Unfair Dismissal in Spain: What Expats Need to Know (Advice from an Employment Lawyer)

Unfair Dismissal in Spain: What Expats Need to Know (Advice from an Employment Lawyer)

Losing a job is stressful for anyone, and it can be even more confusing if you’re an expat navigating Spanish labor laws for the first time. If you believe you’ve been unfairly dismissed (despido improcedente) or are facing a layoff, it’s important to understand your rights under Spanish law. In this article, our employment lawyer explains the basics of dismissals in Spain, the compensation you might be entitled to, and the steps you should take if you’re let go from your job.

Types of Dismissal in Spain

Spanish law recognizes several forms of employment termination:

• Disciplinary Dismissal: Occurs when an employer fires an employee for serious misconduct or breach of contract (e.g., repeated absences, violation of company rules). If justified, no severance is owed beyond last pay and accrued vacation. If the misconduct isn’t proven or the procedure isn’t followed, it may be deemed unfair.
• Objective Dismissal: Used for reasons like economic difficulties of the company, redundancy due to reorganisation, or the employee’s inability to perform the job (e.g., lack of adaptation or frequent illness affecting work). It requires a written notice citing concrete reasons and a severance of 20 days’ salary per year of service (capped at 12 months’ pay). If these reasons are not valid or well-proven, the dismissal can be ruled unfair.
• Collective Redundancy (ERE): A large-scale layoff (if the company cuts a significant percentage of staff within 90 days). This involves a consultation process with employee representatives. For the individual, the result is similar to objective dismissal in terms of compensation.
• End of Contract: If you were on a temporary or fixed-term contract, it ends when the term or project finishes. In many cases, employees are entitled to a finiquito (settlement) including about 12 days’ pay per year of service as an end-of-contract compensation.

Fair vs. Unfair vs. Null Dismissal

• Fair Dismissal (Procedente): The employer had valid grounds and followed the correct procedure. Depending on type, you either get no compensation (disciplinary) or the statutory amount (objective).
• Unfair Dismissal (Improcedente): The dismissal lacked a fair cause or the employer violated procedure. For example, firing someone without a valid reason or without the required notice and severance on an objective dismissal. In such cases, if you challenge it in court, the employer can be ordered either to reinstate you or to pay increased compensation.
• Null Dismissal (Nulo): A dismissal is declared null in special cases – typically if it was based on illegal discrimination or violated fundamental rights (e.g., firing a woman for being pregnant, or an employee while on certain types of leave). A null dismissal means automatic reinstatement and back pay for the employee.

What Compensation Can You Get?

If you win an unfair dismissal claim, the default compensation is usually 33 days of salary per year of service (and 45 days/year for years worked before a 2012 legal reform, if applicable), capped at 24 months’ pay. This is higher than the 20 days/year for objective layoffs. The exact calculation can be complex, but essentially:

• Time worked from 2012 onward accrues at 33 days/year.
• Time before 2012 (if any) at 45 days/year.
• The total is limited to 24 months’ salary.

For instance, if you worked 3 years and were earning €2,000/month, an unfair dismissal compensation might be around €6,000-6,500 (depending on precise days counted and any prior periods at 45 days rate). Our lawyer can calculate the precise figure for your case.

Remember, if a dismissal is ruled null, you get your job back as if never fired (plus wages for the interim), so standard severance doesn’t apply unless you negotiate leaving.

Steps to Take if You’re Dismissed

1. Request Your “Carta de Despido”: This is the written termination letter. It should state the reason for dismissal and the effective date. In objective dismissals, it should also include the offer of the 20 days/year severance payment. Keep this document.
2. Finiquito (Settlement) Review: Upon leaving, you should receive a finiquito – a settlement paper that includes outstanding salary, unused vacation days, and proportional extra pay (pagas extras). Do not hastily sign it if you disagree with anything. You can sign as “received but not agreeable” (no conforme).
3. Consult a Lawyer Quickly: There are strict deadlines to act. In Spain, you generally have only 20 business days from the date of dismissal to file a claim for unfair dismissal. We can evaluate if the reasons given hold up or if procedures (like notice periods or consultation) were breached.
4. Attempt Conciliation (SMAC): The first step in a legal challenge is a conciliation meeting at a mediation service (SMAC). Often, employers may offer a settlement at this stage if they sense the case is not in their favour. Your lawyer will represent you to negotiate the best deal, perhaps an improved severance.
5. Court Claim: If no agreement is reached in conciliation, the case goes to labor court. A judge will eventually decide if the dismissal was fair, unfair, or null. Most cases end in compensation if the employee is in the right, as reinstatement is rarely chosen by employers unless legally compelled.

Conclusion

Facing a dismissal as an expat can be daunting, but Spanish labor law does offer strong protections against unfair termination. The key is to act promptly and get professional advice to enforce your rights. If you suspect your firing was unjustified or handled incorrectly, contact our employment lawyer at Expat & Legal Spain. We will review your case, help you understand your entitlements, and fight for the compensation or reinstatement you deserve. Remember, you don’t have to navigate this process alone – we’re here to advocate for you.

Sandra Márquez

CEO & Lawyer, Expat & Legal Spain