Before we begin, we invite you to contact Fernanda Vargas for any inquiries or to book an appointment. You can reach her via WhatsApp or schedule a consultation through Calendly.

What is an Unfair Dismissal and How Does It Differ from Justified and Null Dismissals?

An unfair dismissal occurs when an employer terminates the employment relationship without proper justification. Unlike a justified dismissal—where valid legal reasons such as inadequate performance or serious breaches of obligations exist—and a null dismissal, which is declared when fundamental rights of the worker have been violated, an unfair dismissal allows the worker to claim either reinstatement or compensation as established by law.

Current Compensation: 33 Days Per Year with a Cap of 24 Monthly Payments (Article 56.1 ET)

According to Article 56.1 of the Workers’ Statute, the compensation for an unfair dismissal is calculated at 33 days of salary for each year of service, prorated for any period less than a year. There is a ceiling of 24 monthly payments. This rule remains applicable as of August 2026, with contracts dated before February 12, 2012, still subject to the transitional regime of 45 days per year up until that date.

Other Key Figures: Justified Dismissal, Temporary Contracts, and Null Dismissal

It is essential to understand the differences in compensation depending on the type of termination. In cases of an objectively justified dismissal, compensation is set at 20 days of salary per year of service, capped at 12 monthly payments. For the conclusion of a temporary contract, the law provides for 12 days of salary per year, except in cases of training contracts or interim positions. In contrast, a null dismissal mandates reinstatement and the payment of back wages for the processing period, reflecting the strong legal protections in place for workers.

What the Council of Europe Has Said: The June 17, 2026 Recommendation

The Council of Europe, through a resolution passed on June 17, 2026, urged Spain to amend its legislation so that compensation for unfair dismissals becomes both a deterrent for employers and a true remedy for workers. The recommendation calls for revising the calculation method, limiting the employer’s discretion in choosing reinstatement, and strengthening protections against fraudulent temporary contracts. It is important to note that, despite these recommendations, Spain’s current laws remain unchanged as per the Workers’ Statute and the Supreme Court doctrine.

The Origin of the Conflict: Decisions of the European Committee of Social Rights (CEDS)

The current debate stems from collective complaints presented to the European Committee of Social Rights, namely complaints 207/2022 by UGT and 218/2022 by CCOO. The CEDS found that the compensation for unfair dismissals was not adequately proportional to the actual damage suffered by workers, arguing that caps on compensation often fail to fully repair the harm. These decisions have significantly influenced the discussion on labor rights at the international level.

Why Spanish Courts Cannot Increase the Compensation: The Supreme Court’s Doctrine

Spanish courts have consistently followed the doctrine established by the Supreme Court, which holds that compensation cannot be increased beyond what is provided by law. Landmark rulings, such as judgments 1350/2024 and 736/2025, confirm that the courts lack the authority to award additional compensation beyond the statutory 33 days per year. This means that despite international recommendations, the compensation remains as set forth by Article 56.1 of the Workers’ Statute.

Practical Implications: What is Law Now and What Is Still Pending

In practical terms, there are two distinct realities. On one hand, current legal rights, as enshrined in the Workers’ Statute and supported by Supreme Court doctrine, guarantee a compensation of 33 days per year with a cap of 24 monthly payments. On the other hand, although international bodies like the Council of Europe have recommended changes, these have not yet been incorporated into Spanish law. Workers must understand this distinction to set realistic expectations and navigate the legal processes effectively.

Timelines and Steps After Dismissal: The 20 Working Days, Conciliation Form, and Lawsuit

After a dismissal, prompt action is crucial. The law provides a window of 20 working days from the date the dismissal takes effect to challenge the decision. Before filing a lawsuit, the presentation of a conciliation form is required, which temporarily suspends the deadline. Observing these procedural steps is critical for ensuring that the worker’s rights are duly considered by the labor courts.

Current Reforms: Pre-Hearing for Disciplinary Dismissals and Permanent Disability

Among the legislative updates already in effect, two reforms stand out. The first is the mandatory pre-hearing in disciplinary dismissal cases, ensuring that employees have the opportunity to present their case before termination. The second is a reform in the area of permanent disability: instead of an automatic termination, employers are now required to consider reasonable adjustments or a change of role. These measures demonstrate a clear effort to enhance worker protections in line with international recommendations.

Impact on Foreign Workers: Renewal of Residence and Work Permits

For foreign workers, an unfair dismissal can have additional repercussions, especially concerning the renewal of residence and work permits. The continuity of one’s employment history is a key factor in the renewal process. Any error in documentation or a missed deadline in contesting the dismissal can complicate future immigration procedures. It is therefore crucial for foreign workers to act promptly and seek proper legal advice.

What Companies and HR Departments Should Review in 2026

Companies and HR departments must ensure that their procedures are fully updated with the current legal requirements. This includes reviewing dismissal protocols, ensuring proper adherence to the mandatory pre-hearing in disciplinary cases, and calculating compensations accurately as per the law. Staying informed and proactive is essential to avoid legal disputes and to ensure that employee rights are meticulously respected.

Frequently Asked Questions

This section addresses common inquiries regarding unfair dismissals:

• What if the dismissal occurs during a temporary contract? In such cases, compensation is calculated at 12 days per year, with special provisions for training or interim contracts.
• Can a worker claim additional compensation based on international recommendations? No, as these recommendations are political in nature and do not modify the current law.
• How does a dismissal affect the renewal of residence for foreign workers? An improperly documented dismissal or failure to contest it within the legal timeframe can complicate subsequent renewal processes.

Conclusion and Legal Disclaimer

In conclusion, while international bodies have advised reforms to make compensation for unfair dismissal more deterrent and reparative, the prevailing Spanish legislation remains unchanged: 33 days per year with a maximum of 24 monthly payments. It is essential to distinguish between current rights (as per Articles 53, 55, and 56 of the Workers’ Statute and Supreme Court doctrine) and international recommendations that have yet to become binding law. This article is intended for informational purposes only and does not replace personalized legal advice.

For further questions or personalized advice, please contact Fernanda Vargas via WhatsApp or book an appointment through Calendly.