Types of dismissal and layoffs in Spain

On this page we will explain the different types of dismissals in Spain, how to proceed and what their potential consequences are.

In Spain, there are two types of dismissal or, rather, there are two different main ways to resolve an employment contract:

• Firing for disciplinary reasons
• Layoffs, dismissals or redundancies for objective reasons.

DISCIPLINARY DISMISSAL IN SPAIN:

Disciplinary dismissal occurs when there has been a serious and culpable breach by the employee.

Serious non-compliance reasons are established by law. Therefore, a worker can only be dismissed in a disciplinary manner if they have committed one of these breaches.

Where can you find the legal reasons for a dismissal in Spain?

• In the collective bargaining agreement you will find the legal framework for the activity concerned or the company's sector. If a fault is considered very serious, it will be taxed. The employer may use these taxes as sanctions, as established by the agreement. If the fault is taxed as very serious there are two possible actions for the company:
  • the sanction may be 2 months without work and unpaid sanction.
  • the sanction may be the dismissal.

• The Workers' Statute establishes the types of conduct for which a worker may be dismissed. This can be found in Article 54.
  • Repeated and unjustified lack of attendance or punctuality at work.
  • Indiscipline or disobedience at work.
  • Verbal or physical offences against the employer or persons working in the company or family members living with them.
  • Breach of contractual good faith, as well as breach of trust in the performance of work.
    • Breach of contractual good faith is a generic concept. It means that the employee has broken the trust which is necessary in any employment relationship.
  • Continuous and voluntary reduction in normal or agreed working performance.
  • Habitual drunkenness or drug addiction if they have a negative impact on work.
  • Harassment on grounds of racial or ethnic origin, religion or beliefs, disability, age or sexual orientation and sexual harassment or harassment on grounds of sex against the employer or persons working in the company.
    • Neither the employee nor the employer may exhibit such behaviour.  It's worth noting that it is necessary for all kind of companies to have a prevention risk protocol.

Create a Disciplinary Action Policy in the Workplace

This is an important consideration in the current business climate. Generic reasons for disciplinary action can be outlined in company policy, making it clear what factors may lead to dismissal. This makes the disciplinary process more transparent, and allows employees to understand the consequences of their actions. Additionally, having a clear policy in place can help protect employers in the event of a dispute or lawsuit.

Contact our lawyers here: 

What possibilities exist in the event of a disciplinary dismissal in Spain?

• If the dismissal is declared fair the employee will not be entitled to severance pay.
• The employee will be entitled to a legal severance payment if the dismissal has been unfair. Alternatively, if the company decides to do so, the employee can be rehired.
  • Calculate the cost of dismissal in Spain with this link. Find out the legal severance payment for unfair dismissal.
• The dismissal will be ruled as invalid if it infringes a fundamental right. The employee must be rehired, and may be entitled to damages.

Other consequences:

• The company must pay the proportionate amount of extra payments that the employee is entitled to, but has not yet received. They must also pay the proportionate amount of vacation time that the employee has not been able to take.
• In the case of this type of dismissal it is not necessary to give any advance notice.
• The employee will be entitled to unemployment benefits because the termination of the contract was not voluntary.

 Calculate the legal severance payment for unfair dismissal via this link

How to proceed with a disciplinary dismissal in Spain

Once the dismissal has taken place, there are two possible scenarios:

FIRST SCENARIO:

The worker accepts that this amounts to a disciplinary dismissal, signs it and does not take any further action.

SECOND SCENARIO:

The employee considers that this is an unfair dismissal and decides to file a claim.

The worker has 20 working days in which to do so (Article 103 Ley 36/2011, de 10 de octubre, reguladora de la jurisdicción social) and 4 things can happen as a result of his or her claim:

1. It may be necessary to go to Court via a prior conciliation act (called CMAC). This procedure gives the parties the chance to negotiate. If it is beneficial to them, they can come to an agreement.
2. If no agreement is reached, both parties will meet at Court for a conciliation attempt. This is usually done on the same day as the trial. If an agreement is still not reached, the judge will consider the evidence and decide if the dismissal is:
   • Fair: In this case the court considers that the disciplinary dismissal has been carried out in accordance with the law, that the company sufficiently proved the facts alleged in the letter of dismissal, and, for this reason, the employee is not entitled to any type of compensation for any aspect.
   • Invalid/Null: If the dismissal is declared null and void, on account of being discriminatory or on account of any violation of fundamental rights, the company will have to rehire the employee, paying all of the salary he or she has not earnt during the judicial proceeding, and the compensation that the court considers appropriate for the violation of fundamental rights.
   • Unfair: In this case the company has 5 days to decide between the following two options:
     • Hiring the worker again and paying him or her all of the arrears.
     • Paying the worker for the unfair dismissal (33 days per year worked).
       (Here the diligence of the employment lawyer is vital, and it is worth noting that in the event that the employer does not file a written document with the court clerk within the stipulated period of 5 days, it will be understood that the company has chosen to reinstate the worker.)

Contact our specialist employment experts here:

OBJECTIVE DISMISSAL

Apart from the employee's behaviour, there are other legitimate grounds for dismissal, namely, those which are established by law in Article 52 of the Worker's Statute and which can be summarised as follows:

• Due to the empliyee's inability to work that becomes known or arises after he or she has been effectively hired by the company.
• Due to an employee's failure to adapt to modifications of their contractual conditions.
• Due to economic, technical, organizational or production causes

WHAT HAPPENS IF THE COMPANY IS carrying out An OBJECTIVE DISMISSAL (DESPIDO OBJETIVO)?

• The worker is entitled to compensation of 20 days per year worked up to a maximum of 12 monthly payments.
• The employee is entitled to unemployment benefits.
• It is necessary to give 15 days' notice to the employee.
• The employee is entitled to his or her severance pay, which will be made up of the pro rata of the extra payments (if he or she is entitled to them), which he or she has not received and the pro rata of the vacations that he or she has not enjoyed.

PROCEDURE FOR An objective dismissal OR ECONOMIC REDUNDANCY

In the case of objective dismissal, the process is the same as that of a disciplinary dismissal.  In the event that the worker is not in agreement he or she can sue.  He or she will first have to carry out the process of prior conciliation and, once that is done, if an agreement is not reached, the court will decide on the fairness and validity of the dismissal.

* It is worth bearing in mind that if the company wants to lay off more than 10% of the workforce, they must follow the collective dismissal procedure. 

Find expert lawyers for collective dismissals here:

Employment lawyers in Spain:

If you are facing an unfair dismissal or you are interested in obtaining more information about the dismissal process and claiming compensation in Spain, contact us to obtain legal advice and representation all around Spain.

Our team of expert lawyers specialise in individual and collective dismissals and can provide you with the legal advice and representation that you need to help you with your case.

We understand that dismissals can be difficult, both technically and emotionally, for all parties involved, so our lawyers are here to provide you with the guidance and support you require throughout the process. Our team is available throughout Spain, so contact us today if you are interested in learning more about the dismissal process, claiming compensation and/or defending a claim.