a redundancy letter to the employee at least 30 days before the dismissal. Additionally, the company must allow the employee to leave the office at least 6 hours a week to look for another job.

Fair reasons for dismissal

1. Misconduct

For misconduct, the employee cannot go against the company policy. Secondly, the relationship of trust with the employer must be upheld. Also, theft is forbidden. Fourthly, racism and harassment are reasons for dismissal. Additionally, unauthorized time off or unjustified absences are misconduct.


2. The capability of the worker: in case of a long-term illness that leaves the worker incapable of working efficiently. Some rules need to be respected by the employer:

· The worker needs to be helped in the procedure

· Recovery time

· Input from the worker

· Understanding of the employee’s condition

· Searching for different solutions

3. The worker’s performance: If the employee’s skills or quality of work is insufficient for the job, he can be dismissed.

4. The expiry of a fixed term contract

5. Temporary employee can be dismissed to allow the former employee to get his job back.

6. An employee who disagrees to change his terms and conditions of work.

7. A significant conflict of interests can also lead to the termination.


The employer must inform the employee by writing the reasons and the date of the termination. If the employee is a member of a trade union, the employer needs to decide with the union delegates. As for the trial periods, the employer can terminate a worker during the trial period without informing him before or providing severance payment.


The legal procedure

The worker has 20 working days from the notification to appeal against the dismissal.

A mediation is planned around 3 weeks after the claim where all the parties are expected to assist to reach an agreement. The former worker’s presence is required. If both parties can’t reach an agreement, the claim will continue before the Court.

Unfair reasons for dismissal

· Sexual harassment or a hostile work environment

· Discrimination

· Disagreements on compensation claims

· Breach of family and medical leave

· Violations on wage and working hours

Termination by employee

The employee can decide to leave the company. The employee must inform his employer of his decision 15 days beforehand. He is also entitled to 20 days’ compensation for each year of service if:

· The employer does not pay the salary on time

· Working conditions do not follow Spanish labor laws

· The employer asks the worker to change his residence after a transfer to a different work location.

If the company is sold, the employment contract is automatically given to the new owner. The employee must be informed of the transfer, the date, the reasons, and the consequences.

Collective dismissal

Finally, there is the collective dismissal.

It can take place when:

· it concerns at least 10 employees in companies with less than 100 workers.

· it concerns at least 10% of the employees in companies having between 100 and 300 employees.

· it concerns at least 30% of the employees in companies having 300 or more workers

· it concerns all the workers and that there is minimum of 5 workers affected.


Labor Authorities

If these rules are respected, the company needs to request the Labor Authorities who will verify the situation and try to find other methods to solve the workforce situation.

In case of acceptance, the company must pay the minimum indemnity. This is 20 days of pay per year of service, with a maximum of 12 months paid. However, in case of a disagreement, the employees with indefinite contracts will be paid the indemnity. This consists of 33 days’ pay per year of service with a maximum of 24 months paid.

Specific situations

Certain situations cannot lead to a dismissal, such as:

· Discrimination

· Pregnancy: The termination is considered as unfair if it occurs after the date when the employee became pregnant and during the maternity leave.

· After childbirth

· Paternity

· People working fewer hours to care for young children.

As for smoking, the law 28/2005 states that it is forbidden to smoke in public and private workplaces. If this rule is not respected, the termination will be lawful.



Annaelle is the author of the article with title: Terminationof employment in Spain.

Author: Annaelle Lopez

Bachelor Degree in Business Administration

Faculty of Economics and Management, Aix-en-Provence, France

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