Employment Law and Dismissal

Posted in: Legal

employment law and dismissals

Understanding employment law and dismissal is very important for any type of business, whatever size. Especially in these current very difficult times. Please see the end of the article for the most important change as at 27/3/2020.

In Spain, the law provides several reasons in the employment law and dismissal regulations why a worker can be fired. It also guarantees a worker’s rights against unjustified dismissals.

The different scenarios that a worker may face are detailed below:

Objective Dismissal

This type of dismissal applies when a worker does not have the knowledge or skills necessary to perform their job. When the worker does not adapt to internal changes in the employment relationship. Or technical, organisational, production or economic reasons that may occur in the company.

In this case, the employment law grants protection to the worker. They are entitled to compensation of 20 days’ salary per year they have worked, with a maximum of 12 months to be paid.

In addition, in this type of dismissal, the employer has to follow a series of formal requirements: the employer has to give the worker 15 days’ notice in advance, and has to deliver a letter of dismissal that includes the reasons why they are carrying out the objective dismissal.

Disciplinary Dismissal

On the other hand, the law also covers several instances in which a worker can be dismissed without being entitled to any type of compensation.

We refer to situations in which a worker, repeatedly and without just cause, does not go to work at all or is not on time. Also, disobedience or not carrying out work properly, physical or verbal offences against the employer or their co-workers etc.. Or a deliberate reduction in performance of their work. These can be causes of disciplinary dismissal.

In this case, the employer only needs to communicate in writing the reasons why the worker is dismissed. They do not need to give advance notice or any type of compensation.

Unfair or Null Dismissal

This is when both in objective and disciplinary types of dismissals above, the worker considers that the causes or reasons for that dismissal are not appropriate or justified. Or when the employer does not comply with the formal requirements set out in the law. Then the worker must, within 20 days after the dismissal happens. They must present a “papeleta de conciliación” (conciliation document). This claims that the dismissal is not legal.

In the event that the causes of the dismissal are not found within the reasons provided by law. Then the worker will be entitled to compensation of 45 days per year worked before February 2012. This is when the labour reform that took place. And 33 days per year worked from February 2012 until the termination of the contract.

However, in the event that these dismissals are based on any of the causes of discrimination prohibited in the Constitution or in the law. Or they violate the fundamental rights and public liberties of a worker. Then that dismissal will be considered as null or voided dismissal. In this case, the employer is obliged to re-employ the worker, and to pay salaries the worker did not receive during the processing of the dismissal process.

Exceptional situation: State of Alarm/Covid-19.

Within the causes of the objective dismissal, the employment law covers situations of “force majeure”, that is, those caused by an external event outside the scope of the employer’s activity. Being unforeseeable or inevitable situations. This is the situation in which Spain is in currently. As a result of the State of Alarm decreed last Saturday, March 14, 2020 due to Covid-19 (coronavirus).

In this case, the company has the option of availing itself of a temporary employment regulation proceeding (ERTE).

ERTE New Type of Employment Law and Dismissal

Through the economic measures that the Government of Spain has just approved on March 17, 2020, the worker who is affected by an ERTE goes into a temporary unemployment situation. Then they have the right to unemployment benefit. Even if the worker does not meet the requirements for it. (Thus a waiting period or minimum days of contribution to the Social Security). Although obviously the employee must have been on a legal contract.

Subsequently, once this situation of “force majeure” (extreme events) is over, the employer will have to re-employ the worker to the company. With the same conditions that they had previously, prior to the ERTE (temporary dismissal).

The SEPE office for unemployment is of course is closed to the public, but the service is still available (with the doors closed) online.

Employers

It is very important that for ERTE, if employers are thinking they need to let people go temporarily that they must liase with their asesor or laboral people in the first instance. We have talked to an asesor and each situation is different as to whether the company is eligible for this option. There is no one rule for all. They will need to be eligible depending on the situation of the company at the current time and the convenio that applies to their workers.

Force Majeure

If there is a case of “force majeure” that can apply to the company, then the procedure in article 51.7 WS must be followed, which the asesor/labour office will deal with. Then the employer will not need to pay salary and the employee will be able to access unemployment benefits.

So, do not take advice from other people or online, as each company has its own advisor. And they are the only one who can do this. You must contact them by email or telephone. Please bear in mind at the current time the regulations are new and complex, different rules apply to different scenarios. So they will need to study and advise. They may need time to do this. We are not a laboral office/asesor so are unable to help with this matter.

Do not rush into firing people without checking that you are eligible for ERTE proceeding as this could really back-fire and make a bad situation even worse. Please check and we hope that you can take the best course of action for you. You may find this article (in Spanish) of use.

Employees

You will find the information above regarding types of dismissal. We would advise that if you are on contract (employed), that if you are told that you are temporarily dismissed that you ask for the ERTE paperwork. Then you need to contact the unemployment office. Here is the link to the website https://sede.sepe.gob.es/portalSede/flows/inicio and here are telephone numbers http://www.sepe.es/HomeSepe/contacto/atencion-telefonica/tel-ciudadanos.html . You will find a great deal of information on how to proceed with this on the CAB Spain Facebook and website.

IMPORTANT Amendment to Law 27/3/2020

The government has banned dismissals called “objective dismissals” as a response to coronavirus.

The prohibition of these dismissals takes effect from 28/3/20.

The Ministry of Work and Social Economy, Yolanda Diaz, has announced “No one can use this health crisis for their own gain, no one can use Covid 19 as an excuse for dismissal.”

The government approved a legal clause that bans dismissals for “fuerza mayor” or extreme measures or for economic, technical, organizational or production reasons, that originate from the coronavirus crisis as a reason to justify the dismissal in the labour relationship.

These measures aim to assist alongside the requirements and conditions of the Temporary Employment Regulation Files (ERTE) (the way workers may be temporarily suspended) so that this crisis does not further erode the economy.

Questions on Employment Law and Dismissals

Following the new law which came into effect last night, the situation with regard to objective dismissals is as follows:

What happens regarding dismissals carried out before last night?

The decree is effective since last night, but the consequences of the previous dismissals will be interpreted using this new regulation. What this new decree is doing is telling judges how they should interpret objective dismissal in the future. Therefore, if an employee takes their case to a tribunal. When a Judge studies the case next year they will use yesterday’s decree to decide if the dismissal was or not legal.

Objective dismissal means that:

  • The company must prove it has economic reasons, proving losing money for a period of time (long period means, more than a week/month)
  • Company has to compensate employees with 20 days salary per year worked
  • Company has to pay the money at the moment of the dismissal, not later. If the redundancy is not paid at the same moment, the dismissal is not valid.

What about employees that have been dismissed (not ERTE) in the last two weeks?

They can start legal actions against the employer if:

  • The company has not fulfilled the legal obligation (20 days redundancy per year worked and immediate payment)
  • If the company is using economic reason to dismiss the employees, they must have used ERTE.

So, they can claim, and they have to be careful about time limitation.

So dismissals, companies can now only do ERTE, no other dismissals for economic reasons and only if their application is accepted?

Yes, ERTE must be used to suspend contracts because of economic reasons. Therefore, you cannot terminate contracts using objective dismissal for economic reasons.

4) If people not able to afford to reopen their business, what will happen re the ERTEs?. Each case will be different, of course. The Government says that if you don’t keep the employees during 6 months, you will lose benefits. But if the business closes, benefits don’t matter. The Law tries to cover everybody, not individual situations. If a company continues working and making money you must keep employees for 6 months, otherwise you will be punished. But if a company must be closed, it doesn´t really matter if you lose benefits.

Temporary Contracts

Temporary contracts are automatically extended until the state of alarm finishes. This means that if a contract expires next week, the employee must continue working until the state of alarm finishes. The employer must continue paying salary and social security.

Each case needs studying individually and professional advice to decide the best course of action.

Summary:

1º) Employers must be careful before taking decisions. They have to study their business, employees, incomes, and then decide the best option. A wrong decision could cost a lot of money.
2º) Employees must check if the dismissal is or not legal, and claim within 20 days.

If you feel that you have been dismissed without following proper procedures please contact us as soon as possible with the relevant paperwork you have been given and a copy of your contract and two recent nominas (payslips). If you are unsure if you are handling the situation with your employees correctly, please contact us also.