What to Do When a Dismissal is Judicially Declared as Unfair in Spain?

The concept of unfair dismissal in the Spanish Workers’ Statute (Estatuto de los Trabajadores) has changed after the labor reform of February 2012.

Presently, an employer does not have to recognize the unfairness of a dismissal.  If a dismissal does not rest on any of the causes that the law establishes and the employer provides the employee with the adequate compensation, an unfair dismissal has taken place.

As provided in Article 56 of the Workers’ Statute, the current compensation required for an unfair dismissal is 33 days per year worked for contracts entered into after February 12, 2012.  The cap on this compensation is a total of 24 months.

According to the Transitional Provision Five of the Act 3/2012 of July 6, on Urgent Measures for Labor Market Reform, for those contracts concluded before the above date, the compensation is calculated from the employee’s start date until February 12, 2012 where the compensation payable is equivalent to 45 days per year worked.  However, as of February 12, 2012 until the date of dismissal, the calculation rate of the compensation is 33 days per year worked.

The table below clarifies the compensation and number of days per year for which the dismissed employee receives the compensation:

Hiring Date

Number of Days of Compensation

Limit of Months (Cumulative Cap)

February 12, 2012

33

24

Before February 12, 2012

45 (until February 12, 2012)  and 33

If before February 12, 2012 more than 720 days have been completed (24 months), then the maximum compensation amount will apply; but in no case shall the total compensation exceed 42 months.
Therefore, the calculation rate is 45 days per year counting until February 12, 2012, not considering anything after this date for 45 days.After this date, the calculation rate must be 33 days.

Before February 12, 2012

45 (until February 12, 2012) and 33

If the employee has not completed 720 days before February 12, 2012,
the compensation will be for 24 monthly payments.

There are cases in which an employer may conduct a dismissal that is not unfair; for example, an employer may conduct a dismissal for objective reasons or for disciplinary dismissal.  However, the employer runs the risk that if the employee takes this dismissal to court and reaches a judicial proceeding, the judge may consider the dismissal unfair.

In such cases, Article 56 of the Workers’ Statute provides for two options that the employer must adopt within a maximum period of five days from the date of notification of the judicial resolution declaring the unfair dismissal.

These two options are:

  • To reinstate the employee: the employee has the right in this case to the employer’s paying the salaries that the employee has not received during the procedure (except for special cases).  These salaries shall be computed from the date of dismissal until the date of notification of the judicial resolution.
  • Not to reinstate the employee: in this case, the employer must pay the employee the compensation corresponding to 33 days per year (if the hiring occurred after February 12, 2012)

If the employer appeals the decision of the unfair dismissal, the employer must provide a consignment of 500.00 Euros plus a 0.5% of the principal (these amounts by way of court fees). Furthermore, the employer must also transfer into the court’s account the amount that the judgment has declared be paid to the employee.  This is the amount involved in the appeal.  This transfer of funds into the court’s account is an employer obligation under Article 230 of the Social Jurisdiction Act (LJS).

Articles 190 and those articles immediately following in the LJS regulate the employer’s decision to file an appeal of a court’s decision over payment to the unfairly dismissed employee.  The employer’s decision to file an appeal does not imply a tacit choice for compensation.

The Judgment of the High Court of the Basque Country dated February 18, 2003 states, If five days have passed from the notification of the decision declaring the dismissal unlawful without determining the issue of reinstatement or compensation, this situation legally means that the readmission of the employee must occur according to Article 56.2 and 3 of the Workers’ Statute.

Therefore, an employer must notify the court within five days from the notification of the judicial resolution of its decision to opt for compensation.  If this is the case, then there shall be no readmission of the employee.  In summary, the employer’s defaulting on its obligation to notify the court within the five-day notice period means that the employer must readmit the employee to the company.  This situation leaves the employer liable for those wages that the employee has not received during the judicial process from the date of dismissal until the date of the notification of the judicial resolution.

This article is not considered as legal advice

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