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5. Dismissal

Dismissal is one of the causes for which the employment contract can be terminated. In this case it is the unilateral decision of the employer to terminate the contract. Dismissal may be collective or individual.

Collective dismissal

Collective dismissal must be based on economic, technical, organizational or production reasons. It is understood that there exist these reasons where the future running of the society is in danger and it is advisable to terminate some employment contracts to overcome the society "crisis".

There exist collective dismissal in the following cases:

In Such cases the society must start an administrative enquiry before the Labor Authorities which will analyze whether there exist the economic, technical, organizational or production circumstances that the employer alleged or not; they will also analyze if there exist other method to solve the "crisis" situation of the company.

If the administrative decision is in favour of terminating the employment contracts, the company will have to pay the minimum indemnity fixed by law for these cases, 20 days of pay per year of service, with a maximum of 12 monthly pays.

When labor authorities disagree the employers' decision of terminating the employment contracts, employees with indefinite contracts will be paid the indemnity corresponding to disciplinary dismissal, 45 days of pay per year of service, with a maximum of 42 monthly pays.

The employee can file an appeal against the employer's decision. The labor judge may agree with the employer's measure, in which case he declares the confirmation of termination of the contract; or may refuse the termination, and declare that the dismissal has been unfair.

Disciplinary Dismissal (individual dismissal)

In this case, the employer unilaterally decides to terminate the contract of a worker on account of his serious contractual breach.

The main causes for which an employer can terminate the contract of an employee, can be the following:

The dismissal shall be notified in writing to the employee.

Where the employee does not agree with the employer's decision, he may file a demand for conciliation before the arbitration office (Servicio de Mediación, Arbitraje y Conciliación) within 20 days upon receipt of the dismissal letter, in this way both sides may settle a reconciliation. If this fails then the employee must place a suit before the Labor Courts.

When the judge considers that the employer's decision is justified and proved, the employment contract is terminated without any compensation. When it is considered that the dismissal is unfair, the employer is sentenced to pay the corresponding wages since the day of dismissal until the day of the judgement. Furthermore, he must either re-employ the worker or compensate him with 45 days of salary per year of service, with a maximum of 42 monthly pays.

Dismissal based on objective causes according to law

The main causes are as follows:

The employer shall notify the dismissal in writing to the employee within at least 30 days before the date in which the dismissal shall take effect. The employee shall receive an indemnity equal to 20 days of salary redundant
If in doubt about your rights if you are laid off you should consult a Spanish Solicitor.

 

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