Sources of regulation
The main sources of law for termination of employment in Spain are
the Workers’ Charter, [1] Royal Decree 2546/1994 of 29 December on
recruitment, and Royal Legislative Decree 2/1995, which adopts the text which
is recast in the Labour Procedure Act (LPA). In addition, art. 35 of
the Spanish Constitution states that “all Spaniards have the duty to work
and the right to work, to the free selection of their profession or office
career, to advancement through work and to sufficient remuneration to satisfy
their needs and those of their family, while in no case can there be discrimination
for reasons of sex”. Some collective agreements also deal with this subject.
In 1985, Spain ratified
the ILO Termination of Employment Convention, 1982 (No. 158).
Scope of legislation
Labour legislation is to be applied to work done by Spanish
workers hired in Spain and in Spanish
undertakings in a foreign country.
The Workers’ Charter is applied to workers who voluntarily
provide remunerated services for another person and within the scope of organization
and management of the other physical or legal person called the employer
or entrepreneur. The following categories of workers and work are excluded
from the scope of the law:
- staff
in the service of the State, local government and autonomous public entities
governed by other legislation;
- mandatory
civil or community service;
- activity
limited to the mere discharge of the duty of an adviser or member of the
governing bodies of corporations where this activity entails the execution
of tasks inherent in such duties;
- work
carried out in the name of friendship, benevolence or good neighbourliness;
- family
work, except if it is demonstrated that the persons doing the work have
the status of wage earners; and
- the
persons who are involved in trading operations on behalf of one or more
employers, if they are personally responsible for the successful completion
of the transaction
and assume the risk of profit and loss.
Contracts of employment
A contract of employment is one in which a person provides
service on behalf of and within the context of the organization and direction
of another in exchange for pay. The employment contract may be concluded
in writing or orally (sec. 8, Workers’ Charter).
Contracts for a specified period over four weeks must be
made in writing (sec. 8(2), Workers’ Charter).
The employment contract may
be concluded for an indeterminate or specific period (sec. 15(1),[2] Workers’
Charter). Fixed-term contracts can be concluded only in the following
cases:
- When
worker is hired to conclude a specific project or service, which is considered
to be autonomous yet within the normal business activities of the employer
and whose execution, although limited in the time, is in principle of unknown
duration.
- When
business demands are high and resources are stretched or there is backlog,
even though the work maybe within the normal line of business of the employer. In
such cases, contracts can be concluded for a maximum of 6 months within a
twelve-month period. In some cases, the maximum length can be up to 18
months if worker’s union agreement so stipulates;
- When
the contractor substitutes a worker entitled to return to work after leave
(the name of the person being substituted and the reasons for temporary
replacement must always be included in the contract)[3].
Sec. 14 of the Workers’ Charter provides for the
possibility of written agreement on a probation period, the duration of which
may not exceed six months for skilled technicians, or two months for other
workers. In enterprises employing fewer than 25 workers the probation period
may not exceed three months for workers who are not skilled technicians.
Termination of employment
Pursuant to sec. 49 of the Workers’ Charter, the
employment contract may terminate, not at the employer’s initiative, for
the following reasons:
- by
mutual agreement of the parties;
- force
majeure which puts a definitive end to the provision of the service;
- the
expiration of the agreed term of the contract or the completion of the
task or service for which the contract was concluded;
- resignation
by the worker, upon the submission of notice provided for in the applicable
collective agreements or by local practice;
- because
of the death or serious or permanent total disability of the worker;
- retirement
of the worker;
- death,
retirement or incapacity of the employer, or the extinction of the legal
personality of the contracting party;
- by
the worker, because of contractual non-performance by the employer; or
- by
decision of a female worker that feels obliged to leave her job as a
consequence of being a victim of gender violence.[4]
Sec.50 of
Workers’ Charter deals with termination of a contract by will of the worker. The
following are the instances prescribed:
- Substantial
modifications of working conditions, which affect the worker’s vocational
training or dignity;
- Lack
of payment or continued delays in the guarantee of the negotiated salary;
and
- Any
other serious breach of the employer’s obligations, apart from force
majeure.
If the grounds are approved by the
Social Affairs Court Judge, the worker is entitled to compensation as if
it were an unjustified dismissal.
In accordance with sec. 14(2) of the Workers’ Charter,
during the probation period either party may end the employment relationship.
Dismissal
The employment contract may be terminated because of the
following valid reasons (sec. 52, Workers’ Charter):
- the
inaptitude of the worker which is known or later demonstrated, after his
or her actual placement in the enterprise. Existing inaptitude observed
before the completion of a probation period may not be alleged after such
completion;
- the
worker’s failure to adapt to the technical modification of his or her job,
if such changes are reasonable and have occurred after a minimum of two
months from the introduction of the modification;
- the
existence of an objectively substantiated need to fill posts for any of
the reasons specified in sec. 51 (discussed below);
- absence
from work, even justified but intermittent, which amounts to 20 per cent
of the working days in two consecutive months, or 25 per cent in four discontinuous
months within a period of 12 months, if the rate of absenteeism of the
total workforce exceeds 5 per cent during the same periods. However, the
following
will not be considered as absenteeism: legal strikes, employees’ representative
activities, labour accidents, maternity leave, vacations, temporary absence
from work of more than 20 consecutives days due to sickness or non-employment-related
accidents, and/or physical or psychological situation due to gender violence;[5] and
- when
in indefinite-term contracts arranged directly by public authorities or
not-for-profit entities to implement certain public plans and programs,
the projects are
unable to continue due to insufficient budgetary appropriations.[6]
The employment contract may be terminated by the employer
through dismissal based on serious and culpable non-performance on the part
of the worker (disciplinary dismissal). The following are considered non-performance
of contractual obligations (sec. 54, Workers’ Charter):
- repeated
and unjustified absence or lateness in the workplace;
- indiscipline
or disobedience at work;
- verbal
or physical offences against the employer or persons employed in the enterprise
or the family living with them;
- violation
of contractual goodwill, and abuse of confidence in the discharge of duties;
- continued
and voluntary reduction of normal or agreed output;
- habitual
drunkenness or drug addiction if it adversely affects the worker’s work;
and
- harassment
based on race or ethnic origin, religious beliefs or conviction, disability,
age or sexual orientation against the employer or other persons working
at the company.[7]
Collective dismissal is classified as the termination of
employment contracts based on economic, technical, organizational or productive
reasons within a period of 90 days, which affects
at least (sec. 51, Workers’ Charter):
- ten
workers, in enterprises which employ fewer than 100 workers;
- 10
per cent of the number of workers in enterprises which employ between 100
and 300 workers; or
- 30
workers in enterprises which employ more than 300 workers.
The termination of employment contracts of the undertaking’s
entire workforce of five or more workers is also considered a collective
dismissal.
In Spain, the anti-discrimination
provisions of the Workers’ Charter prohibit termination of employment on
the basis of sex, ethnic origin, marital status, race, social status, religious
or political beliefs, membership or non-membership of a trade union, or language
(secs. 4(2) and 17(1), Workers’ Charter). To this is added protection
contained in the Act on Social Integration of the Disabled (No. 12/1982 of
31 March 1982), which extends this protection to disability status. Any termination
of employment based on the above-mentioned grounds is considered to be null
and void. In addition, a termination is null in the following cases: pregnant
workers during the period of suspension of the contract due to maternity,
risk during pregnancy, or breast-feeding leave; adoption or fostering; family
leave to care for children or handicapped persons; and in certain circumstances
female workers who have been victim of gender violence.[8] The
worker may be reinstated or paid his or her wages indefinitely, including
continued coverage by the social security system (sec. 12, LPA), without
prejudice to other possible civil liability to which the employer may be
subject.
Notice and prior procedural safeguards
Termination of the employment contract for objective reasons
requires the observance of the following criteria (sec. 53(1), Workers’
Charter):
- written
communication to be given to the worker explaining the reason;
- payment
to made to the worker, at the same time at which the written communication
is handed over, of compensation corresponding to 20 days for each year
of service (periods of time under one year are to be prorated by months),
up
to a maximum sum of 12 months’ pay; and
- granting
to the worker a 30-day notice period.
In the case of termination of employment for misconduct,
the dismissal must be notified in writing to the worker, stating the facts
justifying the dismissal and indicating the date on which the employment
relationship will end (sec. 55(1), Workers’ Charter).
If the worker is a workers’ legal representative or a trade
union representative, there will be formal adversarial procedures during
which the worker concerned, and other members of the union to which he or
she belongs, may be heard. If the worker happens to be a member of a trade
union and the employer is aware of this fact, representatives of the corresponding
trade union must be heard in advance.
An employer who intends to carry out collective dismissals
must request permission from the competent labour authority and at the same
time must consult the legal representative of the workers. The communication
to the labour authority and to the legal representatives must be accompanied
by all the necessary documentation justifying the reasons for the dismissal
and the measures which are to be adopted, in the terms prescribed by regulation.
Once the request has been received by the labour authority, it will ascertain
whether the request fulfils the necessary requirements, and if it does not,
the employer must rectify the situation within ten days (sec. 51(2) and
(3), Workers’ Charter). Consultation with the legal representatives of
the workers should last not less than 30 calendar days, or a fortnight in
the case of enterprises employing fewer than 50 workers (sec. 51(4),
Workers’ Charter). At the end of the process of consultation, the employer
must communicate to the labour authority the outcome of the deliberations.
If there is an agreement between the parties, the labour authority must hand
down a decision within a fortnight. However, if the labour authority determines, ex
officio or at the request of the party concerned, the commission of fraud,
damage, coercion or abuse of law in the conclusion of the agreement, it will
submit its decision to the judicial authority, with a suspension of the time
limit to make the decision (sec. 51(5), Workers’ Charter). In the
event that the period of consultation is concluded without agreement, the
labour authority must hand down a decision within a period of 15 calendar
days. The decision of the labour authority must be justified and compatible
with the wishes of the enterprise (sec. 51(6), Workers’ Charter).
Severance pay
Workers dismissed for valid reasons receive compensation
of 20 days’ wages for each year of service, up to a maximum sum of 12 months’
pay (for periods of service under a year, this is prorated by the number
of months of service) (sec. 53(1)(b), Workers’ Charter).
Workers who are unlawfully dismissed receive compensation
of 45 days’ wages for each year of service, up to a maximum of 42 months’
pay (for periods under a year, this is prorated by the number of months of
service). Compensation will also be awarded for the sum of the outstanding
wages from the date of dismissal up to notification of the decision that
the dismissal was unlawful or until the worker has found alternative employment
if such placement took place before the decision was handed down. If the
employer acknowledges that the dismissal was unjustified and places a deposit
(equivalent to the statutory severance and salaries) at the relevant Labour
Court, compensation will be from the date of dismissal until the date deposit,
provided that he/she informs the dismissed worker of the deposit. However,
if the deposit is made at Court within 48 hours after the dismissal, no salaries
will accrue during the proceeding (sec. 56(1)(a) and (b), (2) Workers’
Charter).[9]
The employer can claim to the State payment of the outstanding
wages referred to in sec. 56 (1) (b), when the Court took longer than sixty
working days to make a decision. The sum claim will correspond to the time
exceeded beyond the sixty working days.[10]
Collective dismissal leads to severance payments equal to
compensation of 20 days’ wages for each year of service, up to a maximum
of 12 months’ pay (for periods of under a year, this is prorated by the number
of months of service) (sec. 51(8), Workers’ Charter). In undertakings
employing fewer than 25 workers, the Wage Guarantee Fund must pay 40 per
cent of the legal compensation due to the workers (sec. 33(8), Workers’
Charter).
In the case of termination of fixed-term contracts (sec.
49 (1)(c)), the worker is entitled to receive severance equal to 8
days’ salary per year worked.[11] This does not apply to workers contracted to
substitute employees entitled to return to their job or apprentice contracts.
Avenues for redress
In the event of dismissal the possible channels of recourse
which may be made before the labour court are: appeal, cassation and review.
The time limit for appeal is 20 working days for both disciplinary dismissal
and dismissal for objective reasons (secs. 103 and 121, LPA).
If the employer does not fulfil the requirements established
under sec. 53(1), the decision to terminate employment will be declared null
and void,[12] and the employer will be instructed to
pay the worker, according to the provisions applicable in the event of disciplinary
dismissal (sec. 53(4), Workers’ Charter). The wages due during the
period of deliberations may not be deducted from the wages corresponding
to the notice period (sec. 123(2), LPA).
If dismissal is declared unlawful, within a period of five
days from the notification of the decision, the employer must make a choice
between the reinstatement of the worker and payment of a sum of money.[13] Electing compensation is only an option
if the person dismissed was a workers’ legal representative or a union representative.
By not exercising this option, it will be taken that reinstatement has been
chosen. Whenever the option, expressed or presumed, is exercised in favour
of reinstatement, it will be legally binding (sec. 56(4), Workers’
Charter).
If dismissal is carried out in a manner which does not comply
with the provisions of sec. 55(1) of the Workers’ Charter, the employer
may renew the dismissal complying with the requirements omitted in the previous
case, within 20 consecutive days of the initial dismissal (sec. 55(2),
(5) and (6), Workers’ Charter).
A dismissal which fails to observe the rules of procedure
will be declared null and void. In the case of annulment, the decision will
be in favour of the immediate reinstatement of the worker with payment of
outstanding wages (sec. 113, LPA).
The judicial body, ex officio or at the request of
the party concerned, will declare null and void the agreement taken by the
employer to effect collective dismissal for economic, technical, organizational
or productive reasons, force majeure or extinction of the legal personality
of the employer if prior administrative authorization has not been obtained
(sec. 124, LPA). In such cases the ruling will be determined by sec.
113 of the LPA, namely, reinstatement of the worker with payment of outstanding
wages.
Further information
[1] Royal Legislative Decree
1/1995 of 24 March 1995.
[2] Sec.15 (1) amended by Act 12/2001 of 9
July 2001 on Urgent Measures Reforming the Job Market in Order to Increase
and Improve the Quality of Employment
[3] This
exception was abrogated by the Royal Legislative Decree 5/2006 of 9 June.
[4] Organic Law 1/2004 of 28 December 2004 on Measures
of Integral Protection against Gender Violence
[5] Sec.52 (d) of Workers’ Charter modified on Organic
Law 1/2004 of 28 December 2004
[6] Act 12/2001 of 9 July 2001
[7] Inclusion of literal g on Sec. 54 (2) by Act
62/2003 of 30 December 2003.
[8] Sec. 55(5)(b), included by Organic law 1/2004
of 28 December 2004 on Measures of Integral Protection against Gender Violence.
[9] Sec.56 (1) and (2) amended by Act 45/2002 of 12
December 2002.
[10] Act 45/2002 of 12 December 2002, Sec. 57.
[11] Act 12/2001 of 9 July 2001 on Urgent Measures
Reforming the Job Market in Order to Increase and Improve the Quality of
Employment.
[12] Failure to give notice will not annul the termination,
but the employer will be obliged to pay wages corresponding to the period
in question.
[13] See sec. 56(1)(a) and (b) of the Workers’ Charter
as discussed above.
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