Settlement Agreement In Spain

If the parties fail to reach an agreement, the worker can take action before the competent court. The judge will pass judgment after proceeding with oral proceedings in accordance with the civil code in Spain. Dismissals for objective reasons Objective grounds for dismissal Objective reasons for dismissal can take many forms, such as. B as the inability of the worker to adapt to technical changes or the need to remove a job position due to economic, technical, production or organizational imperatives. In this case, the employer must send a letter of dismissal to the worker and offer compensation on the basis of 20 days` salary per year of service in the company, with a maximum of one year`s salary. In practice, it is very difficult for the employer to defend its decision and the parties in court and the parties often find themselves in a bargaining regime on the basis of 35 days` pay per year with the company, which corresponds approximately to the average between the severance pay corresponding to a reasoned dismissal (20 days/year of service) and the dismissal corresponding to an unjustified dismissal (45 days/year of service). We can also find that in the event of termination for an objective reason, the notice period is generally 30 calendar days (unless the collective agreement provides for a longer period), but the parties may agree that it will not be carried out, in which case the employee receives the corresponding remuneration. Disciplinary dismissals The legal grounds for disciplinary dismissal are strictly defined by law, and such termination of an employment contract can only be based on repeated absence or lack of punctuality, submission or disobedience, physical or verbal abuse, breach of contract, voluntary and continuous reduction of labour productivity, ordinary drunkenness or substance abuse that has a negative impact on performance. In the context of such a procedure, the dismissal is directly effective and the dismissed worker is not compensated. However, the employer faces a financial risk when a dismissal deemed unfair is considered unfair and is 45 days` pay per year of service. The facts that justify such a disciplinary dismissal must therefore be very precise and detailed in the dismissal if .b.dem employee. These facts are prohibited by law after a period of 60 days calculated from the date of their discovery and, in all cases, after 6 months of their appearance.

However, in practice, this procedure is quite common in Spain, as it allows the employer to explain that the payment of notice and the financial penalty are not higher in the case of dismissal recognized as abusive than for dismissal for an objective reason. Collective dismissal The collective dismissal procedure («Expediente de Regulacion de Empleo») applies when, in most cases, at least 10% of a company`s staff are laid off within 90 days. Such a procedure is very supervised, because its impact on the company and the social environment is important. First, such a measure must be absolutely necessary for the future operation of the business due to significant losses or a radical change in market conditions, and should not only contribute to the increase in profitability of the business. A collective dismissal in Spain must have the prior approval of the employment services before being implemented and also involves compulsory negotiations with the employer`s representatives, which last at least 30 days (or 15 days for companies with less than 50 employees). In practice, such negotiations can be lengthy, as the law does not provide for a maximum period of negotiation.