Compensation for unfair dismissal - free determination by court:
Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):
- Dismissal declared unfair by the Court (a valid reason has not been given, or cannot be legally substantiated - "despido improcedente"): the employer can opt for compensation in lieu of reinstatement 45 days' wages for each year of service up to a maximum of 42 months' pay + back pay from the date of the dismissal until the judicial decision or until the the workers finds another job if that happens before the court's decision.
[Compensation for unfair dismissal is reduced to 33 days' wages per years of service up to a maximum of 24 months' wages in the event of objective dismissal subsequently declared unfair (improcedente) if the dismissed worker is under a contract for the promotion of indefinite employment ("contrato de fomento de la contratación indefinida"). Those contracts can be concluded with certain categories of unemployed individuals (i.e individuals aged 16-30, individuals over 45 years, under-represented women, disabled persons).]
- If the employer acknowledges that the dismissal is unfair and deposits compensation for unfair dismissal with the Labour Court within 2 days of the dismissal, the employee will not be entitled to back pay if the Court subsequently rules the dismissal to be unfair.
- No compensation following discriminatory dismissal or dismissal based on maternity-related grounds. In such cases the dismissal is null and void and reinstatement with back pay is the only available remedy.
- No compensation if the employer fails to observe the requirements applicable to objective dismissal (written notice indicating the reasons for dismissal and payment of severance pay): the dismissal is null and void and therefore the employee is entitled only to reinstatement with back pay.
- In the event of non-compliance with procedural requirements applicable to disciplinary dismissal, the employer may choose between reinstatement and compensation for unfair dismissal + back bay as described above.
- On unfair dismissal, see art. 56 ET.
- On compensation for unfair dismissal for workers under a contract for the promotion of indefinite employment, (Contrato para el fomento de la contratación indefinida) see Act 12/2001 of 9 July 2001.
- On discriminatory dismissal and dismissals based on maternity-related grounds, see art. 53(4) and 55(4) ET.
- On non-compliance with the objective dismissal requirements, see art. 53(4) ET.
- On non-compliance with the procedural requirement applicable to disciplinary dismissal, see art. 55(4) ET.
NOTE - Labour Market Reform, enacted by Royal Decree Law 10/2010 [RDL10]:
* The RDL modifies Act 8/2001 of 9 July 2001 with regard to contracts for the promotion of indefinite employment by extending the groups of persons that an enterprise may hire through this type of contract. The amount of compensation for unfair dismissal remains unchanged.
* The RDL modifies the legal effects of the failure to observe the procedural requirement applicable to objective dismissal (including redundancy). Such failure now entails the same consequence as unfair dismissal (employer's choice between reinstatement or compensation) instead of the nullity of the dismissal (art. 53(4) ET modified by art. 2 RDL10)
- In the event of unfair dismissal ("despido improcedente"), the employer may choose between reinstating the employee or paying compensation for unfair dismissal (art. 56(1) ET).
However, if the dismissed employee is a workers' representative, the choice between reinstatement and compensation shall be made by the employee. Therefore reinstatement of a workers' representative is mandatory if so requested (art. 56(4) ET).
- Reinstatement is mandatory in the event of discriminatory dismissal or dismissal based on maternity-related grounds (art. 53(4), 55(5) and 55(6) ET.
- Similarly, failure to observe the requirements applicable to objective dismissal (written notice indicating the reasons for dismissal and payment of severance pay) will give rise to reinstatement (art. 53(4) ET).
NOTE - Labour Market Reform, enacted by Royal Decree Law 10/2010 [RDL10]:
The RDL modifies the legal effects of the failure to observe the procedural requirement applicable to objective dismissal (including redundancy). Such failure will entail the same consequence as unfair dismissal (employer's choice between reinstatement or compensation) instead of mandatory reinstatement required by the nullity of the dismissal (art. 53(4) ET modified by art. 2 RDL10).
Preliminary mandatory conciliation:
-Art. 63 LPL: Preliminary conciliation at the competent service of the labour administration is mandatory before the dispute can reach the labour court.
- In addition, the parties can resort to judicial conciliation at the labour court in the beginning of the proceedings, before the trial takes place, see art. 84 LPL.
Competent court(s) / tribunal(s):
The Labour Courts have jurisdiction over individual labour disputes arising from the employment contract. (see the Labour Procedure Law, art. 2(a); see also the specific provisions on dismissal: art. 103- 124 LPL).
Complaints relating to both disciplinary and objective dismissal shall be lodged within 20 days of the dismissal (art. 103 and 121 LPL).
The Labour Courts system is organized as follows:
The labour courts (Juzgados de lo Social) are the court of first instance for labour disputes arising at the provincial level. The employment divisions of the higher courts (Sala de lo Social de los Tribunales Superiores de Justicia) have jurisdiction over labour disputes whose scope is greater than a province, but within a region (or autonomous community), and their judgments can be appealed. The employment division of the National Court (Sala de lo Social de la Audiencia Nacional) hears labour disputes whose scope is greater than an autonomous community. The employment division of the Supreme Court hears appeals of decisions of the employment divisions of the National Court and of the higher courts.
"With respect to other ways of out-of-court [individual] conflict resolution processes, their establishment in the state and the Autonomous Communities was carried out through agreements between the most representative union and employers' organisations, establishing the type of mediation and the arbitration as procedures (some Communities also include conciliation). Therefore, since the early nineties procedures have been developed for resolving conflicts of this nature, first in the historical communities (Basque Country, Catalonia and Galicia), and then in all the others, and joint institutions were created normally consisting of a department or section in the Autonomic Administration. Similarly, since 1996 there has been the Agreement on the Extrajudicial Resolution of Labour Conflicts (Acuerdo de Solución Extrajudicial de Conflictos, ASEC) at the national level, signed this year and renewed in 2009 to last until 2012, by the UGT, CCOO (the unions), CEOE and CEPYME (the employers' organisations). This agreement opened the doors to the creation of the private foundation administered by the Interconfederal Service of Mediation and Arbitration (SIMA), financed entirely by the state, but managed autonomously by the social partners. Its services are free, just like those of the joint institutions of the communities, but they are distinguished as focusing only on collective conflicts".
Source: Pablo Sanz de Miguel and Maria Caprile, "Spain: Individual disputes at the workplace - alternative disputes resolution" available on the EIRO website at: http://www.eurofound.europa.eu/eiro/studies/tn0910039s/es0910039q.htm