The term management personnelrefers to all of those upper-level employees with managerial responsibilities. © 2020 Mariscal Abogados S.L.P. The written notice of termination must be given one month in advance of the date of termination for each year the agency contract was valid (i.e. By continuing to browse the site you are agreeing to, Equality plans and their registration in Spain, Table of exemptions for temporary layoff procedures in Spain, Temporary Layoff Procedure (ERTE) in Spain: Royal Decree-law 30/2020, By mutual agreement by both employer and employee, Because of temporary incapacity of the employee, For maternity, paternity, other risks associated with childbirth, and legal adoption, When the employee is temporarily incarcerated, but no penal sentence against him or her exists, For a personal (temporary) emergency outside of the employee’s control, For economic, technical, organizational, or production reasons, For the employee’s having to take a forced leave of absence to fulfill a public duty, For the employee’s exercising his or her right to strike, For an employee’s decision to suspend the employment contract because she feels obligated to abandon the position because of gender violence or sexual harassment (this reason is gender-specific as stated in the Statute), Termination for the employee’s incompetence or ineptitude after having been hired into the company, Termination for the employee’s failure to adapt to the technical modifications in his or her position when changes are reasonable and have occurred within two months of any modifications within the employee’s position, Termination when the necessity exists objectively to amortize positions for causes listed in Article 51.1 (collective redundancy). The foreign national beginning business in Spain should keep in mind that a judge may declare a termination unjustified or null. Trade unions welcomed the ruling, demanding legal reforms to facilitate its full application of the CJEU ruling. To make such employment contracts favorable to the foreign-national employer, it is recommended that specific causes for termination and specific severance payment amounts be included in employment contracts for management personnel. Current legislation in Spain provides for different severance payments for dismissed employees according to different contract types. Suspension of the employment contract is only a temporary interruption to the employer-employee relationship. A proper termination, of course, causes the termination of the employment contract, legitimately stripping the employee of the right to severance or salary payments (Article 55.7). -. The first reactions of the Spanish social partners to this have been mixed. Information and Communication Technologies, Representativeness of the European social partner organisations: Education sector, European Company Survey 2019 - Workplace practices unlocking employee potential, Access to care services: Early childhood education and care, healthcare and long-term care, Upward convergence in the EU: Definition, measurement and trends, European Working Conditions Surveys (EWCS), European Monitoring Centre on Change - EMCC, European Observatory on Quality of Life - EurLIFE, European Observatory of Working Life - EurWORK, Database of wages, working time and collective disputes, Spain: Implications of court rulings on severance payments for temporary employees, different severance payments for dismissed employees, framework agreement on fixed-term work annex of Directive 1999/70/EC (PDF), compensate a former temporary substitute (PDF), 1,300 temporary substitutes who are pursuing similar claims, eurofound.brusselsoffice@eurofound.europa.eu. Nevertheless, the decisions mentioned above can be regarded as very important as they establish legal precedents. In the Basque Public Administration alone, representative trade unions estimate that there could be more than 1,300 temporary substitutes who are pursuing similar claims through the courts. The plaintiff received a severance payment of 12 days per worked year, and initially went to court with a case for incorrect dismissal, not over the amount severance payment amount. Check your inbox or spam folder to confirm your subscription. There are two forms for termination of regular employees according to the Workers’ Statute. Examples of such persons include a chief executive officer, a director on a board, a pres… The most common formula used in the Spanish employment law field is a severance payment to the employee of 45 days of his or her salary per each year that the employee has worked, prorated by those months worked for periods of time less than a year. The CJEU’s decision has been incorporated rapidly in several recent Spanish courts’ decisions on severance payments for temporary substitutes and temporary workers. The Spanish government has not taken a definitive position on the issue. The conclusions of this group (PDF) show important differences within it – some experts suggest that there is a conceptual confusion because the sentence does not reflect the reality of Spanish legislation and want to wait for new judicial guidance; others want to fully absorb the CJEU decision into Spanish law, solving the inequality over severance pay. A ruling by the Court of Justice of the European Union that temporary and permanent workers in Spain should receive the same severance pay has led to some confusion, with different Spanish courts coming to different decisions in separate cases. The issue is very important in Spain. On 14 September 2016, the ruling (C-596/14) by the Court of Justice of the European Union (CJEU) established that: The CJEU’s decision is based on the principle of ‘non-discrimination’ (unless an objective justification is possible). When an employer improperly terminates an employee, the employer has a timeframe of five days from the notification of the judicial decision, which declares the termination unjustified or improper, to readmit the employee with some severance pay based on one of two formulas outlined in the Workers’ Statute. This means that the agent could potentially bring a legal action against a company, requesting that the obligations of the contract be fulfilled, or that damages be paid. However, the majority of experts defend the notion that temporary substitute workers should get 12 days of severance pay, while pointing out the need to wait for further judicial decisions from competent Spanish courts and from the CJEU that may further clarify the issue. In the case of an agency contract that is for an indefinite time period, however, either of the parties can terminate the contract by way of written notice to the opposite party. Tell us what you think. Where a termination is considered null, the employer is required to readmit the employee, and the employer must pay the employee his or her corresponding salary for the time missed. This financial situation is much more preferable because immediately terminating an agency contract may be especially costly to a company. The Law Regulating Management Personnel also makes a reference to the Workers’ Statute’s Article 49 for other causes for termination of such employment contracts (death, mutual agreement by the parties, retirement, incapacity, etc.). New regulation affecting solar thermoelectric and wind power installations in... Regulation of discrimination labor relations in Spain, This site uses cookies. More specifically, the termination process initiated by the employer begins with the employer notifying the principal (an individual person included in the group term management personnel), in writing, that the employment contract is going to be terminated within three months of the notice of termination (Articles 10-11 of the Law Regulating Management Personnel). More cases involving these payments have been submitted to courts of justice and are awaiting a decision. The employer must then pay an indemnity to the employee of 20 days of his or her salary per year worked, prorated for those months during which the period of time worked is less than one year with a maximum of 12 months. The section of the Workers’ Statute that regulates terminations for disciplinary reasons does not state a required notification period, rather it only requires that the notification of termination explain to the employee the inappropriate act provoking termination and the date that the employer will consider the termination effective (Article 55). Temporary workers receive a severance payment of up to 12 days per worked year. Therefore, in the case that the foreign national’s new company hires agents instead of employees, it is recommended that the new company draft the agency contracts for an indefinite time period so that the new company retains the possibility of terminating the contract by only having to give notice. The Law Regulating Management Personnel is silent on whether an employer needs a reason to terminate the employment contract. The Spanish government is of the same opinion. The plaintiff’s initial one-year contract had been extended to two years and six months, but the hospital fired him when funding was withdrawn. If you have a query, do not hesitate to Contact us. If the foreign national at the new company chooses to hire management personnel, it is suggested that employment contracts be drafted to favor the new company in the case of termination. Permanent employees get 20 days per worked year (up to 12 months…