The debate on dismissal compensation will enter a new phase at the end of the year, when the Supreme Court will rule on the multiple judgments that impose “additional” compensation beyond the legal maximum of 33 days per year worked for unfair dismissal. Although uncertainty over the High Court’s decision remains for now, recent court rulings provide some insight into the direction it may take. In fact, the same judges who set these “additional” compensations also impose red lines that prevent their applicationspecifying in which cases the worker’s request is doomed to failure.
The government appears to have suspended for the moment, until the issue of reducing working hours is resolved, its plans to reform layoffs. However, this is very present in the activity of courts and law firms. The resolution of the European Committee of Social Rights (ECSR) which indicated that the cap on compensation in the event of unfair dismissal violates the European Social Charter is not binding, but reaffirmed the positions of the judges who had already interpreted it in this way. manner. A trend that the High Courts of Justice of Catalonia and the Basque Country started more than a year ago and on which it is now the turn of the Supreme Court to rule.
In this scenario, the uncertainty faced by companies and law firms has skyrocketed, adding to that already caused by the new cases of invalidity of dismissals, which means that fewer and fewer dismissals are not only considered justified by the judges, but that they are canceled. “Before there was a dispute about the origin of the dismissal, now about the inadmissibility,” summarizes the associate of Gómez Acebo y Pombo, Ignacio del Fraile.
95% of layoffs request cancellation
According to their estimates, 95% of requests request its nullity (which requires readmission), but they increasingly include a request for compensation for more than 33 days per year with a limit of 24 monthly payments in cases where these in which the dismissal is declared inadmissible. But del Fraile points out that the judges themselves show more and more clearly the cases in which this assertion is rejected.
Until now, case law has favored compensation exceeding the legal ceiling when three conditions coincide: that the compensation received to be “skinny”, that due to the circumstances, the dismissal is considered a “fraud of the law” or even “illegal” (for example, when it is proven that the decision was arbitrary even if there is no cases of discrimination or violation of fundamental rights or other cases that would imply nullity and automatic reinstatement) and, finally, that the the worker proves and quantifies the economic damage caused by the dismissal.
The first judgment establishing additional compensation responded to these hypotheses: a worker dismissed just before her company declared an ERTE from which she was excluded without justified reason, and also clearly detailed the damages and economic losses suffered.
As we said in elEconomista.esthe wait to receive these “additional” compensation has triggered requests for dismissal, which are increasing with the termination of permanent contracts after the labor reform. Many workers who have not accumulated sufficient seniority in their employment and who, even if the dismissal is unfair, would receive reduced compensation after their dismissal choose this route to obtain higher compensation. But the judges themselves set limits.
The same superior courts of justice that opened this door did so: those of Catalonia and the Basque Country. According to del Fraile, in recent sentences They rejected the requests for two reasons: the company presented a “detailed” dismissal letter and because the worker failed to adequately quantify or justify the damages and damages caused by termination.
“Layoff letters of a folio and a half are not worth it”
These two hypotheses set the tone for the legal strategy that both employers and employees must follow. First of all, companies They must be careful to justify the causes of dismissal in as much detail as possible.. This prevents the judge from seeing signs of arbitrariness justifying higher compensation, even if the dismissal is declared unfair. “No more half-page letters alluding to vagueness as a reason for dismissal“, says Ignacio del Fraile.
This represents a hard blow for the way of dismissing many companies in Spain, accustomed to the path of “free dismissal”: presenting a barely justified dismissal with the already assumed anticipation that an agreement will be found in a conciliation document for a compensation of 33 days. Today, they increasingly run the risk that dismissal will cost them much more, or even be declared null and void.
But plaintiffs must also do their homework. To justify the request for higher legal compensation, it is not enough to be the victim of dismissal; it is also necessary to clarify the damage it causes in economic terms. “It is not enough to highlight the difference between the salary received and unemployment benefit” warns del Fraile. This nuance is important, because it clearly shows that the judges have not declared a ‘war on dismissal’ but on the abuses that they entail in exceptional cases and which result in equally exceptional damages for the worker. In other words, the additional compensation does not constitute a general or automatic benefit..
This, however, adds a problem for those being laid off, as they are subject to similar uncertainty as businesses in these processes: whoever presents better and more elaborate arguments will win. Among the lawyers The prediction is beginning to spread that this is the view that the Supreme Court will eventually subscribe to.since ultimately it maintains the validity of current legislation. This is also the approach defended by the public prosecutor (and therefore the Ministry of Justice, dependent on the socialist wing of the government) in its allegations to the CEDS. But that is not what the second vice president, Yolanda Díaz, wants. Neither do the unions.
The Minister of Labor is talking about revising the Workers’ Statute to explicitly regulate these additional compensations and the cases in which they should be applied. This would broaden the scope of these “additional” compensations and provide some legal certainty to workers, but the consequences are unpredictable and arouse concern among companies, whichThey have already seen how cases of invalidity have grown enormously over the last three years.
If the government establishes by law the cases in which dismissal is excessively penalized, we will surely obtain that companies will avoid them, not precisely by dismissing less, but by ceasing to hire the most protected workers. Or throw them away before they qualify to be one.
