Navigating Employee Dismissal and Notice Periods in Spain

Spanish employment law establishes clear parameters for terminating employment contracts, requiring objective justification from both employers and employees. The specific rights and obligations depend on the termination reason and applicable collective bargaining agreements.

Understanding Notice Period Requirements

Employers must provide a minimum 15-day written notice before termination, including a dismissal letter explaining the reasons and notification to social security authorities. Failure to provide notice requires compensation payment. However, disciplinary dismissals or terminations during probation periods typically exempt employers from notice requirements and severance payments.

In collective dismissal scenarios, companies must engage in consultation with employee representatives before implementation. Large enterprises (300+ employees) require 30-day consultation periods, while smaller companies need 15 days. Following consultation, individual notices of 7-15 days must be provided to affected employees.

Severance Compensation Structures

Spanish law distinguishes between different types of dismissals regarding severance entitlements. For objective dismissals (economic, technical, or organizational reasons), employees receive 20 days' salary per year of service, capped at 12 months' wages. Unfair dismissals recognized by courts or admitted by employers warrant 33 days' salary per year worked, with a maximum of 24 months' compensation.

Daily salary calculations incorporate all remuneration components from the preceding 12 months, including bonuses, incentives, and non-cash benefits. Only extraordinary payments are excluded from this calculation. Recent court rulings have clarified that stock options may also factor into severance calculations in certain circumstances.

Collective Dismissal Thresholds and Procedures

Spain defines collective dismissals based on company size and affected employee percentages:

Companies with under 100 employees: minimum 10 affected workers
100-299 employee organizations: 10% or more of workforce
300+ employee enterprises: minimum 30 affected employees

Employers must demonstrate declining revenues or prove the necessity of restructuring to restore business viability. Documentation showing attempted alternatives to dismissal strengthens the company's position. Affected employees maintain the right to challenge dismissals in labor courts.

Termination Process Overview

The standard termination procedure involves multiple steps:

Providing statutory notice period or compensation in lieu
Issuing formal written dismissal notification specifying reasons
Calculating severance according to legal formulas
Settling final payments including unused vacation and bonuses
Processing social security and benefit plan terminations
Notifying relevant labor authorities as required

Companies like SailGlobal assist international employers in navigating these complex requirements while maintaining compliance with Spanish labor regulations.

Unemployment Benefits Eligibility

Spain's National Employment Service (SEPE) administers unemployment benefits requiring:

Official registration as unemployed
Minimum 360 days of social security contributions within previous 6 years

Benefits typically amount to 70% of the worker's previous base salary, potentially higher for employees with dependents or advanced age. Maximum benefit duration reaches 24 months, contingent on contribution history and individual circumstances.

Spanish Employment Termination: Dismissal Procedures, Notice Periods & Severance