Instalments of compensation payment of severance pay in Spain

Many businesses, when it comes time to communicate the dismissal of some of its workers, are facing economic difficulties and have serious difficulty paying the compensation for 20 days per year worked currently in force in Spain.

For this reason, for both individual and collective dismissals, a company has the option to spread out the compensation payment through an agreement with the workers’ representative, provided the following conditions are met:

  • The company claims economic reasons as the cause for the dismissal
  • At the time of the notice of the dismissal, the company does not have liquidity
  • The instalments of compensation is not disproportionate or unfair to the worker.

If an agreement is reached, workers affected by the dismissal will receive full compensation in four instalments within nine months from the effective date of the dismissal.

This article is not considered as legal advice

Mariscal Abogados

Mariscal Abogados is an international and multidisciplinary law firm with proven experience in diverse areas of the Law. Our working languages are English, German, French and Spanish. For any further enquiries please Contact us