Settlement Agreement In Spain

Dismissal for objective reasons The legal reasons for an objective dismissal can take many forms, such as. B the worker`s lack of adaptation to technical changes or the need to repress a post because of economic, technical, production or organisational imperatives. In this case, the employer must send a letter of dismissal to the worker and offer him compensation based on 20 days` salary per year of service in the company, the maximum amount being set at an annual salary. In practice, it is very difficult for the employer to defend his decision before the courts and the parties often conclude with a negotiated settlement on the basis of 35 days` salary per year with the company, which corresponds approximately to the average between the severance pay corresponding to a justified dismissal (20 days / year of service) and the dismissal, which corresponds to an unjustified termination (45 days/year of service). We can also point out that in the event of termination for an objective reason, the notice period is usually 30 calendar days (unless the collective agreement provides for a longer duration), but the parties may agree that it will not be executed, in which case the employee will receive the corresponding remuneration. Disciplinary dismissals The legal basis for disciplinary dismissal is strictly defined by law and such termination of an employment contract can only be based on repeated absence or lack of punctuality, insubordination or disobedience, physical or verbal abuse, violation of contractual good faith, voluntary and continuous reduction of labour productivity, habitual drunkenness or substance abuse; that have a negative impact on work delivery. In this type of procedure, the effect of the dismissal is immediate and no compensation is to be paid to the dismissed worker. However, the employer faces a financial risk when a dismissal deemed unfair of 45 days` salary per year of seniority is valid. The facts purporting to justify such disciplinary dismissal must therefore be very precise and detailed in the dismissal served on the worker on the ground of dismissal.

These facts are prescribed by law after a period of 60 days from the date of their discovery and, in any case, six months after their occurrence. However, in practice, this procedure is quite common in Spain, as it allows the employer to indicate that the payment of notice and the financial penalty in the event of dismissal recognized as unfair are not higher than those of dismissal for objective reasons. Collective redundancy the procedure for collective redundancies (“Expediente de Regulación de Empleo”) applies when, in most cases, at least 10% of a company`s staff is dismissed for economic reasons within 90 days. Such a procedure is very strictly regulated, since its impact on the company and the social environment is significant. First, such a measure must be absolutely necessary for the future operation of the business, due to the existence of heavy losses or a radical change in market conditions, and not just to contribute to the improvement of the profitability of the company. . . .

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