Losing a job is one of the most stressful situations for workers, especially if the reason for dismissal is not justified. Fortunately, Spanish labor law and, specifically, The Workers’ Statute establishes a series of rights that companies must respect, including severance pay.
The severance payaccording to labor law, is a financial amount offered to the worker in the event of early termination of their contract. This termination of the contract may be due to a unilateral decision of the employer caused by external causes to the conduct of the worker, that is, economic, technical or production issues, among others. In these cases, as established by Spanish law, the compensation will be 20 days per year worked.
However, this figure will be significantly higher in the case of those considered unfair dismissals. These occur when the termination of the contract does not comply with the law, that is, it is due to an unjustified cause and cannot be proven before a judge. Due to this, article 56.1 of the Workers’ Statute obliges the employer to reinstate the employee in his or her job or pay compensation.
How to calculate compensation for unfair dismissal
In the case of paying compensation, this must be made within a period of five days from the notification of the sentence and the amount will be equivalent to 33 days per year worked, “periods of time less than one year being prorated by months, up to a maximum of 24 monthly payments“, as established in article 56.1 of the Workers’ Statute, provided that their seniority began after February 12, 2012.
When the worker has an antiquity prior to February 11, 2012this must be calculated based on the law established for each section. For each year prior to said date you will have the right to 45 days per year, with a maximum of 42 monthly payments; while subsequent years will be calculated as in the previous case, with 33 days for each one.
To calculate the exact amount for each case, you must use full annual gross salarytaking into account both the base salary and the fixed complements and non-prorated extraordinary payments. This figure must be divided by 365 days. While those whose work period has not reached one year, it must be prorated by months.
How to appeal a dismissal before the Court, according to labor law
Likewise, it should be taken into account that compensation is exempt from personal income tax up to the limit of the mandatory amount set by the Statute, that is, up to 180,000 eurosand whenever there is a court ruling that declares the inadmissibility or has been recognized in a conciliation act before the Mediation, Arbitration and Conciliation Service (SMAC). If this figure is exceeded, it must be taxed in the income tax return as income from work.
The deadline to be able to claim or sue the company for an unfair dismissal is 20 business days from the unilateral termination of the contract, without counting Saturdays, Sundays or holidays. To do this, a mandatory conciliation request must be submitted to the corresponding mediation service. If a conciliation agreement is not reached, the worker may sue in the Social Court.
On the other hand, if the company decides reinstate the worker, must pay the so-called processing salaries. As established by article 56.2 of the Workers’ Statute, “these will be equivalent to an amount equal to the sum of the wages not received from the date of dismissal until the notification of the ruling declaring the inadmissibility or until another job had been found, if such placement was prior to said ruling.”