Compensation for dismissal without real and serious cause: 33 days per year of seniority in Spain, is that sufficient?
As we announced in our previous article on the preliminary interview, the lines are evolving in labor law in Spain.
The Tribunal Supremo (equivalent to the Court of Cassation in Spain) ruled in December on the scale of severance pay provided for in Article 56 of the Statute of Employees (equivalent to the Spanish Labour Code).
The Spanish pricing system called into question
In March 2024, the European Committee of Social Rights (ECSR), the Council of Europe's supervisory body, ruled that the Spanish system, capped at 33 days of salary per year of seniority (maximum 720 days), is not in compliance with Article 24 of the European Social Charter.
« Article 24 – Right to Protection in Case of Dismissal
In order to ensure the effective exercise of the right to protection in case of dismissal, the Parties undertake to recognize:
- the right of workers not to be dismissed without a valid reason related to their ability or conduct, or based on the operational needs of the company, establishment, or service;
- the right of workers dismissed without a valid reason to adequate compensation or other appropriate redress.
To this end, the Parties undertake to ensure that a worker who believes they have been dismissed without a valid reason has the right to appeal that dismissal to an impartial body. »
According to the CEDS:
- The cap on compensation prevents adequate redress for the actual harm caused by dismissal.
- The inability to claim additional damages limits the deterrent effect for the employer.
- Similarly, compensation that is too low relative to seniority may not be sufficiently dissuasive for the employer.
As a reminder, since the 2012 reform, Spanish law entitles employees in the event of dismissal without real and serious cause to compensation equivalent to 33 days of salary per year of seniority, capping compensation at 720 days of salary.
Decision of the « Tribunal Supremo »
On December 20th, the Spanish Supreme Court confirmed that the scale of 33 days per year of service:
- Cannot be increased by court order based on the employee's personal circumstances.
- Complies with Article 10 of ILO Convention No. 158, which requires "appropriate" compensation.
- Is not contrary to Article 24 of the ETUC, given that the Charter had not yet been published at the time of dismissal (application of the law over time).
And in France?
The Macron scale, introduced in 2017, has been the subject of similar criticism. However:
- In 2018, it was declared constitutional.
- In 2022, the Court of Cassation ruled that it also complies with ILO Convention No. 158.
- Article 24 of the ETUC is not directly applicable in France.
Note : In cases of wrongful dismissal, French judges may nevertheless adjust the compensation to the employee's specific circumstances.
Conclusion : A necessary reform?
The debate surrounding compensation scales remains heated in Europe. While in Spain and France the recommendations of the European Committee on Social Rights (ECSR) are not legally binding, they underscore the need to rethink these mechanisms to guarantee a genuine right to redress.
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