Termination Requirements
Termination requirements in Spain involve adherence to specific regulations and procedures. The off-boarding process is typically managed by the employer with involvement from key stakeholders, encompassing potential ad-hoc fees and necessary steps tailored to each termination scenario.
Termination requirements in Spain involve adherence to specific regulations and procedures. The off-boarding process is typically managed by the employer with involvement from key stakeholders, encompassing potential ad-hoc fees and necessary steps tailored to each termination scenario. In Spain, an employer can terminate an employment agreement based on valid reasons and the absence of suitable redeployment options within the company for the employee. The Spanish legislation outlines several acceptable reasons for termination:
- Economic circumstances leading to redundancy.
- Long-term disability, typically exceeding two years.
- Frequent absence due to illness or disability causing unacceptable consequences for business operations.
- Underperformance
- Misconduct
- Refusal to fulfill contractual duties due to conscientious or religious objection.
- Disturbed relationship
Terminating employees in Spain may involve complexities. Generally, unilateral termination without the permission of relevant authorities, such as the Spanish labor courts or government agencies, is not allowed. Seeking mutual consent for termination is often preferred to avoid legal complexities and obtain a smoother transition.
Notice Period
In Spain, notice periods play a crucial role, especially when termination occurs by mutual consent to obtain the employee's agreement. The notice period duration varies based on the employee's tenure with the company and always commences at the end of the month. The notice periods in Spain are typically structured as follows:
Notice periods should be applied as follows:
- Less than 6 months of service: 15 days' notice
- 6 months to 2 years of service: 1 month's notice
- 2 to 3 years of service: 2 months' notice
- 3 to 4 years of service: 3 months' notice
- 4 to 5 years of service: 4 months' notice
- 5 to 6 years of service: 5 months' notice
- 6 to 7 years of service: 6 months' notice
- 7 to 8 years of service: 7 months' notice
- 8 to 9 years of service: 8 months' notice
- 9 to 10 years of service: 9 months' notice
- 10 years or more of service: 1 year's notice
This structure outlines the notice periods applicable in Spain based on the employee's length of service with the company.
Severance for Employees
In Spain, when termination occurs by mutual consent, severance payments are often negotiated to obtain the employee's agreement. The amounts for severance in mutual agreements can vary but are generally equivalent to 2-6 months of salary or more, depending on the circumstances. In the case of termination by the court or relevant labor authorities, statutory severance must be paid. This typically amounts to 20 days of salary per year of service up to a maximum of 12 months' salary.
To mitigate unforeseen financial risks associated with terminations, Jackson and Frank applies a Severance Accrual to all employment agreements in Spain. This accrual is designed to align with prevailing legal and statutory entitlements, as well as local best practices. In the event that an employee resigns or is not entitled to severance, any unused amounts from the Severance Accrual will be returned to the employer. This approach ensures financial protection and adherence to local regulations in Spain.
Social Health