Redundancy management and current legislation in Spain
The redundancy management is one of the most important procedures that a company faces. Adjusting each decision to the current spanish legislation is very important to avoid harmful consequences for the company, in Asesoría Orihuela Costa we offer a comprehensive consultancy service for companies, which includes the management of dismissals.
Dismissal legislation in Spain
Redundancy legislation in Spain is mainly regulated by the Workers’ rights, although there are also other regulations and case law that influence the interpretation and application of the rules. In the following, we provide an overview of the management of dismissals in general.
Types of redundancies
- Disciplinary dismissal: Disciplinary dismissal is that which occurs due to a serious and culpable breach by the employee. The causes may be varied, including lack of attendance or punctuality, indiscipline, verbal offences, reduced performance, among others.
- Objective dismissal: This occurs for economic, technical, organisational or production reasons. For example, when a company is going through a negative economic situation that justifies the reduction of personnel.
- Collective dismissal: This occurs when, in a period of 90 days, the termination affects at least 10 workers in companies with less than 100 workers; 10% in companies with between 100 and 300 workers; or 30 workers in companies with more than 300 workers.
Indemnities
In disciplinary dismissal, if the dismissal is declared unfair, compensation is 33 days per year worked, with a maximum of 24 monthly payments.
In objective dismissal, the compensation is 20 days per year worked, with a maximum of 12 monthly payments.
Redundancy procedure
The process varies according to the type of dismissal.
- Disciplinary: The company informs the employee of the dismissal decision in writing, stating the cause. If the worker does not agree, he/she can challenge the dismissal in court.
- Objective: It must be communicated in writing to the worker, indicating the cause and granting compensation. In addition, 15 days’ notice is given.
- Collective: Requires a consultation period between the company and the workers’ representatives. The reasons for dismissal must be communicated and the specific documentation requested must be provided. If no agreement is reached, the company can proceed with the dismissal, but workers can contest it.
Invalid and unfair dismissal
A dismissal is null and void if it is based on discriminatory principles or violates fundamental rights. In this case, the worker has the right to be reinstated and to receive the lost wages.
A dismissal is unfair if it is not properly justified, or if the correct procedure is not followed. The company has the option to reinstate the worker or pay compensation.
Employment law in Spain
It is important to mention that, since the 2012 labour reform, significant changes have been introduced in the regulation of dismissals, seeking to offer more flexibility to companies and to adapt the regulations to the economic and labour reality of the country. When it comes to dismissals in Spain, it is essential to keep up to date with the regulations and case law, as the interpretation and application of the rules may vary depending on the economic, social and political context of the country.
Redundancy notice
In Spain, redundancy notice is given in the form of a redundancy letter , which must be delivered to the employee concerned. This letter is a formal document that has a series of requirements that must be fulfilled for the process to be carried out correctly and legally:
- Identification: The letter must clearly specify the identity of the company and the affected worker.
- Cause of dismissal: It is essential that the reason or causes justifying the dismissal are detailed, whether for disciplinary or objective reasons, or any other cause provided for in labour legislation.
- Effective date: The date on which the dismissal becomes effective must be clearly mentioned.
Information on severance pay: If severance pay is due, the letter should specify the total amount and how it is calculated. - Employee’s rights: It is advisable to inform the employee of his or her right to contest the dismissal and any other rights that may be related to the termination of his or her contract.
It is advisable to hand-deliver this letter to ensure that the employee has received it; in some cases, the employee may be required to sign an acknowledgement of receipt. It is essential to keep a copy for any future legal eventuality.
The legal process in the event of a redundancy claim
In Spain, in the case of a redundancy claim, the conditions and legality of the dismissal are decided by the Social Courts.
If a worker considers that his or her dismissal was unfair or null and void, he or she can file a lawsuit in these courts. The process begins with an act of conciliation before the Mediation, Arbitration and Conciliation Service (SMAC), where an attempt is made to reach an agreement between the worker and the employer. If no agreement is reached, the case is brought to trial in the Social Court. It is the judge who, after evaluating the evidence and arguments presented by both parties, decides whether or not the dismissal is justified and establishes the corresponding compensation if necessary.
If either party does not agree with the judgement, they can appeal to the High Court of Justice of the respective Autonomous Community and, ultimately, to the Supreme Court.
At Asesoría Orihuela Costa we offer you the legal support that you need for any redundancy consultation related to dismissals and sick leave. If you want to protect the interests of your company, contact our legal team.
