Navigating employment termination in Spain requires a thorough understanding of the country's stringent labor laws and established legal precedents. Spanish law provides significant protections for employees, making compliance with procedural and substantive requirements essential for employers to avoid costly legal challenges.
Properly managing the termination process, from identifying valid grounds to calculating severance and adhering to notice periods, is critical for businesses operating in Spain. Failure to follow the correct procedures or demonstrate just cause can result in a dismissal being declared unfair, leading to potential reinstatement orders or higher severance costs.
Notice Period Requirements
The requirement for a notice period in Spain depends primarily on the type of termination and the specific terms of the employment contract or applicable collective bargaining agreement.
For objective dismissals (based on economic, technical, organizational, or production reasons), a minimum notice period is generally mandated by law.
| Type of Termination | Minimum Notice Period | Notes |
|---|---|---|
| Objective Dismissal | 15 days | Must be given in writing simultaneously with the dismissal letter. |
| Disciplinary Dismissal | None | Termination is effective immediately upon delivery of the letter. |
| Termination during trial period | None | Unless otherwise agreed in writing or by collective agreement. |
| Voluntary Resignation | As per contract/CBA | Typically 15 days, but varies significantly by sector and agreement. |
It is crucial to consult the relevant collective bargaining agreement, as these often stipulate longer notice periods than the statutory minimum for objective dismissals or voluntary resignations. If the employer fails to provide the required notice period for an objective dismissal, they must pay the employee compensation equivalent to the salary for the missing days.
Severance Pay Calculations and Entitlements
Severance pay (indemnización) in Spain is typically linked to the type of termination and whether it is deemed fair or unfair by a court. The calculation is based on the employee's length of service and their daily salary.
| Type of Termination | Severance Calculation | Maximum Cap |
|---|---|---|
| Objective Dismissal | 20 days' salary per year of service | 12 months' salary |
| Disciplinary Dismissal | None (if deemed fair) | N/A |
| Unfair Dismissal | 33 days' salary per year of service (for service after Feb 12, 2012) | 24 months' salary |
| 45 days' salary per year of service (for service before Feb 12, 2012) | 42 months' salary | |
| Collective Dismissal | Minimum 20 days' salary per year of service | 12 months' salary |
The daily salary calculation should include all salary components, including prorated bonuses and extra payments. For service periods that are less than a full year, severance is calculated proportionally. The maximum caps apply to the total severance amount.
It is important to note that if a disciplinary dismissal is challenged by the employee and subsequently declared unfair by a court, the employer typically has the option to either reinstate the employee or pay the higher severance amount corresponding to unfair dismissal.
Grounds for Termination
Spanish law specifies the valid grounds upon which an employer can terminate an employment contract. These are broadly categorized as disciplinary or objective.
- Disciplinary Dismissal: Based on serious and culpable breach of contract by the employee. Examples include:
- Repeated and unjustified absences or lateness.
- Insubordination or disobedience.
- Verbal or physical offenses against the employer, colleagues, or family members.
- Breach of contractual good faith or abuse of trust.
- Persistent decrease in performance.
- Habitual drunkenness or drug addiction affecting work performance.
- Harassment based on origin, race, religion, disability, age, sexual orientation, or sexual harassment.
- Objective Dismissal: Based on reasons related to the functioning of the business or the employee's capabilities, not the employee's fault. Examples include:
- Economic, technical, organizational, or production reasons (ETOP reasons).
- Employee's lack of competence to perform the job.
- Employee's failure to adapt to technical modifications in the job.
- Justified absences exceeding a certain threshold (though this ground is complex and rarely used due to legal challenges).
Termination without a valid legal ground, or failure to follow the correct procedure, will likely result in the dismissal being declared unfair.
Procedural Requirements for Lawful Termination
Strict adherence to procedural requirements is paramount in Spain. Any deviation can render an otherwise justified dismissal unfair.
| Step | Requirement | Notes |
|---|---|---|
| Written Communication | Mandatory written dismissal letter (carta de despido). | Must be delivered to the employee. |
| Content of Letter | Must clearly state the specific grounds for termination and provide a detailed, specific, and clear description of the facts supporting the grounds. | Vague or generic descriptions are insufficient. Must include effective date of termination. |
| Delivery of Letter | Must be delivered in a way that proves receipt (e.g., burofax, hand delivery with employee signature). | If employee refuses to sign, it should be delivered before witnesses or via burofax. |
| Notice Period (Objective) | For objective dismissal, 15 days' written notice must be given simultaneously with the dismissal letter. | If notice is not given, compensation in lieu of notice must be paid. |
| Severance Payment (Objective) | For objective dismissal, severance (20 days/year) must be made available to the employee at the time of delivery of the dismissal letter. | Failure to do so makes the dismissal procedurally unfair, though it can be corrected later. |
| Employee Representation | If the employee is a legal representative of workers (e.g., union delegate), specific additional procedures and consultations may apply. | Failure to follow these procedures is a common pitfall. |
For disciplinary dismissals, the letter must detail the specific acts of misconduct, including dates and circumstances. There is no notice period or requirement to pay severance at the time of dismissal for disciplinary cases.
Employee Protections Against Wrongful Dismissal
Employees in Spain have strong protections against unfair dismissal. If an employee believes their termination was unlawful, they can challenge it through a formal process.
- Conciliation: The employee must first file a conciliation request with the relevant labor authorities (Servicio de Mediación, Arbitraje y Conciliación - SMAC) within 20 working days of the termination date. A mandatory conciliation hearing is scheduled to attempt a settlement.
- Labor Court: If conciliation fails, the employee can file a claim with the Labor Court (Juzgado de lo Social) within the same 20-working-day period (the conciliation process pauses the clock).
The court will examine both the substantive grounds for dismissal and the procedural compliance. The court can declare the dismissal:
- Fair (Procedente): The employer proved the grounds and followed the procedure. The termination is valid.
- Unfair (Improcedente): The employer failed to prove the grounds or did not follow the correct procedure. The employer must choose within 5 days between:
- Reinstating the employee to their previous position with back pay.
- Paying the employee the statutory severance for unfair dismissal (33 days/year, capped at 24 months).
- Null and Void (Nulo): The dismissal violated fundamental rights or was based on discriminatory grounds (e.g., pregnancy, exercising union rights). The employee must be immediately reinstated with back pay, and the employer may face additional penalties.
Common pitfalls leading to unfair dismissal include insufficient detail in the dismissal letter, failure to prove the alleged facts, procedural errors (like incorrect notice or failure to make severance available for objective dismissal), and terminating employees during protected periods without specific, non-discriminatory grounds.
