Gimenez Torres Abogados | Ventura Garces

Forums For Adjudicating Employment Disputes

There are four Labour Courts: First Instance Court, Appeal Court, High Court and Supreme Court. Then there is also the Constitutional Court, which is only allowed for those cases whether fundamental rights have been violated.

The Main Sources Of Employment Law

The basic law are the EU Laws, the Constitution, International Treaties, Worker’s Statute Act and subsequently the Collective Agreements, general principles of law, the individual contract, the customs of every specific profession and the local practice. Additionally, there are Social Security, administrative and Telework Legislation which must be observed (especially with the Covid-19 pandemic).

National Law And Employees Working For Foreign Companies

National law will apply when the employee is hired in Spain, regardless of his/her nationality, except when the employee is from an EU country and the employer has posted him/her to Spain, in which case it is necessary to observe EU law also. Employers must guarantee those employees temporarily posted to Spain the minimum working conditions in force in Spain, irrespective of the legislation applicable to the employment contract. The employer must notify the relevant Spanish Labour Authorities of the transfer, giving them the following information:

  • Identification of the employer
  • Personal and professional data of the transferred employee
  • Identification of the company/companies where the posted employee will provide his/her services
  • Initial date and planned duration of the employee’s transfer
  • Kind of services to be provided by the employee and type of transfer

National Law And Employees Of National Companies Working In Another Jurisdiction

National Law will apply and the employer must ensure that the employee posted abroad enjoys the minimum working conditions established by the Spanish legislation. These conditions may be improved by the application of the rules governing the employment contract. The referred conditions may differ depending on the fact that the employee has been hired in Spain and then posted abroad or the Spanish employer has hired the employee in the country where he/she will develop his/her services.

Data privacy

The employer must collect some personal and professional data of the employee in order to submit it to the Labour and Social Security authorities. Moreover, it is possible that the employer must surrender the employee personal data to other companies to fulfil the National Health and Safety law and also to their consultant in order to make the employee's payrolls.

In any case, the employer must ensure they comply with the National Law Protection of Personal Data and digital guarantees and EU law General Data Protection Regulation.

Legal Requirements As To The Form Of Agreement

The employment contract can be established either in writing or verbally. Employment contracts should be drawn up in writing, when the statutory provisions so require, and always in the following cases: work practice contracts, training contracts, part-time contracts, fixed-discontinuous contracts, senior management contracts, housework contracts, insertion contracts, the new contracts established by the recent modification of some labour Acts, for promoting indefinite contracts and finally, in cases of employees hired in Spain to provide services for Spanish companies abroad. Likewise, contracts for a fixed period with a duration of over four weeks should be drawn up in writing. Should this requirement fail to be complied with, the employment contract shall be presumed full-time and of an indefinite duration, except when evidence is produced to prove the contrary. In any case, both parties have the right to demand a written contract, throughout the whole duration of the working relationship.

The contract must indicate the type of contract, period of contract, work hours, earnings, applicable Collective Agreement, the trial period and any other deal make by the parties.

Mandatory Requirements
  • Trial Period
  • There is no legal obligation to provide trial periods (known as “probationary periods”) when engaging new employees. It has, however, become common practice to do so and these trial periods tend to range from between three to six months. In certain type of contracts, the trial period can be extended up to nine months.

    Trial period is usually established in the Collective Agreements, being able to attend the Worker’s Statute Act subsequently or to establish a different trial period in the contract, which under no circumstance can exceed the aforementioned legal limits.

  • Hours Of Work
  • The daily hours of work shall be those established by the Collective Agreements, with a weekly limit of 40 hours.

    The Collective Agreements can establish a maximum of working hours per year, which must be respected.

  • Special Rules For Part-time Work
  • Part-time work contracts must establish specifically the daily hours of work and the work schedule of the employee.

    Part-time employees are not allowed to work overtime, but they can make supplementary hours which limit cannot exceed the working hours of any full-time employee of the company.

    The working hours of part-time employees shall be recorded on a day-to-day basis and will be totalized on a monthly basis.

    Part-time employees have the same duties and rights than full-time employees, but it is possible the Collective Agreement recognised some rights to them proportionally to their working hours. Nevertheless, absence of discrimination must be ensured.

  • Earnings
  • The government establishes the minimum monthly wage (i.e. for 2021 €950.00) , which is revised annually. The employer may decide the economic terms of the contracts but must always respect this minimum wage and/or the one fixed by the Collective Agreement.

  • Holidays/Rest Periods
  • Worker’s Statute Act establish the right to a minimum of 30 calendar days per year. There are also compulsory weekly rest periods. The Collective Agreement can improve the number of days of holidays.

  • Minimum/Maximum Age
  • The minimum working age is 16 years old. Between the ages of 16 to 18 years old the employer needs authorization from the employee’s parents. As regards to retirement, in general terms, the minimum age is 67 or 65 years (when 38 years and 6 months of contribution have been completed).

  • Illness/Disability
  • In cases of ordinary and job-related illness/disability the employee is covered by the Social Security System for up to 18 months.

    In order to know illness/disability is ordinary or job-related we must attend to the Social Security Law, due to depending on the kind of illness/disability the disability allowance will present differences.

    In addition, there are other specific rules for ordinary illnesses which must be observed.

  • Location Of Work/Mobility
  • The employer shall inform the employee in writing about the workplace where he/she will perform his/her services. With regards mobility, the employee may be posted to another place because of economic, technical, organizational or production grounds. This mobility must be notified to the employee and the employees’ legal representatives at least 30 days anticipation

    When the work to be performed requires travelling, the employer usually pays or reimburses to the employee for his/her travel expenses.

  • Teleworking
  • The Telework Legislation recently approved differentiates between remote working, i.e. work that occurs away from company premises on a regular basis, and teleworking, a sub-category of remote working that occurs exclusively or predominantly online. The regular basis of work is defined as at least 30 % of the working week, the equivalent to approximately two days a week for a period of three months.

    Teleworking is part of a voluntary agreement between employer and employee. It is possible to opt out of it at any point. An agreement must be signed between employer and employees outlining details on the new arrangement, such as: an inventory of equipment, list of expenses, required working hours, distribution between remote and on-site working, duration of the agreement and the location of remote and on-site work.

    Companies may monitor remote workers as long as they respect the dignity of employees. Remote workers have the right to disconnect outside of work hours and to enjoy flexibility within reason. Remote workers are also entitled to equal treatment and opportunities as on-site workers.

  • Pension Plans
  • The Social Security System provides a pension scheme for early retirement, retired employees and permanently disabled employees, as well as in case of death. There are special rules for employees who retire early, such as the requirement to have covered a minimum contribution period. On the other hand, there is no obligation for the employer to supply the employee with a private pension scheme, but some companies offer it as an additional benefit for the employee.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
  • Maternity/adoption: Maternity benefit is paid while the period of leave is enjoyed. In the event of childbirth, the period lasts for 16 weeks up to 18 weeks in cases of multiple childbirth. The period of leave may be distributed before and after childbirth as the employee may elect, provided that at least 6 weeks are taken after childbirth.

    Paternity: Paternity benefit is also paid while the period of leave is enjoyed. In the event of childbirth, the period lasts for 12 weeks in 2020. The paternity leave may be distributed as the employee may elect, provided that at least 4 weeks are taken after childbirth.

    In 2021, paternity leave period last 16 weeks, and at least 6 weeks must be taken after childbirth.

    Adoption: Adoption benefit is paid while the period of leave is enjoyed. Once the judicial resolution has been taken, the period lasts 16 weeks. The period of leave may be distributed as the employee may elect, provided that at least 6 weeks are immediately taken after the judicial resolution.

    In the event of multiple birth or adoption, the leave period will last two more weeks for each child from the second.

  • Compulsory Terms
  • The compulsory terms of an employment contract are as follows: i) full name and identification data of any of the parties; ii) date when the employment contract begins, as well as its duration; iii) salary; iv) hours of work; v) amount of holiday; vi) provisions relating to illnesses; vii) employee’s job title, his/her professional category and group; viii) place of work; ix) any applicable collective agreement.

  • Non-Compulsory Terms
  • The employer and the employee can negotiate any other terms, provided they are not less favourable than the statutory rights.

Types Of Agreement

There are different types of employment contracts, such as full-time, part-time, variable, fixed term, senior management contracts and ordinary contracts. No employee may be discriminated against for working on a part-time or fixed-term basis.


During the term of the employment contract the employee must respect the confidentiality of the employer’s industrial and commercial information.

Ownership of Inventions/Other Intellectual Property (IP) Rights

When the invention is created by the employee in the course of his work at the company, the owner will be the company, unless otherwise provided in the contract.

When the invention is created by the employee by him/herself but using the tools provided and the knowledge acquired at the company, the owner will be the company, but the employee has the right to perceive some economical compensation.

Pre-Employment Considerations

If a foreign company wants to hire an employee in Spain, it must have at least a permanent establishment (i.e. branch) in the country or a responsible person who acts in name of the company and who has the capacity to hire.

When a job offer is published it must comply with the principle of equality. It is not possible to publish a job offer that is discriminatory on the grounds of age or gender, among others, unless otherwise required due to the especially of the job position.

During the interviews, the interviewer must be careful regarding the kind of questions he/she may ask. Personal and intimate questions are forbidden, such as civil estate, pregnancy, religion, sexual orientation or other questions which may be disrespectful. Questions must be focused to obtain the necessary information to know if the candidate is adequate to the job position.

Limitations: under no circumstance can the company access to the candidates nor to employee’s social media profiles. Neither is possible to ask to the candidate for the criminal record, unless otherwise required due to the especially of the job position.

Hiring Non-Nationals

EU nationals are entitled to work in Spain with no limits. Non-EU nationals need to have a residence-work permit to be entitled to work. The employer is subject to administrative penalties if he employs a non-EU national who does not have the corresponding residence-work permit. From 2021 Post-Brexit consequences must be analysed. Special legislation over Gibraltar's border entered recently in force.


Hiring Specified Categories Of Individuals

The Workers’ Statute Act and some other special rules establish specific requirements and benefits to improve women´s employment, as well as those women victims of gender violence, the employment of disabled people and unemployed workers (specially long-term unemployed).

Outsourcing And/Or Sub-Contracting/Temporary Agency Work

When an employer contracts an outsourcing service, he/she has to grant to the employees involved the same working conditions enjoyed by the rest of his/her employees. The employer shall ensure that the outsourcing company is complying with its obligations regarding the Social Security payments.

The employees of the outsourcing company or the Temporary Agency Work must be informed by their employer about the identity of the new company and the kind of work they are going to be doing.

The Outsourcing company or the Temporary Agency Work must provide to their employees who are going to be transferred the Health and Safety prevention training and the personal protective equipment and tools they’re going to need in the client company.

Payrolls of the transferred employees to the client company will be paid by the Outsourcing or the Temporary Agency Work. Regarding to the holiday's period, this must be deal by the employee with their Outsourcing or the Temporary Agency Work, not the client company.

Notwithstanding the elements aforementioned, the Outsourcing or Temporary Agency Work employees must also be duly identified in the client company.

The hiring of an employee in order to be temporarily transferred to another company must be done compulsorily through an officially registered Temporary Employment Company.

Changes To The Contract

The employer cannot make unilateral modifications to the employment contract without the employee’s prior consent, except in certain circumstances. The employer must justify and inform the employee of such measures 15 days in advance and the employee must give his/her consent in writing, pursuant to the provisions of Article 41 of the Workers' Statute.

Change In Ownership Of The Business

A change in ownership of the business does not terminate the employment relationship, as the new employer must maintain the employees with the same terms and conditions they previously had, including the Social Security rights and obligations. If the change of ownership leads to a substantial modification of the working conditions, the employee may refuse to be transferred to the new employer, in which case he/she will receive the corresponding liquidation because of termination of the contract, under the terms established by Article 41 of the Workers' Statute.

Social Security Contributions

Both employers and employees are obliged to contribute to the Social Security System. This obligation will run throughout the employment contract term. Employers are required to contribute towards several allowances payable to employees during their employment, including sick pay and maternity pay, which may vary depending on the different collective agreements.

Accidents At Work

The employee shall be entitled to effective health and safety protection and shall be bound to observe all legal and statutory measures. Pursuant to Act 31/1995 on Prevention of Risks at Work, the employer must take several steps with regards prevention of risks. A breach of these duties shall constitute a material infringement and will be penalised as provided for in the mentioned Act.

Discipline And Grievance

There are several obligations on the employer. Currently, the employer must notify the employee of the disciplinary or grievance measures and must justify the adoption of such measures, through a signed document.

Harassment/Discrimination/Equal pay

According to the Workers’ Statute Act, any act or decision of an employer which discriminates against the employee, either directly or indirectly, based on age or disability, and regarding pay, working hours and other employment conditions, on grounds of sex, origin, marital status, social status, language, religion, political ideas, sexual orientation, and trade union membership, shall be deemed null and void. Any actions declared discriminatory may result in a serious administrative penalty and may allow the employee to bring a claim for court protection, including, the special process of fundamental rights protection, which may result in a court judgment with an indemnity for damages and the ordinary process asking to resolve the employment contract and to receive the corresponding indemnity.

Compulsory Training Obligations

In general, there is no obligation on an employer to train his/her employees, except in cases of training contracts or when the employee needs to have a specific knowledge of a particular aspect of his/her work. The only compulsory training that the employer must provide to the employee relates to the prevention of risk at work.

Offsetting Earnings

It is possible for the employer to offset earnings against an employee´s debts. Nevertheless, the employer may only deduct a certain percentage of the employee’s salary if it is so requested by the Court or by mutual agreement between the parties.

Payments For Maternity And Disability Leave

The protection provided by the Spanish Social Security System consists of financial support during periods of maternity leave. The employee must have been registered at the Social Security System and must have completed a minimum contribution period which varies according to the age of the mother at the time of birth:

  • Under 21 years of age: no minimum contribution period required.
  • Between 21 and 26 years old: a minimum of 90 days of contributions in the last 7 years before birth, or 180 days in their entire working life.
  • Over 26 years of age: a minimum of 180 days in the 7 years prior to birth or a total of 360 days in their entire working life.

Maternity financial support consists of a benefit equivalent to 100% of the assessment basis. It is managed directly by the management entity and there can be no contribution from the employer. Maternity benefit is paid while the period of leave is enjoyed. With regards disability leave the employee shall be entitled to receive, up to 18 months, a sick pay benefit equivalent to 60% of the monthly base salary, from the 4th to the 20th day of the sick leave and increased to 75% from the 21st day onwards. It is paid by the employer from the 4th to the 15th day of sick leave, and by the Social Security System from the 16th day onwards. The first 3 days are unremunerated. When the leave is caused by professional contingency, the employee will receive 75% from the following day to the leave.

Compulsory Insurance

The employer is not required, in principle, to subscribe to any insurance in favour of the employee, subject to what may be determined by each collective agreement, but it could be offered as an additional benefit in kind.

Absence For Military Or Public Service Duties

The employer is obliged to authorise the employees’ leave for public service duties, but not for military service, as it has not been compulsory in Spain since 2001.

Works Councils or Trade Unions

With regards works councils, the Workers’ Statute Act establishes that a works council shall be set up at every workplace with a workforce of fifty or more workers. The employer has to notify the works council of various decisions (such as working hour reductions, restructurings and relocations). When the workforce is between 10 and 50 employees, they may elect a delegate (up to thirty workers, one; from thirty-one to forty-nine, three) Likewise, there may be a delegate of personnel in those companies or centres that have between six and ten workers if they so decide by majority. Every works council member or delegate is entitled to “credit hours”, being an allowance of several hours per month to enable him/her to discharge his/her representative duty. The Organic Trade Union Freedom Act grants employees the right to freely join a trade union recognised in the Spanish Constitution and it applies to all employees, civil servants or otherwise. The Act establishes the procedure for organisations to acquire legal personality and provides for court control in the event of potential unlawfulness in the organisation’s articles. There are few formal requirements, and they are internationally accepted; the only administrative control is purely formal.

Employees’ Right To Strike

Any employee has the right to strike, but during the strike period the employment contract will be suspended (not terminated) and the employee will not receive his/her salary. Moreover, the employee will remain in a special situation within the Social Security System. Despite the existence of the right to strike, in certain industrial sectors it is compulsory for a number of employees to perform their services in order to cover the minimum services needed for the safety and maintenance of the company, or when the company has to perform an essential service required by the Community.

Employees On Strike

According to the Spanish labour rules, for the participation by an employee in a non- authorised strike cannot be considered as a cause disciplinary dismissal. Employers can only dismiss employees who have gone on strike when their attitudes can be considered as a cause of disciplinary dismissal (such as offences against employer, indiscipline, etc.)

Employers’ Responsibility For Actions Of Their Employees

There are two main categories of employers’ responsibility derived from the actions of their employees:

    1. Civil extra-contractual responsibility of the employer, because of damage caused by his employee within the performance of his/her work, being considered the direct responsibility of the employer.
    2. Civil responsibility derived from an offence committed by the employee while performing his/her duties that results in damage to the victim. In this case, the responsibility is considered subsidiary and will be activated only when the employee is considered insolvent.
Procedures For Terminating the Agreement

The procedure for terminating the agreement varies depending on the reason for termination. The employer may terminate the contract on the following grounds: the worker’s known incompetence; the failure of the employee to adapt to technical changes at work; where jobs need to be eliminated, in which case the employer shall have to base the decision to terminate on financial, technical, organisational or production grounds; The employer shall give the employee written notice, setting out the ground for dismissal and simultaneously providing a severance pay. The notice period shall be fifteen days and the worker shall be entitled to appeal the decision to terminate as an unfair dismissal.

Instant Dismissal

A contract of employment may be terminated by the employer, by instant dismissal based on the employee’s serious breaches and gross misconduct. The employee shall be given written notice of instant dismissal, setting out the grounds on which the dismissal is based and the date on which it shall be effective. Instant dismissal may be considered justified, unjustified, or unfair. Dismissal shall be considered justified where there is evidence of the breach argued by the employer in the written notice and this shall validate termination of the employment contract and leaves the employer with no right to compensation. When the instant dismissal is considered unjustified, the employer shall choose between reinstating the employee and making the corresponding severance payments.

It is considered unfair dismissal where the employer fails to satisfy the legal requirements and could even be considered null and void when termination is due to any of the events of discrimination prohibited in the Constitution or in the Workers’ Statute Act or where collective dismissal limits have been exceeded.

Employee's Resignation

The employee’s decision to terminate the contract must be voluntary and freely made. The employee must notify the employer of his/her unilateral decision to terminate the contract of employment, observing the relevant notice period, and satisfying certain requirements. The employee is entitled to terminate the contract on the following grounds: substantial changes in the working conditions; failure to pay or continuous delay in payment of the agreed salary and any other serious breach of obligations by the employer. The Workers’ Statute Act provides that where the contract of employment is cancelled based on any of the above grounds, the employee shall be entitled to the severance pays specified in the event of unjustified dismissal.

Termination On Notice

The employment contract can be terminated in the events provided for in the contract, upon expiry of the agreed term or completion of the contract work, namely in the following kind of contracts: training contracts, part-time, permanent-intermittent and hand-over contracts, fixed-term contracts and work or service specific contracts. There are different notice periods depending on the length of the contract.

Termination By Reason Of The Employee's Age

The contract can be terminated when the employee reaches the statutory retirement age, pursuant to the Social Security regulations, if it is foreseen in the applicable Collective Bargaining Agreement, in compliance with the requirements established in the Tenth Additional Provision of the Workers' Statute.

Automatic Termination In Cases Of Force Majeure

Employment contracts may be terminated on grounds of Force Majeure, but such termination has to be previously authorised by the corresponding administrative body, after an investigation to confirm that the performance of services by the employee is impossible. The indemnity in such cases will be 20 days salary per year worked.

Collective Dismissals

Collective dismissal shall be understood as the termination of employment contracts for economic, technical, organizational or production reasons when, within a period of ninety days, it affects:

    —Ten workers in companies with less than one hundred workers.
    —Ten percent of the workers in companies with between one hundred and three hundred workers.
    —Thirty workers in companies with more than three hundred workers.
    —When it affects the entire workforce in companies with more than five workers.

To carry out a collective dismissal the company must comply with the procedure established in Article 51 of the Workers' Statute, starting a period of consultation with the workers' representatives with a duration not exceeding thirty days or fifteen days when the company has less than fifty workers.

The parties must negotiate in good faith the conditions under which the collective dismissal will be implemented, trying to avoid or reduce as much as possible the degree of affection of the collective dismissal. The consultation shall take place in a single negotiating committee. Where there is more than one workplace, the committee shall represent the workplaces concerned and shall consist of no more than thirteen members.

At the end of the consultation period, the employer shall inform the employment authority of the agreement reached, if any (the employment authority may contest the agreement) and, if there is no agreement, shall inform the employment authority and the workers' representatives of the final decision on the dismissal and its conditions.

The employer's decision may be contested by the individual workers concerned through dismissal proceedings. If the claim is submitted by the workers' representatives collectively, the procedure for individual actions initiated shall be suspended until the claim is resolved.

Termination By Parties’ Agreement

The parties may terminate the contract by mutual agreement. The most common scenario is the employee’s request to finish his/her employment relationship with the employer and the acceptance of such decision by the employer. Both parties sign a liquidation agreement by which all pending obligations between the parties are settled. In this case, the employee is not entitled to any severance payment or to unemployment benefits.

Directors Or Other Senior Officers

There are special rules to terminate a director’s or senior officer’s employment, established in a specific law (Royal Decree 1382/1985). In case of termination by the senior manager, at least three and not more than six months’ notice shall be given, depending on the contract term. The senior manager may terminate the contract and be entitled to the severance pays agreed in his/her employment contract, based on serious breaches of contractual obligations by the employer. The employment contract may be also terminated upon withdrawal by the employer or by dismissal based on a serious breach by the senior manager with the same above-mentioned notice period. The senior manager shall be entitled to the severance pays agreed therein.

Special Rules For Categories Of Employee

There are special rules for some categories of employees, such as professional sportsmen practicing sport as their job, who are sponsored by an organization within a sport entity, and who are being paid for this performance. Additionally, the Workers’ Statute Act provides special rules for some other employment categories: i) housework, ii) senior management personnel, iii) disabled people employed in special employment centres, iv) harbour stevedores, etc.

Whistleblower Laws

Although it is a concept of Anglo-Saxon origin, with little tradition within the Spanish jurisdiction, there are already regulations in this regard. Specifically, article 31bis of the Criminal Code determines the company's obligation to adopt accusation channels by providing that the company will be exonerated from criminal liability if it adopts management models that include surveillance measures to prevent crimes, imposing the obligation to report possible non-compliance.

Similar concepts to this figure may also be found in regulations on data protection and on effective gender equality.

Currently, the applicable law on Whistleblowing is Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of individuals who report infringements of Union law. It was published in the Official Journal of the European Union on 26 November 2019, setting a deadline of two years for the implementation of its guidelines, which must be applied by member countries from 21 December 2021.

The objective of these regulations is to protect companies in which the commission of certain crimes is likely (frauds and money laundering; non-compliance with data protection regulations; tax evasion; labour non-compliance; etc.), and to comply with these regulations, communication channels must be established to encourage the reporting of criminal acts for their subsequent resolution.

The implementation of these measures is mandatory for companies with more than fifty employees.

Specific Rules For Companies in Financial Difficulties

There are specific rules for employees working in a company which is in financial difficulties, namely when the company enters into insolvency or bankruptcy. According to the Workers’ Statute Act, a collective dismissal or redundancy procedure shall be deemed to exist where termination of the contracts of employment is based on financial grounds. Employees whose contracts are terminated as a result of the redundancy procedure, shall be entitled to receive a severance pay of 20 days’ pay for each year of service, up to a maximum of 12 months.

Special Rules For Garden Leave

The figure of the Garden Leave has no specific regulation, as it is a concept of English law origin. Specifically, it refers to the situation of an employee who is excluded from the right to go to work, while maintaining his or her right to receive remuneration. This figure is usually used in cases where the employee has been dismissed or has resigned, and this situation applies to him/her during the days that run from the notification to the effective date.

Although it is not specifically regulated in the Spanish jurisdiction, the company is entitled to prevent the employee from going to work, while maintaining his or her remuneration, for a certain period.

Restricting Future Activities

Generally, the employer may establish an obligation of non-competition, for a period of not more than two years after the termination of the employment agreement the employer has to prove an effective industrial or commercial interest and must offer the employee financial compensation.

Severance Payments

Severance payments depend on several circumstances, such as the length of the contract, the salary received and the seniority of the employee, as well as the kind of dismissal. When the dismissal is considered unjustified or unfair, the employee shall be entitled to a severance payment of 33 days’ salary per year worked and, in some cases, a severance payment of 45 days’ salary per year worked, depending on the date of the beginning of the labour contract. Severance payments for dismissals based on objective and economic grounds are for 20 days’ salary per year worked.

Special Tax Provisions And Severance Payments

Severance payments, up to the established limits, are exempt from Social Security payments and income tax withholding.

Allowances Payable To Employees After Termination

Following termination, the employer is not required to contribute towards any allowances payable to the employee, apart from the severance payments above indicated.

However, Spanish legislation provides that companies making a collective redundancy must contribute a sum of money to the Public Treasury when dismissing people over 55 years of age and a series of additional requirements are met,

Time Limits For Claims Following Termination

In case of unjustified, unfair or dismissal based on objective reasons, the employee has 20 days from the termination notice to present the corresponding claim before Court.

Specific Matters Which Are Important Or Unique To This Jurisdiction

In any kind of dispute arising from a contract termination or a salary claim, it is compulsory for both parties to attempt a conciliation act, prior to initiating legal proceedings. This conciliation act takes place before an administrative body named “Mediation, Arbitration and Conciliation Service”.

COVID-19 - Exceptional Regulations

As a consequence of the health crisis resulting from COVID-19, a number of exceptional and temporary measures related to the termination of contracts have been adopted:

    —Dismissals based on objective grounds are restricted, since force majeure and economic, technical, organisational and production reasons, for the suspension of contracts and reduction of working hours, cannot be understood as justifying the termination of the employment contract or the dismissal.
    —Interruption of the maximum duration of temporary contracts: The suspension of temporary contracts due to Temporary Redundancy Proceeding (ERTE-COVID), including training, replacement and interim contracts, will entail the interruption of the computing of both, the duration of these contracts and the reference periods equivalent to the suspended period, in each of these contractual modalities, with respect to the employees affected by them.
    —Companies benefiting from Social Security benefits, because of the implementation of a Temporary Redundancy Provisions based in COVID, will be subject to the Company's commitment to maintain employment for a period of six months from the date of the restart of the activity, this being understood as the reincorporation into effective employment of persons affected by the Temporary Redundancy, even if this is partial or only affects to part of the staff.

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Ma Cruz Gimenez Guitard
Gimenez Torres Abogados

Silvia Moreno Benitez
Gimenez Torres Abogados

Claudi Garcés
Ventura Garces

Víctor de Cambra
Ventura Garces

Pablo Sprazzato
Ventura Garces


© 2021, Gimenez Torres Abogados and Ventura Garces. All rights reserved by Gimenez Torres Abogados and Ventura Garces as authors and the owners of the copyright in this chapter. Gimenez Torres Abogados and Ventura Garces have granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021